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Tag Archives: Commodities

How Great Are Things for Wisconsin’s Farmers?

It was surprising to me to see a Wisconsin farmer singing the praises of Mr. Trump’s policies. From WPR: Another Wisconsin speaker in Tuesday’s event, Cris Peterson, is a dairy farmer from Grantsburg and a member of the University of Wisconsin’s Board of Regents. She praised Trump’s trade policy and said her farm and others have seen conditions improve after a period of sustained low milk prices that drove hundreds out of business. Why am I skeptical? From Feedstuffs: The Midwest, Northwest...

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The US-China Trade War/Soybean Front: Home before the (Next Batch of) Leaves Fall

On July 9, 2018, over two years ago, reader CoRev wrote: Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices. Prices were in the 982 range in October 2017, midpoint in the previous harvest season. As of today, November futures are at 881. Since then, despite the recession, the overall CPI...

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The Relative Price of Soybeans vs. Grains, 2014-2019

Reader Ed Hanson insists I plot soybean prices from 2014 onward, instead of 2016, to show how factors other than tariffs affect soybean prices. I am happy to accommodate his request. I wonder why soybean prices suddenly deviate from grains overall, staring in March 2018. Figure 1: CPI deflated PPI for soybeans (blue) and grains (brown), in logs 2018M03=0. Orange shading denotes period during which China Section 301 action is announced/implemented. Brown dashed line is when Chinese tariffs...

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Have All Agricultural Commodity Prices Behaved As Did Soybean Prices?

That’s what reader sammy asserts, trying to support the proposition that Chinese retaliatory tariffs on imports of US soybeans had no impact on US soybean prices. … chart of soybean prices there are a number of other commodity price charts, such as copper, wheat, coffee etc. They are unaffected by the tariff war yet are remarkably similar to the soybean chart. That might be true over the past 45 years (I haven’t checked), but we’re talking about tariffs. Since metals are affected by...

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What a Trump Trade Victory Looks Like: Soybeans

Back in July 2018, reader CoRev wrote: …no one has denied the impact of tariffs on FUTURES prices. Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices. Back on March 23rd, when Mr. Trump announced intent to launch Section 301 actions, nearest month soybean futures closed at 1028. Latest...

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EconoFact: “What is the Toll of Trade Wars on U.S. Agriculture?”

By Menzie Chinn and Bill Plumley, at EconoFact, posted a few minutes ago: U.S. agriculture has been caught in the tit-for-tat of the trade wars. Retaliation by China, Canada, Mexico, Turkey and members of the European Union to tariffs imposed by the Trump administration have taken a bite out of U.S. agricultural incomes. Tariffs on imports of steel and aluminum in the United States have also raised costs for machines, equipment and structures used by the agriculture sector. Agriculture...

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What Does It Mean to Say Futures Contracts Forecast?

Despite repeated explanations, some readers still don’t understand futures contracts and forecasting exercises. One point of Chinn-Coibion (2014) is that at the one year horizon, the best predictor of future soybean prices at a one year horizon is the futures contract expiring one year ahead. He writes: And yet ~$9.34 is NOT $8.72. Neither in July 2019 nor in October 2019 was it a correct estimate. However, the relevant comparison is November 2018 vs. November 2019. As November 2019...

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Soybeans: Victory Is Around the Corner

On July 9, 2018, about 14 months ago, reader CoRev wrote: Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices. Hah, hah, hah, hah! Time to look at prices relative to March 23, 2018, when Trump announced imposing Section 301 tariffs on Chinese goods… Source:...

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