As China looks to supply its domestic livestock industry and expand its ability to feed the country’s growing urban population, Canada has lost its title as the largest importer of U.S. agricultural products. Traders can get a taste for themselves.
In 2010 China’s soybean imports accounted for 25% of the U.S. soybean crop, accounting for 60% of U.S. soybean exports.
State-owned food companies China National Cereals, Oil and Foodstuffs Corp and China Grain Reserves Corporation agreed in February to purchase a record 13.4 million tons of soybeans valued at around $6.7 billion.
China also imports soybeans from Brazil and Argentina.
Kirk Leeds, chief executive officer of the Iowa Soybean Association, recently said that “We believe the growth (of US soybean exports to China) will continue in the next few years” and that China’s demand will continue to grow and US soybeans will take “a significant portion of a much larger market.”
Iowa has seen reaped the rewards of China’s demand and food has been playing an important role in growing the state’s exports by 10% in the last couple of years. The additional exports account for a fifth of the state’s jobs in agriculture, food processing and advanced manufacturing, said Iowa Lieutenant Governor Kim Reynolds.
Traders can now gain exposure through the recently created Teucrium Soybean (SOYB, quote) ETF, which seeks to reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three soybean futures contracts.
The fund invests normally in Benchmark Component Futures Contracts or in certain circumstances, in other soybean futures contracts trade on the CBOT or on foreign exchange.
It may also invest in exchange-traded options on soybean futures contracts and in soybean-based swap agreements that are cleared through the CBOT or its affiliated provider of clearing services in furtherance of its investment objective.
SOYB is up 5.8% year to date but is still 6% depressed from the $24.96 it opened at back in September.