Back home, Kenny was still puzzled. There must be a reason behind any change in the financial market.
The surge in Andon Health's stock price at the end of 2021 must have been due to some institutions or individuals getting advance notice and acting preemptively. Only by having an accurate estimate of Andon Health's market value after signing a major deal could they remain confident in their position.
There are rumors online that a certain brokerage firm executive has a broad perspective; even after Jiuan Medical's stock price doubled, he didn't sell and held onto his shares until it increased tenfold.
This kind of wishful thinking from retail investors is not reality. Big shots who double their money and hold onto their shares until the price rises definitely have inside information and know the target price, not some kind of grand vision.
This follows the same logic as Wangfujing Department Store in the early 2020s.
Similarly, a sudden plunge in futures prices means that the selling pressure is far greater than the buying pressure.
Although regional conflicts have continued during this period, and various forces have been making harsh statements.
However, even shortly before the conflict was most likely to break out, soybean futures did not experience such a sharp and unresisting plunge.
Because the global supply of oils is tightening, geopolitical conflicts have led to a continuous rise in commodity prices, with Brent crude oil prices even breaking through 98 US dollars per barrel.
There is a certain correlation between crude oil prices and edible oil prices. It is a very strange phenomenon that crude oil prices rise while soybean-related products fall.
After returning home, Kenny began collecting information from various sources, trying to determine the logic behind this abnormal phenomenon.
To ensure the timeliness of his futures trading information, he even hired someone in faraway Brazil to calculate the seasonal weather conditions and their potential impact on soybean production every day.
There's no need for anyone to specifically monitor Amerike's production. The mature futures market has led to specialized companies that handle this data business; you can simply buy the data you need from them.
America is the largest soybean producer, and Brazil is the second largest.
Brazil and America together produce more than 50 percent of the world's total output.
Due to industrialized farming, Amerika's yields are relatively stable. Therefore, Brazil's output can cause significant fluctuations in the futures market.
"Recently, the quantity of offshore soybeans in Brazil has not increased significantly."
"America's soybean production is also very stable. Could it be that the Fed's interest rate hike expectations have been brought forward?"
"It's impossible for soybean futures to fall only when the Fed raises interest rates."
America has been saying for a long time that it will raise interest rates this year, and that it must raise rates this year. However, the number and timing of the rate hikes have remained uncertain.
A Federal Reserve rate hike means monetary tightening, causing previously injected US dollars to flow back into the United States. The Fed uses this method to curb inflation.
A Fed rate hike is a foregone conclusion; the only question is the number of hikes. Initially, it was said to be once, then three times, and later the most outrageous prediction in the market was that the Fed would raise rates seven times this year.
Kenny couldn't find the reason for the soybean futures crash, and he figured he could only wait and see; the news would be released sooner or later.
Some people got the information in advance, while others only found out when the news was announced.
At 5:40 a.m., Kenny was woken up by a phone call, "Who is it?"
Before he could finish speaking, a loud voice came through the receiver: "Look at the telegram group! China has invented a super soybean that can achieve an average yield of 800 jin per mu, and the oil extraction rate exceeds 20%!"
Kenny was wide awake. On the other end of the phone was his old friend Duke, who had worked with him as a trader years ago and was still on the front lines of futures trading.
As a veteran of the soybean industry, he is well aware of the value of an average yield of 800 jin per mu.
In America, the average yield of soybeans is around 435 jin per mu (approximately 26.75 catties per hectare). In extreme cases, the yield can exceed 1,000 jin per mu, but this is extremely rare.
Soybeans are a light and temperature sensitive plant, and their yield is affected by many factors.
If an average yield of 800 jin per mu can be achieved, then the current market price of soybeans will drop by at least 20%.
He quickly determined that yesterday's price drop had almost reached its bottom.
Kenny opened his phone and glanced at the video in the group chat:
"The Chinese Academy of Agricultural Sciences has developed a super soybean with a yield of 800 jin per mu (approximately 400 kg per hectare). This genetically modified soybean will be the first genetically modified crop approved in China after the country permitted genetic modification technology..."
He saw in the group chat that this was China's most famous news program, and the female host was introducing this super soybean.
The more he listened, the more shocked he became. When did China's genetic modification technology become so advanced? It was actually so much ahead of America in soybean seed research.
"Are these soybean seeds developed in China?"
"They say they developed it themselves, but who knows? Maybe it's Syngenta."
In 2016, the Chinese company, namely China Import and Export Chemical Company mentioned earlier, spent 43 billion US dollars to acquire Syngenta, a Swiss agricultural chemical giant, which is also a seed giant.
It's worth noting that Monsanto also wanted to acquire Syngenta at the time, and Monsanto offered an even higher price of 45 billion US dollars.
“Syngenta doesn’t have that capability. If they had that technology R&D capability, they wouldn’t have been acquired by China.”
"Super soybeans, I wonder if we will import them. It's unbelievable that one day we will have to import seeds from China."
"Why not? China's soil and environment can achieve a yield of 800 jin per mu on average, and America can break through 1,000 jin per mu."
Due to limitations in environmental conditions and breeding capabilities, China's soybean yield lags far behind that of America. The average yield per mu (unit of land area) in America is 435 jin (unit of weight), while in China it is only 265 jin (unit of weight).
Moreover, the oil yield of Chinese soybeans is on average 3-5 percentage points lower than that of imported genetically modified soybeans. For every percentage point increase in the average oil yield, the profit from processing one ton of soybeans can increase by 150 yuan.
This is why China provides subsidies for soybeans; without subsidies, no one would grow them.
How do you know they're telling the truth and not just propaganda?
"There's no need to lie about this kind of product. If it's a product that's being sold on the market, someone can buy it and test it to find out if it's real or fake. What's the point of lying? Don't be obsessed."
"No wonder soybeans and related products all plummeted yesterday; Chinese people made a fortune shorting these products."
"Those despicable Chinese people, using such methods to manipulate the market!"
"Yesterday it dropped 12 points, and soybean futures could fall by up to 8 points after the market opens today, but I don't think it will fall that much."
Although it was only 5 a.m., the discussion in the soybean futures trading Telegram group was very lively. Kenny couldn't sleep after watching for a while, so he started to think about how the futures price would move when the market opened the next day, and what profit he could make.
Thousands of miles away from Chicago, the office building of China Seed Group was filled with joy. It was already 8 p.m., but no one had left their workstations yet.
After merging the financial sector of China National Import & Export Corporation, the State-owned Assets Supervision and Administration Commission (SASAC) also transferred a group of people from CITIC Futures and CITIC Securities' futures companies to specifically set up a futures trading department.
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