Cold Front in the US dominates Natgas Prices // Chinese Soybean Data and the Fade of its Economy

The Commodity Report #182

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Cold Front in the US dominates Natgas Prices

During next week another cold front will arrive in the upper part of the US. The temperature anomaly is quite negative - accordingly, natgas prices are currently on the rise.

As seasonally remain bearish and these temperature anomalies occur often during the winter months, we’ll keep our eye on short opportunities in the market.

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Chinese Soybean Data and the Fade of its Economy

William I. Tierney Jr from AgResource shared some interesting takes on the accuracy of the official Chinese soybean import data.

“The USDA has highlighted a significant discrepancy between China's reported soybean imports and the actual sum of soybeans exported to the country over the past two years. This inconsistency reached nearly 16 MMT by July 2024 but has since reduced to 6 MMT by October 2024, indicating a potential effort by China's Commerce Ministry to address this disparity. The narrowing gap between reported imports and actual exports raises questions about the accuracy of China's official import data and its impact on analysts' perception of Chinese soybean demand. Relying on exporter shipments to China rather than China's official import figures may provide a more accurate reflection of the country's true soybean demand until data discrepancies are resolved.”

I highly recommend this keynote from Prof. Michael Beckley regarding the Chinese economy and its own issues it is facing at the moment if you’re interested in macro and geopolitics. His thesis: China is now past its peak and will continue to shrink economically from here on - with strong implications for global growth and trading partners. (I’m based in Germany and if one industry fields these headwinds a lot than this is our manufacturing sector)

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In Other News…

I also trumped over another interesting take from hedge fund manager David Einhorn during the week. He revealed a view thoughts on how he’s viewing the status quo of the agri-cycle and how he picks relative value plays in the sector, even while he still expects the momentum in the sector to worsen. He explains it in the example of CNH Industrial, a company he has already taken a larger position. Our equity research service Granum Intelligence also covers the company in detail.

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This week, look out for the following:

• Richmond Manufacturing Index on Tuesday

• Durable Goods Orders and PCE Price Index on Wednesday

• Thanksgiving holiday on Thursday

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Research Service

If you’re an institutional investor, check out our research products for commodity-related futures or equities here.

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Till next Monday, Lukas

If you have any questions in the meantime, please feel free to contact me via X or Mail.

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