Those Years When I Was Forced to Top the Forbes List

Chapter 234 Soybeans, Soybeans

Why do we say "surprisingly"?
This is something every Chinese person should know, especially someone of Chen Xuebing's age who has firsthand experience with it.

China's grain production has always focused on wheat and rice to ensure staple food security, while soybean production capacity is not high and the planting area is not large, so it relies heavily on imports and is also the country with the highest demand for soybeans in the world.

There are many stories behind this choice.

I won't go into details.

In August 2003, the U.S. Department of Agriculture suddenly announced that due to weather conditions, U.S. soybean stocks had been adjusted to a record low and that no new production would be added that year.

International soybean prices have suddenly surged by nearly double.

Soybean oil is the largest category of edible vegetable oils, and soybean meal, a byproduct of soybean oil extraction, is also a major raw material for poultry and livestock feed. It can be said that both vegetable oil and animal oil are related to soybeans.

Faced with ever-increasing soybean prices, Chinese oil traders formed groups to go overseas to snap up soybeans. However, just one month after the rush, the U.S. Department of Agriculture announced that the data was incorrect, that the quantity was not as low as claimed, and that soybean production would be increased.

The oil dealers who rushed to buy the oil were stunned. After doing the math, many of them voluntarily chose to default on their contracts.

The four major grain traders, ABCD, immediately sued Chinese oil companies, demanding exorbitant compensation and threatening to shut them down. Thousands of oil companies went bankrupt, and of the remaining 90, 64 were controlled by foreign capital.

At that time, Chen Xuebing had an uncle in his courtyard who worked at the Shiqiaopu Grain and Oil Company in Jiulongpo. He was suddenly laid off because the company went bankrupt and he didn't get a penny. He often organized a group of colleagues to hold small meetings in the courtyard and wanted to cause trouble. Chen Xuebing heard about this several times.

This matter is not over yet.

In 2006, Wall Street and the Big Four grain traders, having tasted success, returned with renewed vigor, this time raising not only soybean prices but also corn and wheat prices.

This time, however, China Grain Reserves Corporation (Sinograin) was well-prepared. Between 03 and 06, it bought up soybeans and grain at low prices and stockpiled countless quantities. When the market panicked, it opened its warehouses to release grain, initially releasing small amounts to calm the market. Seeing this, the four major grain traders rushed to China to buy up grain on the market. Sinograin gradually lured them into its trap and eventually stopped stockpiling, releasing more and more grain.

In 06, it was once a month; in 07, it was once a week; and in 08, it became once every two days.

The four major grain traders dared not take the orders, and could only let the price of soybeans and soybean products in China return to stability, and dump all the grain they had on the market.

Of course, a legendary version also circulated online in later generations, saying that China Grain Reserves Corporation declared: China has as much grain as it wants, you dare to buy it.

This is just to give everyone a little fun.

However, China did win. After more than two years, although domestic grain prices have risen somewhat, they are far less dramatic than those in international futures markets.

When the financial crisis hit, this price war over grain prices came to a complete halt.

Many people on Wall Street made money during this process, but not much money was made from the Chinese. The four major grain traders suffered huge losses and never cooperated with Wall Street in this way again.

Of course, China's own efforts also play a role, continuously subsidizing farmers for food security, and the No. 1 document every year is related to agriculture.

Chen Xuebing didn't know how much the price of other grains had increased during this battle, but he knew that soybeans had increased more than threefold.

He just checked the soybean price of the main contract on the US CBOT (Chicago Board of Trade). At the beginning of the year, soybean prices fell to some extent, but since May, they have risen from 500 cents per bushel to 570 cents per bushel, an increase of about 14%.

A bushel is a unit of volume. One bushel of soybeans weighs approximately 27.1 kilograms, and 36.9 bushels of soybeans are approximately equal to one ton.

That is to say, the current price of soybeans is $210 per ton.

It should rise to over $600 per ton in 2008, or at least $550.

Although it's not a very high amount, it's futures trading!
Futures trading allows for leverage.

Moreover, the delivery months are all odd-numbered months, with contracts issued every two months, allowing for compound interest.

Play a game of putting rice into a chessboard.

They were stranded in the hotel for three days.

Why use "detained"?
Sanya in 2006 was beautiful, but only within the Yalong Bay National Tourist Resort, where high-end hotels were concentrated; the environment in the city proper was less than ideal.

On the second morning in Sanya, I went to the fruit market to buy some tropical fruits that are hard to find in Chongqing for my mother and younger brother. The taxi ride of five kilometers cost 40 yuan. When I got out of the car, a child helped me open the car door, and I asked them for two more yuan.

Chen Xuebing, with Cheng Danting by his side, didn't bother to argue.

As soon as I entered the fruit market, I saw a teenage boy slashing a woman's bag with a razor blade, and everyone passing by acted as if they hadn't seen it.

Chen Xuebing shouted, and the woman quickly ran away. Suddenly, five people came over and surrounded them.

—The result was predictable.

One person suffered a dislocated hand, and four others sustained minor injuries.

Comrade Chen Xuebing acted bravely and was hit on the back, but it was determined that he had hit too hard. He also had to pay the other party 2,000 yuan in medical expenses and 800 yuan in damages to the fruit stall next door.

It really scared Xiao Cheng.

Are soldiers the ones who suffer losses?
For the next two days, Chen Xuebing didn't leave the house at all, staying in the hotel and contacting reporters to expose the matter.

They only contacted media outlets from other regions.

The report also covered taxi overcharging and the "door opening fee" for local children, but Chen Xuebing's name was not mentioned in the report.

Chen, a young man who acted bravely while traveling.

After Sina and NetEase, among other online media outlets, exposed the incident that afternoon, Sanya realized that this Chen was no ordinary person. Staff from the Civilization Office contacted Chen Xuebing using the phone number left at the police station, but Chen Xuebing ignored them and hung up.

Online media is ultimately a small blackboard; Chen Xuebing refused to communicate, so the matter was shelved for a day.

On the morning of the third day, Southern Weekly, Southern Metropolis Daily, and Yangcheng Evening News all published the news.

On May Day, a peak tourist season in Hainan, how could it withstand such reports?
This incident alarmed the provincial authorities, who ordered that the tourist be found immediately and the matter be handled fairly and objectively.

The pressure was put on Sanya.

When the municipal government gets serious, it can do anything.

In the afternoon, Chen Xuebing was having dinner at the hotel's Chinese restaurant when a large group of people entered the restaurant and headed straight for him.

"President Chen! Is that you, President Chen?"

"I'm really sorry!"

Chen Xuebing noticed that the middle-aged man who led the conversation looked somewhat familiar.

I saw him just a couple of days ago, right there at the "negotiation table" where we were having breakfast.

Only after the other person introduced himself did Chen Xuebing realize that this was Director Xia from the Municipal Government Office.

However, he didn't give them a friendly welcome and told them directly that they didn't need to apologize and that he would be leaving the next morning.

Director Xia already knew that Chen Xuebing was a prominent figure in the financial world and didn't need the money, so he smiled and apologized for a long time, saying that he would handle the matter that night.

The report has already been published and cannot be withdrawn, but what Director Xia fears even more is that Chen Xuebing's identity will be exposed in this report on his act of bravery, which could cause a huge uproar beyond the news content itself.

After repeated invitations, Chen Xuebing finally agreed to go to the police station to have the matter re-processed.

When they arrived at the police station, the guy who stole the bag had already been transferred to the detention center, and several of his accomplices who had been released were brought back. Chen Xuebing and Director Xia sat in the mediation room and heard shouting from the interrogation room upstairs for more than half an hour. A police officer came down and said, "He confessed."

He confessed to a whole host of things and also implicated several accomplices who usually ran rampant in the vegetable and fruit markets.

They all have criminal records, the lowest being a year's worth of cornbread.

Chen Xuebing was somewhat satisfied with the outcome.

On the morning of May 2nd, as Chen Xuebing was packing his things to leave his room, Director Xia arrived again.

They invited Chen Xuebing to breakfast and brought him some mangoes, a jackfruit, and a bag of small coconuts, saying they were hard to carry. After breakfast, they drove them to the airport.

Chen Xuebing's anger had subsided, and he finally agreed, calling Cheng Danting upstairs for dinner.

Cheng Danting also has a good memory; she recognized Director Xia yesterday. During dinner, she saw Chen Xuebing and Director Xia chatting about the local tourism environment, seemingly having a good conversation, so she chimed in:
“We met you a few days ago when we first arrived. You were sitting there talking about grain storage.”

Director Xia was somewhat surprised, then laughed: "Oh? Haha! What a coincidence! I was accompanying some comrades from the province to discuss cooperation with some grain and oil merchants!"

As he spoke, he sighed again: "Oh! Soybeans are being speculated on again now. Our province's supply of goods relies heavily on warehousing. By the way, Mr. Chen, you work in finance. Do you have any dealings with international soybeans? Can this fluctuation cycle affect domestic prices within one or two months?"

When Chen Xuebing heard that the other party wanted to ask a question, he was about to shake his head, but after a moment of composure, he still answered concisely:

“Normally it wouldn’t be this fast, but grain traders are panicking. 7000 yuan a ton for soybean oil isn’t high, and it’s going to rise further. Stock up as soon as possible to save a lot of money.”

China Grain Reserves Corporation (Sinograin) will release grain at a flat price, but that's only after grain prices have reached their peak. After the four major U.S. grain traders start buying up stocks, the release of grain will be gradual, and there will definitely be a significant price increase in the short term.

He also checked the domestic soybean futures price, and it has now risen more than the US price. If the US price rises further, more buyers will take delivery.

In other words, he didn't want to make dirty money or act as a facilitator when the country was in trouble. Otherwise, if he were to get involved in soybean futures on the Dalian Commodity Exchange now, given the strength of domestic speculators, very few would be qualified to be his counterparty. It would be safer than US futures, and with a large leverage, he could make several times his initial investment in a short period of time.

Director Xia was even more surprised when he heard "7000 per ton".

"Did Mr. Chen hear our conversation that day? Mr. Chen's guess was indeed correct; now they're quoting 7200 per ton." Chen Xuebing shook his head, picked up a small piece of pickled vegetable and put it into his bun, and said calmly, "7200 isn't high. If you hesitate any longer, it will go up again."

His identity, his confident tone, and the fact that his earlier guess that "7000 will rise" has become a reality made Director Xia a little restless.

"Mr. Chen, what's your source of this information?"

"Yes, but it's not convenient for me to tell you." Chen Xuebing's current status means he doesn't need to make excuses. "You should stock up on more corn, soybeans, and related agricultural products as soon as possible; it won't hurt."

The price increase of wheat is a matter for overseas markets; domestic storage levels have always been very high.

Just kidding, we have Mr. Yuan.

Although the development of hybrid rice is not directly related to wheat, both are staple foods. When it comes to food, the greatest confidence of the Chinese people is that even if they don't have wheat, they still have rice.

"this."

Upon hearing this, Director Xia became so anxious that he stopped eating and started rubbing his hands together.

"Mr. Chen, this is a major event in our province. Could you reveal a little bit of the source of your judgment? I'd like to report to the comrades in the province. They are still at the hotel."

Chen Xuebing chuckled.

If I didn't know it was a matter from your province, would I have bothered to tell you?

He's only saying these few words now that he's reaping the benefits of cooperating with the government.

"There are some things I can't say too clearly, and Director Xia can't make the decision either. Passing it up step by step would go through too many people's ears. If you really want to consult, please have the main person in charge in your province contact me. Or I can teach you a simple method: wait until it reaches 7500 before you buy it, and see if what I said is right."

If he were to do someone a favor, Chen Xuebing wouldn't do it to an office director. After saying that, he wiped his mouth and prepared to leave.

Cheng Danting listened from the side and was very nervous.

If a high-ranking official in a government office is a relative of hers, her whole family is honored. Yesterday, she showed up at the police station, and those fierce-looking people were immediately arrested.

But Chen Xuebing spoke very rudely.

Now that his interests are tied to those of Chongqing and Hefei, he has to consider whether moving to Shenzhen is worthwhile.

"Okay, Mr. Chen, I'll report to the leadership later!" Director Xia's smile remained unchanged.

……

In the afternoon, Chen Xuebing had already returned to his home in Chongqing with Hainan fruit when he received a phone call.

Upon hearing the other party introduce himself, Chen Xuebing smiled and said, "Director Yu! Hello, hello!"

"Hehe, it's nothing serious, thanks for your concern."

"Yes, there's some basis for that... The recent continuous depreciation of the US dollar has strengthened the financial attributes of commodities, and some international safe-haven funds have entered the commodity market to hedge against inflation risks..."

"Metals and energy prices have already surged, and funds are shifting to the agricultural market. Global soybean and corn reserves are low this year, making them the next hot topic..."

"And what happened in 2003..."

Chen Xuebing talked on the phone for about ten minutes before repeating some polite words.

"sure."

"Not at all, this is the result of our entire organization's research, it's not something I could have done by myself."

"Hehe, no problem. If there's anything I can help with, just give me a call."

"Haha, BOE's investment is thanks to the joint efforts of people in Anhui and Hefei. I'm just adding fuel to the fire. I hope so, I hope for cooperation."

Chen Xuebing walked out of his room with a smile.

As soon as the door opened, Yu Chunyan stumbled and almost fell inside.

Chen Xuebing quickly hung up the phone before saying:

"Mom, what are you doing?"

Yu Chunyan put her hands on her hips, showing no remorse: "Who were you calling?"

The TV in the living room suddenly got louder, and Chen Xuejin laughed loudly, "Mom has been eavesdropping on you at the door for more than ten minutes! She even told me to turn the TV off, so I couldn't watch anything!"

Chen Xuebing rolled his eyes, feeling parched, and went to the living room to drink some water.

Yu Chunyan hurriedly followed.

"What hall did you just call out for? Which hall?"

"Civil Affairs!"

"Tsk tsk, the director! You even recognize the director?" Yu Chunyan glared at him.

"Not from Chongqing!" Chen Xuebing waved his hand.

Chen Xuejin interjected, "Mom, I told you a long time ago, my brother even knows the mayor! They even invested in a company together! I've shown you the photos!"

Chen Xuebing was taken aback: "How did you find out? Where did you get the photos?"

He hadn't told his family about what had happened in the past few months, and this was the first time he had returned home since the Lunar New Year.

"You asked someone to buy a computer for your younger brother two months ago, right? He watches things on the computer," Yu Chunyan said.

Chen Xuebing frowned, glancing around for any convenient tools, and said to Chen Xuejin, "Did I buy this?"

He didn't buy it.

It's pretty obvious who bought it.

Chen Xuejin grew increasingly bold, daring to accept anything.

But this time, facing the menacing glare, Chen Xuejin didn't flinch, and instead confidently declared:

"It was you who shouted that! Sister Xin wouldn't lie to me! She said it was you who gave her the money!"

“What money did I give her…” Chen Xuebing said, then suddenly remembered that he had a card with Lin Huixiang containing more than 70 yuan.

He fell silent.

The house in Shanghai should be renovated by now, right?
Yu Chunyan knew nothing about Chen Xuebing's love life. She only knew that the girl surnamed Xin was indeed good to Chen Xuebing and was also good-looking. Since Chen Xuebing was busy, she didn't ask any more questions.

A man with ambition carries a sword; his business grows bigger and bigger, that's good too.

"Hey, Xiaobing, you know so many leaders, do you know any from Chongqing? Do you know Xiaoyu, the guy from your Uncle Zhao's family? He's taking the civil service exam now..."

Yu Chunyan was only halfway through her sentence when Chen Xuebing impatiently headed towards his room.

"Mom, why are you taking on all sorts of things at home these days?!"

"Oh! They helped our family before! When have I ever caused trouble for you, just an ordinary person?"

boom.

The door is closed.

Yu Chunyan stood frozen at the doorway.

But a few seconds later, the door opened again, and Chen Xuebing sighed.

Which organization should I apply to?

"Labor Bureau!" Yu Chunyan quickly said.

Chen Xuebing thought for a moment: "How about I take the exam for the Yuzhong District Government Office?"

Yu Chunyan's face lit up with joy, and she clapped her hands: "The government office! That'll definitely work!"

"Have him call me," Chen Xuebing said helplessly.

Yu Chunyan started laughing foolishly: "Hehe, okay, okay."

Chen Xuebing also smiled.

"Eat the fruit we brought back quickly, or it will spoil."

Behind the seemingly unattainable government job lies a huge amount of personal favor, but it's worth it if it brings a smile to my mother's face.

(End of this chapter)