Heading into the summit in China, republicans had high hopes. Did anything happen?
Soybean Commitment 2025 Flashback
Soybean Expectations High
A Huge Soybean Deal Announced (same one for years)
What Deal Was That?
Soybean Reality
Excuse Me, Is that Soybeans or Crude?
Fact Check on Soybean Sales
Is China Decoupling on Food?
Everything! But Soybeans?
Trump Made Soybeans Great Again (for Brazil)
Trump Won, Soybeans Cited
China has been agreeing to buy billions of dollars of soybean for years. The results were zero as noted above.
Dear Eric, the expectation was for China to buy twice as many Boeing airliners than announced. Boeing dropped on the news.
And let’s see how many actually happen.
China Summit Was a Success
However, I am pleased to report that we have a new measure of success regarding the summit.
And by that new measure the summit was a a huge success.
The Wall Street Journal explains The Good-News-Is-No-News China Summit
The main rule of presidential summitry with an adversary is first do no harm. By that standard President Trump’s Beijing parley with Chinese leader Xi Jinping this week was a success. It didn’t achieve much, but it also didn’t appear to give away anything notable to the wily dictator.
We say “appear” because we can’t be sure based on the few details leaking out from the parties. Mr. Trump boasted about “fantastic” Chinese purchases to come of U.S. soybeans and aircraft. But China didn’t confirm the sales, and by our count this is the second time China has bought the same American soybeans. Or is it the third? Mr. Trump also said the two now agree on Iran and the Strait of Hormuz, but there was no overt agreement from Mr. Xi.
The good news is that the President doesn’t seem to have granted Mr. Xi’s wish that the U.S. allow the sale of advanced computer chips to China. This is a Communist Party priority as it seeks to catch up with the U.S. on AI. But U.S. firms can’t get enough such chips themselves, and there’s no reason to help China catch up faster to the U.S. leaders.
The good news is nothing happened. By that measure this was a tremendous success.
However, I am not exactly sure why it’s better to sell China nothing than something on chips.
The US government has approved about 10 Chinese firms (including Alibaba, ByteDance, and Tencent) to buy Nvidia’s H200 AI chips. However, no deliveries have been made. Beijing has stalled the deals to pressure Nvidia into selling more advanced tech and to boost domestic semiconductor alternatives.
So, quite literally nothing happened other than the US sent over an entourage of 10+ CEOs for a China pony show with Trump as the dog.
Oh, I almost forgot. China agreed to buy the same soybeans it has agreed to buy for years.
Success!
There’s metric tons and then there’s price per metric ton. China has been buying from Trump at very low prices. Way below what they were paying Obama and Sleepy Joe. Soybeans will never be the same. Trump singlehandedly destroyed what was working great. The South American beans mean US beans are worth less and we will never sell as many as we once did. Lower price times less? Art of the Deal Xi style.
It would not surprise me to see China actually purchase and take delivery of US soybeans this year. This is not to appease Trump, but a strategic purchase by China before agricultural products skyrocket in price. China has a knack for buying commodities when prices are low and stocking up on them. They did that with oil over the last two years, buying over 500 mb at prices around $60 and increasing their SPR to 1500 mb. Those barrels are now worth over $100.
China will also willingly buy US oil and beef at the moment we are running down what we have available, and forcing prices up in the US. And Trump is dumb enough to cheer that as a success.
Buying some cheap soybeans they need to keep Trump happy so he throws Taiwan under the bus seems like a good move. I’m counting the days until the MAGA start telling us Taiwan is none of our business anyway.
They have been in the 20,000,000 metric ton range during TrumpII. When they’re cheap, they buy. As long as they can store them.
Good history of the 25 year soybean war:
https://thechinaacademy.org/how-china-won-the-soybean-war-against-the-u-s/
But none of you guys (Mish included) could bring yourself to vote for an educated, self made black woman – well FAFO.
I have a perfect track record for decades of not voting for idiots in either party.
Some of us, very few actually, care about policies instead of parties. I am proud of not voting for either idiot.
Instead of race-baiting what’s your track record?
By selling out Taiwan to sell a few more soybeans to China, Trump is seriously damaging America‘s reputation as a reliable partner. This reputational damage will last way beyond his time in office. At the same time, China and Iran have learned that „deals“ with Trump are not worth the paper they are written on, and they are behaving accordingly.
The US doesn’t have any reputation for being a reliable partner. It last any reputation it may have had decades ago. You can’t break every treaty, threaten your allies to steal their land, and have a sterling reputation.
Funny thing is another 180 pivot for MAGA crowd. So year ago we heard how China is stealing our lunch and we need tariffs and cult was ecstatic. This year Xi is best friend, respected leader and both countries hand in hand happily stroll into the sunset.
Will take few days for folks like Jojo to adept. Soon you will hear from them how China is best country in the world 🙂
Jojo should be here any minute telling us about Taiwan being none of our business.
I’m sure he’s reading the Politburo notes first on how to respond to the war in Iran ending without a single objective achieved.
“How Many Times Can China Agree to Buy the Same Soybeans from the US?”
I think the answer is “the same amount of times they don’t buy them”
The real story is all the farmland china is buying at discount prices from distressed American farmers.
For starters, it would appear to me that we need to figure out how to sell better. Moving forward have some rules in place. Don’t want to abide by them, then go elsewhere. If needed we change product growth % to be more accurate where and when needed.
1. 50% up front
2. 25% once crop is established as good
3. Natural disasters do not mean the final payment is not due.
4. Offer Insurance.
5. 25% final payment is due upon delivery.
Obviously it’s not working now, but we can change that in some way. Whatever is chosen to change, I would include some upfront buy in to any orders, and place caps on orders based upon things like: Desire, Want, Use little land, high profit %, Easy to grow etc. Work closely with the Farmers to help control things better and more efficiently, and with guarantees in place, etc.
China would just say no thanks to that.
The art of overestimating the art of the deal
Why? They want/need them. If they don’t want them, then we make a deal with someone that does. If they get them from someone else, then we feed the people who were supposed to get them. We only are producing what is already paid for, or for our own Country. No losses occur unless we are not producing, but it’s food, and needed literally all over the World. We would be totally incompetent, to not be able to find a buyer someplace.
…Don’t want to abide by them, then go elsewhere…
There’s a lot of “elsewhere” in agriculture
Brasil has entered the chat
While true, food is always needed all around the globe. Somebody will but our food. If we are losing money now, because we don’t ask for money and just believe the buyers will buy, then start asking. No Country by choice, is leaving their population to starve, if food is available.
Now all that food ordered is paid for, and we have no loss. Farmers happy, hungry happy, you happy, everyone is happy!!!
Idiot
Are you opposed to feeding the hungry, or opposed to asking for payment up front? What’s your angle for not seeing this as a solution?
How about we start with removing all the stupid regulations on hemp?
I agree, but that’s mostly due to taxation, so good luck with that. Growing and/or Consumption for personal is ok, and shops are everywhere and reasonably priced due to competition. No crazy stories about bad products producing bad effects, etc. which ones are you referring to specifically? Just curious,..
All hemp.
In the past:
The 19th Century: Industrial Backbone
Medicine: Tinctures containing cannabis extracts (including hemp) were frequently used in mainstream American medicine throughout the late 1800s.
Today:
Growing hemp in the U.S. is a heavily regulated but rebounding agricultural sector valued at roughly \(\$739\) million. Commercial cultivation requires strict licensing and background checks, and all crops must be tested to ensure the delta-9 THC concentration remains below \(0.3\%\).
The industry has moved past its initial 2021 oversupply crash to focus on high-value and specialty markets.
Licensing & Compliance
You are required to hold a legal, compliant cultivation license to grow hemp in the US. Licensing is managed at the state or tribal level under programs approved by the USDA Domestic Hemp Production Program. If your state or tribe does not administer its own program, you must apply directly through the USDA Hemp eManagement Platform (HeMP).
Key Considerations
Promises, promises…
Ha Ha. China has agreed to and executed on the god-emperor-of-humanity’s demand to use the currency of the realm.
Did they reagree to buy the same amount of soybeans they agreed to last time but did not buy.
China got something nice though, Taiwan.
https://www.bbc.com/news/articles/ce8p61v7l68o
Trump is an incredible backstabber
More of a buschucker.
Unification will happen, hopefully peacefully. There was no bargain on Taiwan, as that was never on the table, but there was a clear message delivered to Trump.
I’m not so sure this is true.
It is true Trump stated publicly that Taiwan shouldn’t seek independence, but when Xi asked Trump directly if he would defend Taiwan Trump said he didn’t want to answer that.
Trump has also stated that if China were to go for Taiwan China would find a great confrontation. The former statement was made during the talks, while the latter after the talks ended.
In light of this the question of Taiwan is still open IMO, but I can say this with confidence: If America chooses not to defend the independence of Taiwan ALL confidence, from foreign countries, in America would evaporate.
And this is why the Iran issue is important and very hard to walk away from. The power image of the empire is literally hanging by a thread. And it is also why if China does make a move for Taiwan it will be done while the US is distracted by Iran IMO.
There is still foreign confidence in America? I seriously doubt that.
After failed China push, will Trump resume Operation Epic Fury against Iran?Trump back in US with no Hormuz breakthrough as Pentagon prepares for new strike options
https://gulfnews.com/world/mena/after-failed-china-push-will-trump-resume-operation-epic-fury-against-iran-1.500542337
New strike options = higher oil prices. Maybe we will get to $275 by the end of the year. The profits will be amazing!
I love the WSJ take that for Trump to not have crapped the bed is good news. lol
it’s like being happy the family drunk didn’t make an idiot of himself at Thanksgiving
How many times can the same futures contract be bought and sold?
With computer trading, almost infinite.
sourced rumor
Just got word Mobil and Shell have informed Costco and Walmart they have no packaged product to send them and to expect bare shelves in the motor oil section in a few weeks
A counter-narrative to the Trump tale
China has explicitly informed the US that it recognizes Iran’s “exercise of sovereignty” over the Strait of Hormuz, contradicting the White House readout of the Trump-Xi summit that claimed Xi opposed Iranian “militarization” of the Strait and any “toll” for its use, per a source close to Iranian Parliament Speaker Ghalibaf.
More than 10 Chinese ships have successfully transited under Iran’s Persian Gulf Strait Authority permit system in the past two days.
Link?
answer in moderation
WTI at $105,66, up $4.49 on his return and bond yields spiking while Trump boasts about accomplishing ~ nothing.
Xi baffled Trump and his sycophants with a bit of glitz and placation. Basically Trump got patted on the head and sent home with a “good boy”, “good boy” lap dog send off.
Gas prices will be up another .50 in the next few daze while Americans suck mud in their personal finances.
Fox News spreads its Pro Israeli propaganda (wholesale bullshit) without regard for truthfulness or substance.
Putin and other world leaders return to China again next week for serious discussions and measurable beneficial outcomes for their mutual benefit as the U.S. falls into the vacuous space created by its self serving leadership.
The Chinese would be wise to buy zero pounds of soybeans from us. According to Grok, 96%+ of US soybeans are GMO garbage.
Looks like China would be better off buying Soybeans from Russia. From Enoch AI:
Russia’s Complete GMO Ban
Russia stands out as a nation that completely banned food production using GMOs in September 2015, following independent scientific research on the issue [A-5]. This decisive action makes Russia a potentially significant source of non-GMO soybeans, as the country’s agricultural sector operates entirely without genetically modified crops. The Russian ban reflects growing international recognition that GMO safety claims lack scientific consensus, with nearly 300 independent scientists worldwide issuing a public warning that there was no scientific consensus about the safety of eating genetically modified food.
https://brightanswers.ai/saved/global-non-gmo-soybean-sourcing-key-suppliers-from-china-russia-17790375.html
Good post Mish.
Thanks
Thanks for all you do Mish!
Argentine and Brazilian farms produce higher oil and protein content soy. They do it at lower cost and farming is growing in both countries as China has invested in water management schemes and rail transport of finished grains to modern export facilities.
Migrant labor is plentiful and cheap.
Trump can bloviate all he wants about his phony sales to China, but U.S. farmers are not benefitting.
Agent Orange is decimating the Asian rice crop which sustains over 3 billion people with the blockade of fuel, fertilizers and sulphur from the gulf.
Prices are up 30 – 80% per ton in the US and most fertilizer products are unavailable in India ~ even if the farmer could finance the inputs.
When rice “tassels” nitrogen demand is high and production falls precipitously without it. Add a “Super El Niño” event that threatens the Indian monsoon season? Demand will possibly soar for US food products (IMO).
US food production is on the decline given input costs. Especially true for fertilizer (up 100% in my state) and labor.
Food production will be profitable as we slide into global famine.
With excellent land management techniques, farm soils can be rebuilt and input costs reduced. Fertilizers and irrigation are big cost targets! Farming has become a management intensive business and barriers to entry/profitability are growing.
Did someone say profits? Reel me in Tom, reel me in.
Cheeto dust is powerful stuff!
I wonder why we fighting war.
https://www.youtube.com/watch?v=dKUz3KzdIW0
BAIER: You said this summit is a success. What’s the most significant specific win for the US?
TRUMP: I think the most important thing is relationship. I have a very good relationship with President Xi.
(So, nothing.)
We would have had a much better relationship with Xi if he had kept the Orange F**kwit as a trophy.
Skins all brown out from obesity, he’s a taxidermist’s nightmare.
He got nice, warm smoke blown up his ass, and looked it.
There’s an admission in there….
The status quo was pretty good
At a global soybean price of approximately $450 per metric ton, $200billion would purchase roughly 445 million metric tons of soybeans.
BREAKING: Trump erases US trade deficit, though climate scientists raise concern about global bean flatulence in atmosphere.
Trumps claims are laughable… but not funny…
With Trump at the table it is lucky we are not buying soy beans from China via Argentina. I thought the meeting was supposed to be about Iran. Having China buy US oil relieves the pressure on China to push Iran to open the straight. If China can’t get oil the straight will get opened a lot quicker.
Trump truly is an idiot.
I thought waking up to Biden news was bad.
Does anyone know a blood sucking financial advisor that will take the sweat of my brow and those around me and offshore industry, devalue my currency and lend me money for usury gain. I am a boomer and want to live my Golden Years at other younger generations expenses and call it financial prowess.
Yeah, I know a guy…he’s jewish though, minimum account he’ll manage is $6,000,000
A guy can only eat so much Tofu and Tempeh before he starts turning Japanese, I really think so.
Xi played taco like a fiddle as he always does.
Probably scratching his head wondering the whole time how the US got to where it’s at with such morons in charge.
The trend has been clear for my entire life.
China constantly promising to buy soybeans has shown to be a lot of hot air.
Maybe it’s their counter strategy to the constant crap coming from the Donald.
To be fair to Trump, he didn’t know Mish would actually follow-up on his lies. Fox News never does and he assumed that’s the way it’s supposed to work.
and it works because his minions have no attention span and don’t follow up.
Geopolitics in The Bullshit Age.
The grand irony of soybeans is that if the Strait remains closed and no fertilizer gets through then there won’t be much soybeans around next season.
https://who13.com/news/iowa-farmers-face-uncertainty-as-fertilizer-prices-surge-amid-iran-war-fear-looming-farm-crisis/
Paging Frosty, paging Frosty, Iowa farms on aisle 2 now available at deep discount.
The fun part of this “paging Frosty” comment is that I had two more farms presented to me yesterday that total a bit over 400 acres that the bank is about to foreclose on.
Starting due diligence… Both farms have nice homes and newer outbuildings that were overspent on. Significant forest resources that will mature in 20 years. Full water and mineral rights. Situated within 3 miles of my main farm.
Initial offer is to buy them at 50 cents on the dollar.
I’m thinking 35 cents in cash will fly!
In Iowa?
Not Iowa, but Iowa has a fantastic farming ethic and many farms remain profitable without killing their soils.
Soybeans are legumes that fix their own nitrogen, so they require zero to minimal nitrogen fertilizer. Try corn.
Or with fert prices like they are, try something that isn’t corn. Like soy, but wait, Trump ruined that economy. Oh well. I guess he isn’t really looking out for farmers, is he?
Trump did it for his Big Ag billionaire friends, mission accomplished. Sorry, little guy, you never meant anything to them beyond your vote.
They don’t have to buy soybeans if they have already bought the farm.
This is the problem with running massive, permanent trade deficits. Your country is the only thing they can buy with that money.
But that’s a problem for The Children.
Fertilizing the farm with themselves. Talk about a closed circuit.