China Doesn’t Need US Beans: Teucrium MD On Why Investors Stay Bullish – Teucrium Soybean Fund ETV (ARCA:SOYB)
Soybeans are back at the center of the global commodities conversation. Prices have climbed to a one-month high on renewed U.S.–China trade optimism, even as Beijing reportedly halted U.S. soybean purchases for the first time in seven years amid escalating trade tensions.
Against this volatile backdrop, investors are once again watching the Teucrium Soybean ETF (NYSE:SOYB), the only fund that offers direct exposure to Chicago Board of Trade (CBOT) soybean futures, as both a short-term trade and a long-term diversification tool.
“Ideally there are positive developments from the upcoming U.S.–China discussions,” said Jake Hanley, Managing Director and Senior Portfolio Specialist at Teucrium. “China doesn’t need U.S. beans, but they know they have leverage on this point and can offer agricultural purchases as part of any concession.”
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Short-Term Headlines, Long-Term Fundamentals
Hanley noted that the day-to-day soybean trade “remains susceptible to headlines which are all about U.S.–China trade.” Yet he emphasized that ETF investors tend to think beyond the noise. “ETF investors typically have longer-term time horizons and focus on the fundamentals, which in soybeans are leaning neutral to bullish,” he said.
Those fundamentals include rising domestic demand from biofuels — where soybeans are being increasingly crushed for renewable energy production — and steady global demand for animal feed. “Soybeans crushed for biofuel are helping support local markets,” Hanley said. “Globally, feed demand remains robust, growing roughly 2% annually.”
Unlike previous years, weather has not been a major factor this harvest season. “Weather has cooperated,” Hanley noted. “Not an issue this season.”
ETF Flows And Strategy: Diversification Meets Discipline
According to Hanley, SOYB has seen renewed inflows as prices rebounded from August lows. “Most commodity traders are looking for momentum plays,” he said. “Uptrends typically attract more flows. Allocators, on the other hand, are looking for fundamental stories and diversification benefits — not necessarily chasing price trends.”
SOYB tracks the Teucrium Soybean Index (TSOYB), which reflects a weighted basket of CBOT soybean futures contracts — including the second-to-expire, third-to-expire, and November contracts following the third. “By spreading holdings across the curve, we attempt to mitigate the negative impacts of contango, while providing investors exposure further out the curve,” Hanley said.
He added that seasonality also plays a role. “In the U.S., there’s one harvest per year, and at that time there’s as much soybeans as there will be for the entire year — that supply typically weighs on prices,” he said. “For longer-term investors, harvest season can sometimes offer an entry point.”
Beyond Inflation: The Case For Agriculture In 2025
While inflation fears have cooled, Hanley believes investors still see merit in commodities as portfolio stabilizers. “An investor considering exposure to grain markets today is not likely thinking about inflation,” he said. “But the scars from 2022 — when both stocks and bonds were negative — are still fresh.”
As for whether agricultural commodities are entering a new supercycle, Hanley is cautious. “It’s more nuanced,” he said. “Agriculture markets march to their own fundamentals, but they don’t exist in a vacuum. The uncertainty around trade and policy will remain a defining feature of markets for the foreseeable future.”
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