What the Mainstream Media Doesn't Get About Trade Wars

The opinions from the mainstream press on geopolitical issues are mostly useless, designed to create fear for the sole purpose of a ratings boost.

A talking head on TV will tell you to sell all your stocks before a land war with Russia, or that the U.S. dollar is about to collapse into dust.


Here's the latest nonsense being spewed: Trade wars with China over soybeans will destroy American farms in the heartland.

"China Strikes at Trump's Rural Heartland with Tariff on Soybeans," said one sensational headline on an April 4 Bloomberg report.

Today, I'm going to explain why all the hype over the soybean tariff is exaggerated.

And instead of telling you to panic, I'll show you exactly how to turn the trade war freak-out into a long-term profit play...

Understanding the Chinese Trade War

China announced on April 4 that it could slap U.S. exporters with 25% tariffs on a slew of agricultural products.

This laundry list includes corn, pork, and sorghum. This is a real problem, as 20% of all trade between the United States and China centers on agricultural trade.

But the real "threat" - as the media claims - is to U.S. soybean farmers.

In 2017, farmers exported $13.9 billion worth of soybeans to China, according to Farm Policy News. That's more than half of all U.S. soybeans imported every year.

Soybeans are critical ingredients to creating the meal for the booming livestock industry that has thrived in Asia. Between 1961 and 2000, the production of livestock products in Asian and Pacific region has increased almost sixfold, according to the Food & Agriculture Organization of the United Nations.


The Farms of the Future Are Here

Look, I can understand why the mainstream media is pushing the fear sentiment.

Losing such a big importer like China could hurt hard-working American farmers, which is an easy way to get eyeballs on newspapers and TV shows.

Getting your attention brings in millions in ad revenue.

But they're missing the actual math behind the threat, and that's creating a new opportunity for well-informed investors...

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I'm a trade, technology, and agricultural economist. I spent the last decade studying international policy and working backroom deals in food and financial trade.

And I've worked with some of the top negotiators and political risk experts in the world.

You see, the problem with the so-called "trade war" is that 95% of this story is pure noise...

Why China Won't Follow Through with Soybean Tariffs

China is going to import more than 100 million metric tons of soybeans next year, and the simple reality is it can't do it without the United States.

Analysts believe China will face a soybean shortage between 20 million metric tons and 31 million metric tons if it loses access to U.S. soybeans.

China naturally says it's less, but most American agricultural economists will put that figure above 30 million metric tons.

Despite all of China's bluster, the dirty little secret is that China needs to purchase American soybeans.

And it isn't the only importer of soybeans, so it doesn't have nearly as much leverage as the media claims.

Argentina, the third-largest soybean producer in the world, is facing one of its worst droughts in 100 years. The country - desperate for supply for its own soybean-crushing industry - just made its largest purchase of American beans in 20 years on April 10.

That's right: The third-largest soybean producer is importing soybeans from the United States. China simply isn't the only destination for American soybeans.

Whether it likes it or not, China needs to rely on America.

The reality is, China can't afford to follow through on its threats, no matter what the media wants you to believe. Investors who can cut through the noise can find a juicy, 16% potential profit opportunity in the soybean market waiting for them.

And with the Dow Jones down 0.03% so far in 2018 and stock prices subject to wild price swings, this profit opportunity is nothing to ignore...

The Best Way to Profit from the Soybean Trade War

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Archer Daniels Midland Co. (NYSE: ADM) is the best way to profit from the soybean market.

This is a rock-solid company that will benefit not only from increased demand for food commodities, but also from an uptick in the trading of food commodities.

ADM has a growing presence in emerging markets, and its massive trading operations recently expanded, with a 20-year commitment to trading at the Port of Santos down in Sao Paulo, Brazil.

The firm originates about 11 million metric tons of soybeans, corn, wheat, cotton, palm, and sunflower in South America.

It also operates a massive network of more than 270 ingredient-manufacturing facilities across North America.

And when China backs down on its trade war threats, ADM will continue to be one of the most important companies managing the soybean trade between the United States and China.

Archer Daniels just signed a memorandum of understanding to bolster soybeans exports with China's state-owned COFCO in November 2017.

Archer Daniels Midland pays a dividend of $1.34, which is a healthy yield of 2.96%. Its February dividend hike was its 43rd consecutive annual increase.

That shows this company is well managed, consistently raking in money, and handing it back to shareholders.

It also has a Money Morning VQScore™ of 4.45, which means it's a strong buy right now, according to our proprietary stock analysis tool.

And thanks to the media's hype about a soybean trade war, it's being overlooked by Wall Street and presenting savvy investors with a great buying opportunity at current prices.

In fact, Buckingham Research expects to see a steady climb in the ADM stock price.

In the next 12 months, Buckingham projects the ADM stock price will climb from $45.65 per share to $53 per share, a 16% return.

Look, I'm not surprised when analysts provide hasty generalizations about trade policy.

Agriculture is still one of the best industries in the world to find stocks with strong appreciation, upside, and yield.

But even during an economic recession, people aren't going to stop eating, and ADM is a key cog in the global agricultural trade.

Your Financial Future Is at Stake (Are You Prepared?)

If you're like most Americans, you've felt a sense of market turmoil ahead. We could be in for another white-knuckle ride... a "Great Reckoning," if you will.

The vast majority of folks don't see this coming, and those few who do are not preparing properly... nor profitably.

So ask yourself, right now: Are you where you want to be financially?

If the answer is yes, that's great.

If the answer is no, then understand that you are not alone - and you need to click here now...

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About the Author

Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.

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