A Month After Xi Jinping Meets With Iowan Farmers, China's Outsized Impact On US Commodity Markets Is Made Clear With Historic Buying Spree
Portfolio Pulse from Johnny Rice
China's recent large-scale wheat purchases, totaling 60 million bushels, have the potential to improve the U.S. wheat market's outlook, which had been facing a record-low export year. The purchases come after issues with China's wheat quality and a meeting between Xi Jinping and Iowan farmers. Investors can gain exposure to these commodities through ETFs like Teucrium Wheat ETF (WEAT) and Teucrium Soybean ETF (SOYB).
December 20, 2023 | 3:09 pm
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POSITIVE IMPACT
While not directly affected by the wheat purchases, Teucrium Soybean ETF (SOYB) could see indirect benefits from strengthened U.S.-China agricultural relations and China's role as a major soybean importer.
The meeting between Xi Jinping and Iowan soybean farmers, along with China's significant role in soybean imports, could positively influence the U.S. soybean market and, by extension, SOYB.
CONFIDENCE 65
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
China's substantial wheat purchases may alleviate downward pressure on wheat prices, potentially benefiting Teucrium Wheat ETF (WEAT) which offers exposure to wheat commodities.
China's large wheat purchases could lead to a reduction in the net short positions on U.S. wheat contracts, possibly reversing the recent price downtrends and benefiting WEAT as it tracks wheat prices.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80