There’s been a nice rally in the soybean markets lately. NDSU Extension Crops Economist Frayne Olson says it’s unknown how long the gains will last, but there is a combination of four driving forces causing the rally. “There’s weakening U.S. yield expectations and simultaneously, there’s strong U.S. export to China. There’s also increased hedge fund activity and there’s a weaker U.S. dollar.” Olson says a shift in any of these factors may or may not tilt the markets a certain way. Olson has been closely watching China buy U.S. products. “Think about the phase one agreement as really making it easier to do business. There’s an expectation China will come in to buy more U.S. ag products. In my opinion, I don’t think the dollar commitments made in the agreement are the driving forces behind the purchases. In my assessment, it’s an additional benefit, but not the major driving force.”
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