As a mage, I just want to pursue the truth

Chapter 110 Super Soybean
After returning home, Kenny was still puzzled. There must be a reason behind any changes in the financial market.

The surge in the biggest monster stock, iHealth, at the end of 21 must have been due to some institutions or individuals getting the news in advance and jumping in first. Only by having an accurate estimate of iHealth's market value after signing a big order could they remain confident in their position.

There are people on the Internet saying that the boss of a certain sales department has a vision. Even when iHealth doubled in value, he did not lock up his positions and waited until it reached ten times before leaving.

This is pure hypocrisy and they treat it as reality. For big guys like this who double their money and lock up their positions to wait for the price to rise, they definitely have inside information and know the target price, not because of some big pattern.

This is the same logic as Wangfujing Department Store in the early 20s.

Similarly, a sudden plunge in the futures market means that the power of short selling is far greater than that of long selling.

Although regional conflicts have continued during this period, all forces have been making harsh remarks.

But even shortly before the conflict was most likely to break out, soybean futures did not fall so sharply and without resistance.

Because the global oil supply is tightening, geopolitical conflicts have led to a continuous rise in commodity prices. The Brent spot crude oil price has even exceeded 98 million yuan per barrel.

There is a certain correlation between the price of crude oil and the price of oil. When the price of crude oil rises, soybean-related products fall. This is a very strange phenomenon.

After returning home, Kenny began to collect information from various channels, trying to determine the logic behind this abnormal phenomenon.

In order to ensure the timeliness of his futures trading information, he even hired people in faraway Brazil to help him calculate the weather conditions of the season and its possible impact on soybean production every day.

There is no need for anyone to keep a close eye on America's production. The mature futures market has led to the emergence of specialized companies doing data business in this area. If you need any data, you can just buy it directly from them.

America is the largest soybean producer, and Brazil is the second largest soybean producer.

Brazil and America together account for more than 50 percent of global production.

Due to industrial farming, the output of America is relatively stable. Therefore, Brazil's output can cause strong fluctuations in the futures market.

"There has not been a significant increase in the amount of offshore soybeans in Brazil recently."

"America's soybean production is also stable. Could it be that the Federal Reserve's interest rate hike is expected to be advanced?"

"It's impossible that soybean futures will only fall when the Fed raises interest rates."

American has long said that it will raise interest rates this year, and it must raise interest rates this year, but the number and timing of the rate hikes have been uncertain.

The Fed's interest rate hike means monetary tightening, and the US dollars that were previously released to the world will flow back to America. The Fed uses this method to curb inflation.

The Fed's interest rate hike is a foregone conclusion, the only issue is the number of times. At first it was said to be once, then three times, and later the craziest prediction on the market was that the Fed would raise interest rates seven times this year.

Kenny has not been able to find the reason for the plunge in soybean futures. He thinks he can only wait and the news will be announced sooner or later.

It’s just that some people got it in advance, while others only found out when the news was announced.

At 5:40 in the morning, Kenny was woken up by a phone call. "Who?"

Before he finished speaking, a loud voice came from the receiver: "Look in the telegram group! China has invented a super soybean that can achieve an average soybean yield of 800 kilograms per mu, and the oil yield is over 20%!"

Kenny was not sleepy at all. On the other end of the phone was his old friend, Duke, who used to be a trader with him. He was still on the front line of futures trading.

As a long-time veteran in the soybean industry, he is well aware of the value of an average yield of 800 kilograms per mu.

The soybean yield per mu in America is about 435 kilograms. In extreme cases, the yield per mu can exceed kilograms, but this is a rare case. Soybean is a light and temperature sensitive plant, and its yield is affected by many factors.

If the average yield per mu can reach 800 kilograms, the current soybean price on the market will have to drop by at least 20%.

He quickly determined that yesterday's price drop had almost reached the target in one step.

Kenny opened his phone and looked at the video in the group:
"The Chinese Academy of Agricultural Sciences has developed a super soybean that can produce 800 kilograms per mu. This genetically modified soybean will be the first genetically modified crop approved after China allows genetically modified technology."

He saw in the group that this was the most famous news program in China, and the female host had been introducing this super soybean.

The more he listened, the more shocked he was. When did China's genetically modified technology become so advanced? It was so far ahead of America in soybean seed research and development.

"Is this the soybean seed developed by China?"

"They say they developed it, but who knows? Maybe it was Syngenta."

The Chinese company, namely the aforementioned China Import and Export Chemical Company, spent 2016 billion euros in 430 to acquire the Swiss agricultural chemical giant Syngenta, which is also a seed giant.

You should know that Monsanto also wanted to acquire Syngenta at that time, and the price offered by Monsanto was even higher, 450 billion Euros.

"Syngenta doesn't have this capability. Even if they had this technology development capability, they wouldn't have been acquired by China."

"Super soybeans, I don't know if we will import them. It's incredible that one day we will have to import seeds from China."

"Why not? China's soil and environment can achieve a general yield of 800 kilograms per mu, and America can exceed 1,000 kilograms."

Due to limitations in environmental conditions and breeding capabilities, China's soybean production lags far behind that of America. For the same acre of land, the average output in America is 435 kilograms, while in China it is 265 kilograms.

Moreover, the oil yield of Chinese soybeans is on average 3 to 5 percentage points lower than that of imported genetically modified soybeans. For every one percentage point increase in the average soybean oil yield, the profit from processing one ton of soybeans can increase by 150 yuan.

This is also why China subsidizes soybeans. Without subsidies, no one will grow them.

"How do you know what they say is true and not propaganda?"

"There's no need to lie about this kind of product. If you want to sell a product on the market, people can buy it and test it to know if it's real or not. What's the point of lying? Don't be obsessed."

"No wonder soybeans and related products all plummeted yesterday. The Chinese made a fortune from this short-selling."

"Damn Chinese, they manipulate the market in this way!"

"It fell 12 points yesterday. After opening today, soybean futures may fall by up to eight points, but I don't think it will fall that much."

Although it was five o'clock in the morning, everyone in the soybean futures trading telegram group was discussing heatedly. Kenny couldn't fall asleep after watching it for a while, so he got up and started to think about how the futures price would trend when it opened tomorrow and what profit margins he would have.

Thousands of miles away from Chicago, in China, the office building of China Seed Group was filled with joy. It was already eight o'clock in the evening, and no one had left their workstations yet.

After merging the financial sector of China Import and Export Corporation, the SASAC also transferred a group of people from CITIC Futures and CITIC Construction Investment's futures companies to set up a futures trading department.

Thanks to sechs_ and Qixing Shuangyu for their rewards.

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(End of this chapter)