Will Soybeans Persuade Middle America to Vote Trump?

Please respect our republishing guidelines - Click Here

Could a tiny legume make a difference in the 2020 election?

A trade war with America’s biggest foreign market, the COVID-19 pandemic, and slumping prices – it has been a trifecta of bearish news for the U.S. agriculture sector. Is it morning again for America’s farmers? From the beginning of President Donald Trump’s term, soybean farmers in the United States were going to be in for a rough couple of years, with Washington and Beijing refusing to make concessions or cease hostilities. However, with China going on a buying spree and soybean prices rallying, could the crop’s ascent sway the voters of Middle America in November?

Soy Good in America

For the first time in more than four years, soybean prices are testing $11 per bushel. After hovering in the $8-$9 range since the beginning of the U.S.-China trade dispute, the agricultural commodity is on a bull run. Over the last three months, soybean is up 21%. Year-to-date, it has risen by about 12%. How much higher can it go? The farmers, who have been dependent on taxpayer-funded subsidies to survive in recent years, are hoping to relive 2012 when the crop hit $15 per bushel.

Soybean’s ascent is part of the broader upward trend for the commodities market. A weaker greenback, greater demand, and mixed supply levels are contributing to the eye-popping rally in the sector. But it is soybean’s performance that is noteworthy. So, what is happening?

Despite falling short of the provisions laid out in the phase-one agreement earlier this year, Beijing has been going on a buying spree, scooping up U.S. inventories at incredible rates. Indeed, the world’s largest soybean consumer is living up to the requirements of the pact, but it is also looking to refill its stockpiles in the aftermath of the coronavirus pandemic. This has been the trend in China for a diverse array of commodities, from copper to natural gas, to soymeal.

The U.S. Department of Agriculture (USDA) recently reported that the United States had exported 14.3 million metric tons of soybeans for offshore delivery since the beginning of the 2020-2021 marketing season in September. This is up from 8.07 million metric tons from the same time a year ago. Most of the shipments were headed to China.

China has options, too. Brazil has been producing record amounts of soybeans over the last 18 months. The country is so overflowing with soybeans that farmers are giving discounts. When you factor in the Brazilian real being one of the worst-performing currencies in foreign-exchange markets, Beijing could buy soybeans on the cheap. At the same time, the Chinese yuan is appreciating against the dollar to levels unseen in about 27 months, giving Beijing greater purchasing power.

Investors are indicating that they think soybean prices could eventually surge to an all-time high. The USDA is warning that the U.S. and the rest of the world are seeing inventories crater to record lows. According to its October Supply/Demand Report, the 2020-2021 production is estimated to hit 4.26 billion bushels, down from its earlier forecast of 4.31 billion bushels. The report also predicted the U.S. soybean ending stocks of 290 million bushels.

Soybeans: Then and Now

Liberty Nation provided in-depth U.S.-China trade war coverage. One story involved the rising number of bankruptcies among farmers in the Midwest, a key growth area for soybeans. Many family-owned farmers endured ballooning storage costs, rotting inventories, and sliding demand. A lot of these farmers were in ruins, forcing the Trump administration to swoop in and offer billions of dollars in relief to help them weather the storm. Have things returned to normal for Middle America?

While leftist lunacy may be entertaining to pass the time, it does not pay the bills. When millions are out of work, businesses are shutting down, and normal life seems like a fantasy, the bottom line is the only thing that matters. It was a slow start for the first phase of the trade deal to be realized, but as 2020 winds down, China is finally keeping up its end of the bargain and purchasing U.S. agriculture again. Despite tense relations, this is a positive development for American farmers.

Most soybean farmers survived the turbulence, and now they are looking to profit off rising prices and a weaker buck. With commodity futures suggesting higher prices at the supermarket, the agriculture industry may be in store for increasing profits over the next several years. Whether this is President Trump’s doing or not, soybean growers can say they are certainly better off now than they were four years ago – or, at least, they soon will be.

Middle America at the Polls

Will there even be a second phase trade agreement with Beijing? Will 2022 matter far more than 2020 and 2021? Will voters place their bets on a second Trump term? The polls are all over the place when it comes to how Middle America will vote on Election Day. While former Vice President Joe Biden’s campaign promises do not show much improvement for farmers’ lives, President Trump’s relationship with this group has been rocky. The economics of farming seems to be improving, and for this demographic, the future is all that matters at this point.

Read more from Andrew Moran.

Get Your Top Election Coverage Right Here on Liberty Nation

Watch Now

Listen Now

About the author

Andrew Moran

Economics Correspondent at LibertyNation.com. Andrew has written extensively on economics, business, and political subjects for the last decade. He also writes about economics at Economic Collapse News and commodities at EarnForex.com. He is the author of “The War on Cash.” You can learn more at AndrewMoran.net.