ZS1! trade ideas
Food Prices Since Liberation Day - Is Up with Tariffs or PausedWhat is happening to the food prices since liberation day.
Soybeans are a benchmark for food prices — not only because China and many of us consume large quantities, but also because the U.S. exports a significant amount to China.
After the Liberation Day announcement on 2nd April, soybean prices initially dropped but quickly rebounded and surged higher.
Even after a successful trade agreement between the U.S. and China — which reduced reciprocal tariffs for 90 days — soybean prices continued to climb.
So why do food prices seem to trend higher, whether tariffs are in place or paused?
Micro Soybean Futures
Ticker: MZS
Minimum fluctuation:
0.0050 per bushel = $2.50
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Trading the Micro: www.cmegroup.com
Soybeans at the Spear Tip of Trade ConflictsCBOT: Micro Soybean Futures ( CBOT_MINI:MZS1! )
What’s the import duty China levied on U.S. soybeans? This is a million-dollar question.
Below is a timeline of how dramatically the tariff changed over the past few months:
• At the start of the year, China levied a 3% tariff on soybeans originated from the U.S.
• On March 10th, as a retaliatory method against U.S. tariffs, China raised the soybean import duty by 10%, making the total tariff at 13%.
• On April 4th, with additional tariff imposed, the soybean import duty is now 34%.
• On April 8th, a new wave of retaliation put the soybean duty to 84%.
• On April 11th, the soybean tariff is raised to a staggering 125%.
• U.S. and China held trade negotiation in Switzerland. The soybean tariff is temporarily reduced to 23% beginning May 14th.
Trade conflict is now the key driver in CBOT soybean futures. Raising tariffs caused soybean prices to fall sharply in both March and April. Rumors of trade negotiation, weeks before the actual tariff reduction, triggered a big rebound in April through May.
The WASDE Report
On May 12th, the US Department of Agriculture (USDA) released the latest World Agricultural Supply and Demand Estimates (WASDE) report.
U.S. soybean expectations for 2025/26 show a slight decline in supply, higher crushes, lower exports and lower ending stocks compared to 2024/25. U.S. soybean production is expected to fall to 4.34 billion bushels. Soybean supplies are down less than 1% from 2024/25 due to higher initial stocks but lower imports and production.
Global trade in soybeans reflects an acceleration in demand for protein meal consumption. Higher opening stocks and higher soybean production in South America increased export supplies. As a result, the U.S. share of global soybean exports is expected to fall to 26% from 28% last year, despite increased global demand. As a result, U.S. soybean exports are expected to be 1.815 billion bushels, down 35 million bushels from 2024/25.
The May WASDE report is considered neutral. The market reaction has been mute.
Trading with Micro Soybean Futures
The latest CFTC Commitments of Traders report shows that, as of May 13th, CBOT soybean futures have total open interest of 822,498 contracts.
• Managed Money has 136,702 in long, 81,035 in short, and 122,315 in spreading
• Compared to the previous week, long positions were up by 10,457 (+8.3%) while shorts were down by 3,482 (-4.5%)
• The long-short ratio of 1.7-to-1 as well as the position change pattern show that the “Small Money” has turned more bullish on soybeans
The agreement between US and China, while temporary in nature, gives hope to future tariff reduction. The trade negotiation is ongoing in the next 90 days. Depending on the result, China’s tariff on U.S. soybean could go up, go down, or remain at 23%.
To express a view on the future direction of soybean tariff, CBOT Micro Soybean Futures ($MZS) could be used to form a trading strategy.
• At 23% tariff, US soybeans are at the price disadvantage to South American beans. If the tariff were to go up or even just stay the same, US farmers will lose market share in soybean exports. Therefore, short soybeans if the expectation is no trade deal.
• On the other hand, a reduction of tariff level would benefit the better-quality U.S. beans. Therefore, long soybeans if the view is for lowered tariff.
The August contract MZSQ5 is tradeable through August 22nd. This contract expires after the negotiation deadline and could be used for an event-driven strategy.
The contract size of the micro soybean futures (MZS) is 500 bushels, or just 1/10 of the benchmark standard soybean futures (ZS). At Friday closing price of 10.455, each MZS contract has a notional value of $5,227.5. The minimum margin is $205 for the August contract at the time of this writing.
Hypothetically, if August soybean price goes up to $12 due to a favorable trade deal, a long futures position will gain $772.50 (= (12-10.455) * 500).
If August soybean price fell to $9 as the trade talk broke down, a short futures position will gain $727.50 (= (10.455 - 9) * 500).
The risk of futures trading is to be on the wrong side of the price direction. To hedge the downside risk, the trader could set a stoploss at his order. For example,
• A stop loss at $10 for a long order would set the maximum loss to $227.50 (= (10-10.455) x 500).
• A stop loss at $11 for a short order would set the maximum loss to $272.50 (= (10.455-11) x 500).
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
China for Soyabean - not easily replaceableRead this article here www.reuters.com
When one market has been your largest buyer, it is not easy to find replacement in a short period of time or maybe not for a long , long time. This happens in the case of US selling soyabeans to China. With the tariffs since 2018, China has been sourcing for alternative suppliers like Brazil and other countries to buy soyabean.
This has caused the demand for soyabeans to falter drastically. Now, the tide might change and we can see the end of the bearish trend line in the chart. Of course, the price can hit multiple times on the resistance line and continue to head south OR breakout and rally from here for which i am going to nibble some LONG position.
As usual, please DYODD
What If I Told You... Soybeans Are Ripe for a Short? | COT StratFollow Me Down the Rabbit Hole: The Soybeans Market Setup for Shorts
What if I told you... the soybean market is on the verge of a paradigm shift? That the signals are all around you, hidden in plain sight, waiting for those who can read the code. The Commitment of Traders (COT) data is flashing red, and the truth is undeniable: the smart money is preparing for a downturn.
Take the red pill, and let’s decode why the path of least resistance points down.
The COT Index: A Matrix of Sell Signals
The COT Index is the Oracle, revealing the intentions of the market’s architects. Commercial traders – the ones who truly understand the construct – have loaded up on shorts at levels even more bearish than May. And they’re doing it at lower prices.
This isn’t just resistance to the rally. It’s a calculated move. A whisper in the system that the rally is but an illusion, built on a fragile code.
Overvalued in the Grand Simulation
When you step back and compare soybeans to the benchmarks of reality – gold, Treasuries, and the almighty DXY – their overvaluation becomes clear. The system’s balance demands equilibrium, and soybeans are poised to correct.
Sentiment: The False Prophet
The Advisor Sentiment Index reveals an uncomfortable truth: the herd is ecstatic. But as you’ve learned, the crowd rarely escapes the Matrix unscathed. Bullish sentiment at these extremes is a trap, and the smart money is already fading this illusion of strength.
Spread Divergence: Cracks in the Code
The spread divergence between the front-month and the next-month contracts is a glitch in the system. Short-term excitement isn’t aligning with the longer-term structure. When spreads diverge like this, it’s a signal: the construct is destabilizing.
Distribution: The Hidden Hand
The POIV (Price-Open Interest Volume) divergence reveals a pattern of distribution. The architects of the market are selling into the rally, while the unwitting masses continue to buy. The code doesn’t lie. This is the calm before the storm.
The Technical Trinity: %R, Stochastic, and Oscillator
Three powerful indicators align, pointing to an impending shift:
%R Indicator: Overbought and ready to turn.
Stochastic Oscillator: Rolling over, signaling exhaustion.
Ultimate Oscillator: Confirming the downward momentum.
Combine this with the down-sloping 52-day SMA, and the dominant trend reveals itself: the Matrix is designed to move lower.
Patience: The Key to the System
This isn’t a call to blindly short. No one escapes the system without discipline. Wait for the daily chart to confirm the trend change. Only then can you move with precision, ensuring that every move aligns with the code.
The Choice Is Yours
The soybean market is more than what it seems. The smart money, the sentiment extremes, the divergences – they all point to a single truth: this rally is an illusion. But as always, the choice is yours.
Will you take the blue pill and believe what you want to believe? Or take the red pill, follow me, and see how deep the COT hole really goes? The trend is your ally – until it isn’t. And this one is collapsing before your eyes.
Stay tuned, stay sharp, and remember: the Matrix rewards those who see beyond the veil.
Acknowledgment
The strategies and concepts taught in this class draw significant inspiration from the works and teachings of Larry Williams, a pioneer in trading and market analysis. His groundbreaking research and methodologies have shaped the foundation of modern trading education.
While this class incorporates Larry Williams’ principles, the content has been adapted and presented to reflect my own understanding and application of these ideas. Full credit is given to Larry Williams for his original contributions to the field of trading.
Disclaimer
The information provided in this content is for educational and informational purposes only and should not be construed as financial advice, investment recommendations, or an offer to buy or sell any securities or financial instruments.
Trading financial markets involves significant risk, including the potential loss of capital. Past performance is not indicative of future results. You are solely responsible for your trading decisions and should conduct your own research or consult with a licensed financial advisor before making any financial decisions.
The creator of this content assumes no liability for any losses or damages resulting from reliance on the information provided. By engaging with this content, you acknowledge and accept these risks.
Soybean Surge: Is the Momentum Ripe for More Gains?Soybean futures hit a 2025 low on 7th April in response to President Trump’s sweeping tariffs. Since then, they have rallied 8.4%, staging a strong rebound.
The first leg of the rally (7–11 April) was driven by front-loaded U.S. exports, a weaker dollar, and Trump pausing tariff hikes on 9th April. Prices moved sideways, buoyed by Argentine supply disruption balancing out favourable U.S. planting weather & a bumper harvest in South America.
Momentum resumed on 12th May after the U.S. & China agreed to a 90-day mutual tariff reduction. The latest WASDE report added fuel, showing tighter supplies & lower ending stocks. The USDA now projects 2025/26 US ending stocks to fall 15.7% YoY to 295 million bushels.
On 14th May, futures reached a nine-month high, lifted by a proposal to extend the biofuel tax credit, which augurs well for stronger demand for soybeans.
TECHNICAL SIGNALS CONFIRM BULLISH FUNDAMENTALS
Soybean futures confirmed a bullish golden cross on 11th April, as the 9-day moving average crossed above the 21-day. The rally gained traction after prices found support at the 21-day average on 9th May, reigniting the strong upward momentum.
MACD shows fading bullish momentum, and RSI has dipped below its 14-day average. However, this consolidation could set the stage for a potential rebound as technical pressure eases.
OPTIONS DATA POINT TO SOFTENING OF BULLISHNESS IN THE NEAR TERM
For the week ending 6th May, Managed Money’s net long positioning in soybean futures fell by 42.8%, reflecting a 6.8% drop in longs and a 10.6% rise in shorts, signalling a weakening bullish sentiment.
Soybean futures and options implied volatility spiked in early April as prices and skew dropped. From 9th April, both price and skew began rising while IV gradually declined. This suggests stabilising sentiment and reduced demand for downside protection in soybeans.
Source: CME CVOL
OI trends over the past week indicate bearish positioning in near-term contracts, marked by an outsized increase in puts. In contrast, longer-dated contracts saw a significant rise in call OI, while put OI declined.
Source: CME QuikStrike
HYPOTHETICAL TRADE SETUP
This paper posits a long position on the CME Micro Soybean July futures (MZSN25, expiring on 20th June) given strong technicals, reduced tariffs, & a bullish WASDE report. The rebound since 7th April, coupled with optimism from U.S.-China trade talks and biofuel tax credit extension, hints at continued upside potential.
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme .
DISCLAIMER
This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services.
Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Soybeans: The Global Protein Powerhouse🟡 1. Introduction
Soybeans might not look like much at first glance — small, round, unassuming. But behind every bean lies a global story of protein demand, export flows, and economic policy.
They feed livestock, fuel vehicles, nourish entire populations, and move markets. In fact, soybeans sit at the intersection of agriculture, industry, and geopolitics — making them one of the most actively traded and strategically watched commodities in the world.
If you’re looking to understand how soybeans move markets — and how you can trade them effectively — this article is your starting point.
🌍 2. Why the World Cares About Soybeans
Few agricultural commodities carry the weight soybeans do. Their importance spans both the food and energy sectors — and their global footprint is enormous.
Here’s why they matter:
Protein Meal: After processing, about 80% of the soybean becomes high-protein meal used to feed poultry, pigs, and cattle.
Soybean Oil: Roughly 20% is extracted as oil — a key ingredient in cooking, industrial products, and increasingly, biodiesel.
Biofuels: As the push for renewable energy grows, soybean oil plays a major role in sustainable fuel strategies.
Top producers:
United States — historically the world’s largest producer.
Brazil — now rivals or exceeds U.S. production in some years.
Argentina — a dominant player in soybean meal and oil exports.
Top importers:
China — imports over 60% of globally traded soybeans.
EU, Mexico, Japan — also large buyers.
Soybeans are a bridge commodity — connecting livestock feed, food manufacturing, and renewable energy. That’s why traders from Chicago to Shanghai watch every yield forecast and export announcement closely.
💹 3. CME Group Soybean Contracts
Soybeans trade on the CME Group’s CBOT platform, with two main futures products:
o Standard Soybeans
Ticker: ZS
Size = 5,000 bushels
Tick = 0.0025 = $12.50
Margin = ~$2,150
o Micro Soybeans
Ticker: MZS
Size = 500 bushels
Tick = 0.0050 = $2.50
Margin = ~$215
Soybean futures are among the most actively traded agricultural contracts, offering deep liquidity, tight spreads, and excellent volatility for strategic traders. Keep in mind that margins are subject to change — always confirm with your broker. Micro contracts are ideal for scaling in/out of trades or learning market structure without large capital risk.
📅 4. The Soybean Calendar
Soybeans follow a seasonal cycle that creates rhythm in the market — and a potential edge for informed traders.
In the United States:
🌱 Planting: Late April to early June
☀️ Pod development / blooming: July and early August (weather-sensitive)
🌾 Harvest: September through November
In Brazil:
🌱 Planting: October to December
🌾 Harvest: February through April
This staggered calendar means that soybean markets have multiple weather risk windows each year. It also means the export flows and global pricing dynamics shift between the Northern and Southern Hemispheres throughout the calendar year.
That’s why soybeans tend to have two major volatility windows — mid-summer (U.S. crop concerns) and early Q1 (South American weather). Traders often build seasonal strategies around these patterns — buying weakness before key USDA reports, fading rallies during overbought harvests, or trading futures spreads between U.S. and Brazilian supply flows.
🔄 5. How Soybeans Are Traded Globally
Soybeans move through a complex international web of growers, crushers, exporters, and consumers. As a trader, understanding this flow is essential — because each node introduces price risk, opportunity, and reaction points.
Key players:
o Hedgers:
U.S. and Brazilian farmers hedge production risk using futures or options on futures.
Exporters hedge shipping schedules against fluctuating basis and FX risk.
o Crushers:
Companies like Cargill or Bunge buy soybeans to crush into meal and oil.
Crush margin (aka “board crush”) affects demand and influences futures spreads.
o Speculators:
Institutional funds trade soybeans as a macro or relative value play.
Retail traders use micro contracts (MZS) to capture directional or seasonal moves.
o China:
Its purchasing pace (or sudden cancellations) can move markets dramatically.
Announcements of bulk U.S. purchases could trigger short-covering rallies.
Additionally, soybeans are sometimes traded indirectly via their by-products:
Soybean Meal (ZM)
Soybean Oil (ZL)
These contracts often lead or lag ZS based on demand shifts in feed or fuel.
📈 6. What Makes Soybeans Unique to Trade
Compared to wheat and corn, soybeans are:
More weather-sensitive during July and August (especially to drought and heat).
More globally integrated, thanks to China’s dominant import role.
More complex, due to crush dynamics and multiple end-use markets.
This multifaceted nature is why many professional traders monitor soybeans, even if they aren’t actively trading them every week.
📌 7. Summary / Takeaway
Soybeans are one of the most important — and most tradable — commodities in the world. They feed livestock, fuel industry, and anchor the agricultural markets across two hemispheres.
Their unique role in food, fuel, and feed makes them more than just another contract — they’re a barometer for global health, demand, and policy.
Whether you’re trading the standard ZS contract or getting started with MZS, mastering soybeans means understanding weather, trade flows, product demand, and seasonality.
🧭 This article is part of our agricultural futures trading series.
📅 Watch for the next release: “Weather and Corn: A Deep Dive into Temperature Impact”
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
SOYBEAN, Weekly Supply/Demand+fundamentals we are kicking of the year with a clear technical rejection from $1050 to $1112 weekly supply zone. Price pushed agressively into this area and has now printed multiple rejection candles on the daily, confirming the zones strength.
fundamentals are showing bearish positioning aligned with the technical setup.
entry wil be at market open. first target is at break of recent support and if fundamentals stil support the bias by then we wil also aim for target two.
simple structure, clean confirmation. lets see if price delivers.
Soybeans (MZS) | Long Setup | Seasonal Edge | (April 2025)Soybeans (ZS/MZS) | Long Setup | Seasonal Edge + Profile Support | (April 2025)
1️⃣ Quick Insight:
Currently watching Soybeans (ZS) and the micro contract MZS for a potential long setup. Price is approaching the value area low from the volume profile — a key support zone where buyers previously stepped in aggressively. This zone aligns with seasonal strength, making it a high-probability area to consider long positions.
2️⃣ Trade Parameters:
Bias: Long
Entry: Around value area low (Profile support)
Confirmation: Buyer volume + hold above structure
Stop Loss: Below recent swing low / invalidation of value zone
TP1: Based on Fibonacci targets
TP2: Depends on price reaction and volume continuation
Seasonal Edge: Historically, Soybeans rally from mid-April through end of April — adding confidence to the long setup.
3️⃣ Why I’m Buying:
Price reacting at value area low (volume profile)
Buyer aggression seen on recent candles
Seasonal tendency supports bullish direction during this time of year
Fibonacci projections give upside targets in line with previous wave structure
Bonus Insight – Gold:
Simultaneously watching Gold (XAU/USD) for a potential short, depending on how it behaves at resistance. If we get rejection signals, I may hedge or even rotate capital from metals into agri (Soybeans) as part of a short-term rotation play.
Please LIKE, FOLLOW, SHARE and COMMENT to support! Drop your chart ideas or setups below so we grow together.
Disclaimer: This is not financial advice. Do your own research and manage risk.
Using Micro Soybean Futures to Finetune Trading StrategiesCBOT: Micro Soybean Futures ( CBOT_MINI:MZS1! )
Shipping industry news recently reported that 30 U.S. soybean ships (about 2 million tons) are currently heading to China, nearly half of which will arrive after April 12th, when China's 10% retaliatory tariffs on U.S. soybeans will take effect.
How big are the tariffs? Let’s say a cargo of soybeans, or 65,000 tons, is sent to China. Assuming the trade is $10 per bushel, given 36.74 bushels per ton, total cargo value is $23.88 million. Upon arriving in China, you owe a new tax bill for $2.39 million!
According to people familiar with the matter, many cargoes are for China Grain Reserves, which may be exempted from tariffs. Soybean cargoes loaded before March 12th are eligible for a one-month grace period. Data from the U.S. Department of Agriculture on March 20th showed that the stock of unsold agricultural products in China was 1.22 million tons. Any sign of order cancellation will help us assess the real impact of tariffs.
In anticipation of the tariffs, China rushes to buy U.S. soybeans in the past two months. In January and February, China bought 9.13 million metric tons of soybeans from the U.S., up 84% year-over-year. I expect the buying will vanish by the second quarter, given new crop arriving from Brazil at much lower prices without the tariffs imposed by China.
China relies heavily on imported soybeans to crush into soybean oil for cooking use and soybean meal, a key ingredient in animal feed.
The oversupply of soybeans pushes the downstream soybean meal market to crash. According to the statistics of China Feed Industry Information, soybean meals spot market prices tumbled more than 600 yuan per ton to 3,180 since February, nearly a 20% drop.
Top feed processing companies, including New Hope, Haida, and Dabeinong, have each announced price cuts ranging from 50 to 300 yuan per ton for their chicken feed and hog feed products.
With lower overall demand, and tariffs making South American soybeans more competitive, U.S. soybeans face a shrinking export market. On my March 17th commentary “Soybeans: Déjà vu all over again”, I expressed a bearish view on CBOT Soybean Futures and discussed the possibility of $8 beans.
Trading with Micro Soybean Futures
On February 24th, CME Group launched a suite of micro-size agricultural futures contracts, including Micro Corn (MZC) futures, Micro Wheat (MZW) futures, Micro Soybean (MZS) futures, Micro Soybean Meal (MZM) futures and Micro Soybean Oil (MZL) futures.
The contract size of the micro soybean futures (MZS) is 500 bushels, or just 1/10 of the benchmark standard soybean futures (ZS). The minimum margin is $200 for the front futures month, and it gets smaller further out. For instance, the margins for May, July, August, September and November are $200, $190, $180, $170, and $165, respectively.
The smaller capital requirement makes it easier for traders to express an opinion ahead of the release of a USDA report or anticipate the impact of tariffs and retaliation.
The latest CFTC Commitments of Traders report shows that, as of March 25th, CBOT soybean futures have total open interest of 853,368 contracts, up 5% in two weeks.
• Managed Money has 89,649 in long, 123,470 in short, and 139,427 in spreading
• Compared to two weeks ago, long positions were down by 12% while shorts were increased by 12%. This shows that the “Small Money” has turned bearish on soybeans
In my opinion, micro soybean futures would be a great instrument to trade market-moving events, particularly the USDA reports. I list the big reports here for your information:
• World Agricultural Supply and Demand Estimates (WASDE), monthly, April 10th
• Prospective Plantings, annually, March 31st
• Grain Stocks, quarterly, March 31st, June 30th, September 30th
• Export Sales, weekly, every Thursday
• Crop Progress, weekly during growing season, April 7th, April 14th, April 21st
• Acreage, annually, June 30th
Hypothetically, a trader expects more soybean planting in this crop year and wants to express a bearish opinion ahead of April 7th Crop Progress. He could enter a short order for May contract MZSK5 at the current market price of 1,023. If he is correct in his view and the contract price drops to 900, the short position would gain $1.23 per bushel (= 1023-900) and the total gain is $615 given the contract size at 500 bushels.
The risk of short futures is the continuous rise in soybean prices. The trader would be wise to set a stoploss at his sell order. For example, a stop loss at $11.00 would set the maximum loss to $385 (= (11.00-10.23) x 500).
To learn more about all Micro Ag futures contracts traded on CME Group platform, you can check out the following site:
www.cmegroup.com
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Impact of Tariffs on Agricultural MarketsTemporary Tariff Suspension and Its Implications
The U.S. has temporarily suspended tariffs on agricultural imports from Canada and Mexico until April 2, providing short-term relief to cross-border trade. However, Canada's retaliatory tariffs remain in place, adding complexity to trade flows. These dynamics could influence market stability and pricing, particularly for key commodities such as wheat, corn, and soybeans.
Effects on Agricultural Exports and Imports
The uncertainty surrounding the tariff policies has already begun to impact trade volumes. U.S. agricultural exports are projected to face headwinds, particularly in markets affected by retaliatory measures. While U.S. tariffs on China remain in effect, China has maintained its own countermeasures, limiting U.S. soybean exports, which have been revised downward to 47.5 million metric tons (MMT).
At the same time, Canada and Mexico are key buyers of U.S. agricultural products, and the current suspension of tariffs has allowed trade flows to continue without immediate disruption. However, if tariffs are reinstated, the U.S. could see a decline in exports to these partners, potentially leading to increased domestic stockpiles and price fluctuations.
Market Reactions and Price Volatility
Commodity prices have reacted to the uncertainty surrounding tariff policies. For example, soybean futures are trading around $10 per bushel amid concerns that reinstated tariffs could further reduce demand for U.S. grains ECONOMICS:USGSW and oilseeds. Meanwhile, the global soybean market is already experiencing record-high stock levels, which adds further downward pressure on prices.
Corn markets CBOT:ZC1! are also adjusting to shifting trade dynamics. While global corn production is expected to rise by 3.2 MMT due to increased output in India, Russia, and Ukraine, export reductions from Brazil and South Africa may offset some of these gains. If tariffs disrupt North American trade, U.S. corn exports could be affected, altering the balance of supply and demand.
Long-Term Outlook
Looking ahead, the final decision on U.S. tariffs will play a significant role in shaping agricultural trade flows. If the U.S. extends the suspension or removes tariffs permanently, markets could stabilize, supporting steady export volumes. However, if tariffs are reintroduced, the agricultural sector may face increased price volatility and supply chain disruptions. Investors and traders should closely monitor developments as the April 2 deadline approaches, as policy changes could have significant implications for commodity markets.
Soybeans: Deja Vu all over againCBOT: Micro Soybean Futures ( CBOT_MINI:MZS1! )
Let’s rewire the clock back for seven years. In 2018, trade tensions escalated between the US and China, resulting in a series of tariffs and retaliations.
On July 6, 2018, US imposed a 25% tariff on $34 billion of Chinese imports. On the same day, China immediately hit back with 25% tariff on equal value of US goods.
American soybeans were among the hardest hit by tariffs. The United States has been the largest soybean producer in the world. According to USDA data, American farmers produced 120 million metric tons of soybeans in 2017, contributing to 35.6% of the world production. About 48.2%, or 57.9 metric tons, were exported to the global market, making US the second largest soybean exporter after Brazil.
China is the largest soybean consumer and importer. In 2017, it imported 94 million metric tons of soybeans, accounting for 61.7% of the global imports. Brazil and the US were the largest sources of China’s imports, with 53% and 34% shares, respectively.
Tariffs on US soybeans punished American farmers. Total tariff level was raised from 5% to 30%. As a result, the FOB cost to Shenzhen harbor in southern China hiked up 700 yuan (=$110) per ton. This made US soybeans 300 yuan more expensive than imports from Brazil.
Tariffs priced American farmers out of the Chinese market. According to USDA Foreign Agricultural Service, China imported 1,164 million bushels of US soybeans in 2017. By 2018, China import dropped 74% to 303. While US exports recovered to 831 in 2019, it did not resume to the pre-tariff level until the signing of US-China trade agreement. CBOT soybean futures plummeted 15-20% in the months after the tariffs were imposed.
US farmers incurred huge losses from both reduced sales and lower prices. The following illustration is an exercise of our mind, not from actual export data.
• Without trade tensions, we assume exports of 1,164 million bushels each in 2018 and 2019, at an average price of $105 per bushel. This comes to a baseline export revenue of $244.4 billion for both years combined.
• Tariffs lowered export sales to 1,134 million bushels for the two-year total, at an average price of $87. Thus, the tariff-impacted revenue data comes to $98.6 billion.
• The total impact on soybean sales volume would be -51%, from 2,328 down to 1,134.
• The total impact on export revenue would be -60%, from $244.4 to $98.6 billion.
It is déjà vu all over again.
In February 2025, the Trump administration announced 10% additional tariffs on Chinese goods. This was raised by another 10% in March, setting the total to 20%.
To retaliate against US tariffs, China imposed import levies covering $21 billion worth of U.S. agricultural and food products, effective March 10th. These comprised a 15% tariff on U.S. chicken, wheat, corn and cotton and an extra levy of 10% on U.S. soybeans, sorghum, pork, beef, aquatic products, fruits and vegetables and dairy imports.
This is just the beginning. In the last trade conflict, average US tariff on Chinese imports was raised from 4% to 19%. Now we set the starting point at 39%. How high could it go? From history, we learnt that this could go for several rounds before it settles.
Trading with Micro Soybean Futures
On March 11th, USDA published its World Agricultural Supply and Demand Estimates (WASDE) report. Both the U.S. and global 2024/25 soybean supply and use projections are basically unchanged this month, meeting market expectations.
In the last week, soybean futures bounced back by about 2%, recovered most the lost ground since China first announced the retaliative measures.
The latest CFTC Commitments of Traders report shows that, as of March 11th, CBOT soybean futures have total open interest of 810,374 contracts.
• Managed Money has 101,927 in long, 109,849 in short, and 108,993 in spreading positions.
• It appears that the “Small Money” spreads their money evenly, not knowing which direction the soybean market would go.
In my opinion, the futures market so far has completely ignored the possibility of a pro-long trade conflict with China.
• Seriously, ten percent is just the start. What if the tariff goes to 30% like in 2018?
• How would soybean prices react to a 50% drop in US soybean exports?
Anyone with a bearish view on soybeans could express it by shorting the CBOT micro soybean futures (MZS). These are smaller-sized contracts at 1/10 of the benchmark CBOT soybean futures. At 500 bushels per contract, market opportunities are more accessible than ever with lower capital requirements, an initial margin of only $200.
Coincidently, Friday settlement price of $10.17 for May contract (MZSK5) is identical to the soybean futures price of $10.40 immediately prior to the 2018 tariff.
History may not repeat, but it echoes . At the last time, the tariff on soybeans saw futures prices plummeting 20% within a month. If we were to experience the same, soybeans could drop to $8.00. This is a likely scenario if tariffs were to rise higher.
Hypothetically, a decline of $2 per bushel would cause a short futures position to gain $1,000, given each micro contract has a notional of 500 bushels.
The risk of short futures is the continuous rise in soybean prices. The trader would be wise to set a stoploss at his sell order. For example, a stop loss at $10.50 would set the maximum loss to $165 (= (10.50-10.17) x 500), which is less than the $200 initial margin.
To learn more about all Micro Ag futures contracts traded on CME Group platform, you can check out the following site:
www.cmegroup.com
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Soybeans: Running Out Of SteamSoybeans seem to be a laggard in the aggriculture space recently and it appears as though now could be an ideal short. This sequence may send bonds higher on inflation easing as well. Equities are the real question and whether or not they accept the inflation easing as a bullish catalyst or if this part of a broader deflationary wave. In either scenario, it would seem as though agriculture products face the brunt of it. Good luck traders.
Can Soybeans Survive the Global Trade Chessboard?In the intricate game of international trade politics, soybeans have emerged as pivotal pieces on the global economic chessboard. The soybean industry faces a critical juncture as nations like the European Union and China implement protectionist strategies in response to US policies. This article delves into how these geopolitical moves are reshaping the future of one of America's most significant agricultural exports, challenging readers to consider the resilience and adaptability required in today's volatile trade environment.
The European Union's decision to restrict US soybean imports due to the use of banned pesticides highlights a growing trend towards sustainability and consumer health in global trade. This move impacts American farmers and invites us to ponder the broader implications of agricultural practices on international commerce. As we witness these shifts, the question arises: How can the soybean industry innovate to meet global standards while maintaining its economic stronghold?
China's strategic response, which targets influential American companies like PVH Corp., adds complexity to the global trade narrative. The placement of a major U.S. brand on China's 'unreliable entity' list highlights the power dynamics involved in international commerce. This situation prompts us to consider the interconnectedness of economies and the potential for unforeseen alliances or conflicts. What strategies can businesses implement to navigate these challenging circumstances?
Ultimately, the soybean saga is more than a tale of trade disputes; it's a call to action for innovation, sustainability, and strategic foresight in the agricultural sector. As we watch this unfold, we are inspired to question not just the survival of soybeans but the very nature of global economic relationships in an era where every move on the trade chessboard can alter the game. How will the soybean industry, and indeed, international trade, evolve in response to these challenges?
Obvious Long on Soybeans Soybeans have been consolidating for some time between the yellow and red trend lines after finding support just above the 1500 week ma. Corn has led the market with downward action and now leads it with upward trajectory. Soy's have finally broken out of the RSI downtrend they've been in for almost 4 years. It seems obvious that Soybeans will follow corn and move to the green line at the very least. The stochastic RSI on the monthly has had a confirmed cross up signaling bu8llish momentum in the next several months. For reference corn had a confirmed cross up last fall. The price I'm expecting is 12.5 a 15-17% gain from todays prices. If corn can keep moving higher the next target for soybeans is 14ish. I will start booking my soybeans for the 2025 season if we can get a 10-15% gain from here.
I'm a farmer from Canada and have been studying charts for about 8 years now. i started implementing my TA into commodity futures a few years ago.
Thanks for reading
New beginning The price has been moving below the daily SMA200 for a year and a half.
All previous attempts to rise above, highlighted by the rectangles, have failed.
In recent weeks, the price has completed a double bottom with a neckline at $1070.
A close above this level confirms the double bottom pattern and positions the price above the 200 average, starting the new bullish cycle.
Beans looking to drop hard, after all... Beans have been looking weak lately, and all this current and near future trade war fundamentals and uncertainty aren't going to help at all. Volatility is likely to go up this week across a lot of markets, and the ag commodities will certainly be part of that, with emotional fears from the last market crashing during the last Trump term. Beans especially didn't fair well during that time, and the corn-to-bean ratio was out of wack to where us farmers didn't want to plant beans period. We all thought (and were told) they might go to $7 or less! All while corn was poor, but much more palatable with the breakevens. Farmers, as a rule, certainly prefer to plant corn over beans anyway, if they live where they can choose as such.
But back to the bean chart, I've been thinking there was a decent enough chance we could chop around in here and bounce off of any short term weakness and key support, to make new highs for the move. A lot of guys were looking to target the high 10s and even around $11, before expecting a notable correction. Well, unfortunately, I think we've already recently peaked and are more likely to now keep correcting down, potentially quite violently.
On Friday, the 20 day EMA gave us bounce off support, but if we get a confirmation close Monday below that (likely), my opinion is we confirm we're in a larger scale wave 3 down already, and should eventually target the 9.47 and likely even lower ultimately, before we bottom in February or March, before spring seasonality and US planting weather premium allows for us to rise again.
Longterm, for this summer and beyond into 2026, I am quite bullish grains and ultimately, expect to see new all time highs, but it's not gonna be this year. Mostly due to the likelihood of a major cycle drought of our lifetime, which could happen this year but not truly affect the supply issue drastically until new crop turns into "old crop".
Decision time for beansGuess I will try my hand at this.
Bear with me as I'm still learning.
March Beans had a beautiful run up completing all five waves of an elliot pattern. Now it seems we are in the corrective C pattern. Question is does it go farther down continuing wave C or do we reverse here.
There appears to be a potential bull flag on the 4hr. If we continue to hold the bottom trendline I'd expect a breakout and a continuation upwards.
A break and close above the upper downward trendline I will enter long and target a zone between 10.70 and 10.80
A break and close below the bottom downward trendline I will go short and target a zone between 10.25 and 10.18
Grain Markets Showing StrengthMarch Soybeans have had a great start to the year after seeing a bottom after basically a whole year of falling prices in 2024. In January of 2024 just starting out the new year, prices fell below the 200-day moving average and have not been able to trade above that mark with conviction since. Since the bottom in mid December, prices have climbed back up toward this 200-day moving average and are now re-testing those levels. Significant market drivers could be potential tariffs, volatile climate in South America, and from the prospective planting report that is released in March.
Looking historically at grain reports shows traders that March offers great volatility as there is both the Prospective Planting report and a WASDE report that can drive the price one way or another. With January offering great volatility historically offering 3 different reports regarding the grains, March gives traders the next highest range driving interest in the grain products, and with Micro grain contracts being released, traders have their choice of size. With the standard Corn, Soybean and Wheat contracts being sized at 5,000 bushels per contract, the micro contracts come in at 1/10th the size at 500 bushels per contract, which would have a lower barrier to entry and give a different level of scalability to traders.
If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
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**All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
