Huang He swore to the heavens that this line was not prepared by him, but rather, to miss such a good opportunity to deliver lines would be a pity. As for the photographer, it was indeed an accidental event. After all, at a party hosted by Buffett, it was normal for reporters to sneak in and want to take photos.
However, Boss Huang would send someone to find this reporter later, not to suppress him, but to tell him to keep his mouth shut and his camera under control.
Instead, he would tell the reporter to boldly publish the news he captured and be a messenger of justice.
Bill Ackman was rendered speechless by Boss Huang’s reprimand. Although he wanted to get angry, Huang He was a top billionaire, and there were several fully armed bulletproof cars at the entrance. If it weren't for the security guards desperately preventing these bodyguards from entering, Boss Huang would have brought a team of fully armed security personnel following him. He really saw no need to argue with such a person.
So, Bill Ackman left. Almost everyone present was white. After hearing Boss Huang’s "h-ming gui" speech, they immediately showed their disgust towards Huang He. Thus, Boss Huang became truly detested by everyone and could quietly retreat to a corner to eat with Little Swift.
However, at this moment, Boss Huang had no appetite for eating. His mind was filled with the important news that Bill Ackman had just revealed to him.
“Boss, what exactly were you talking about with futures?” Little Swift asked in a low voice. He had been pondering this question but had no answer.
“Soybeans!” Huang He said faintly.
“Soybeans?” Little Swift was stunned, then his mind began to rapidly recall all the soybean futures data he had received, trying to find any anomalies.
“Soybeans seem to have been continuously rising for a month. However, this is normal because the Ministry of Agriculture stated that the weather in 2003 was bad, leading to a sharp decline in soybean production last year. At the same time, problems with warehouses also caused some of the soybean inventory to be damaged. Therefore, China’s soybean supply will be greatly reduced this year, which has caused soybean prices to continuously rise for a month. This seems to be a very normal situation! What’s strange about it?” Little Swift muttered to himself, confused.
[PS: The soybean crisis began in August 2003. For the sake of the plot, it has been postponed by a few months. This is specifically stated.]
“This is naturally somewhat strange. Soybeans are harvested in September, and by December, national soybean production data will be compiled. So, in the past, the Ministry of Agriculture usually announced data in early January.”
“However, the announcement of today’s data was delayed by a month, and was announced in early February!” Huang He said.
“Well, that’s also quite normal. Those guys often delay the announcement of data for various reasons. Sometimes delays of up to six months can happen, so a month is really nothing!” Little Swift said.
“Then let’s talk about this fire. The warehouse that caught fire was located in an agricultural hub in the United States. This is a huge agricultural logistics center. In addition to storing a large amount of soybeans, it also stores large quantities of other agricultural products such as corn and wheat.”
“Don’t you think this is very strange? We only received news of a severe reduction in soybean inventory, but no news of a reduction in any other agricultural products. For a comprehensive warehouse, and an agricultural products warehouse at that, isn’t this too peculiar?” Huang He asked.
“Perhaps it was just a small fire, and it only ignited in the warehouse storing soybeans, without affecting other products!” Little Swift said.
“Of course, this possibility exists. However, the biggest problem is that the news of the soybean fire was released at 10 AM on February 3rd. But on the previous day, February 2nd, soybean prices were still falling. After the news was released, the price began to soar, rising by 20% in almost a day.” Huang He said.
“Uh… isn’t this a very normal data point?” Little Swift was confused. “Is it abnormal for prices to rise after news is announced?”
“That is certainly not normal!” Huang He said with a cold laugh. “Have you forgotten our experience this time? Before Assam was arrested, the oil futures price began to plummet three days in advance. But this time, the fire occurred in the early morning of February 2nd. Theoretically, some entities should have learned about the warehouse fire on February 2nd.”
“But these institutions did not buy large quantities of soybeans in advance. Instead, they honestly waited until the official announcement before rushing to buy soybeans and begin building positions, which then caused soybean prices to rise… Do you think this is normal?”
…Little Swift was speechless. Yes, it seemed normal, but when placed in the context of American capitalists, it was indeed exceptionally abnormal. How could they not engage in insider trading?
“So, my guess is that this soybean price increase is a systematic, planned team speculation!” Huang He said faintly. “Whether it’s the news of reduced soybean production or the news of a warehouse fire, they were deliberately created to provide an excuse for soybean prices to rise.”
“And this excuse is meant to deceive another faction. In order to make everything appear accidental, with no human factors involved, they would honestly choose to push up prices after the news was released.”
“This method appears very clever, but it cannot deceive someone like Bill Ackman, who understands Wall Street and every bone of those capitalists like the back of his hand. That’s why he could find problems from this abnormal data and detect that a large-scale short selling of soybeans was about to begin!” Huang He said.
“Short selling?” Little Swift was once again dumbfounded. He asked foolishly, “Shouldn’t this be long selling?”
“No… this is short selling!” Huang He sighed, recalling how many people in his previous life might not have known, but the soybean turmoil that ultimately destroyed China’s entire soybean industry.
Many people may not know that before 2018, 80% of China’s soybean industry was actually controlled by foreigners. Whether it was Golden Dragon Fish under the Yihai Kerry Group, or brands that sounded like domestic products such as Luhua and Fulinmen, etc., for cooking oil, they were already foreign-controlled.
At its peak, foreign capital controlled 85% of the entire soybean market. This is a fact that makes people feel helpless. So why was such a good market controlled by foreigners by 85%?
Does it mean that Chinese people are all fools and cannot manage this market well?
Of course not. The origin of all this traces back to this year’s soybean turmoil.
First, it must be understood that about 80% of China’s soybeans are imported from the international market.
Because of the United States’ leadership in genetically modified technology, their soybean production and planting conditions are more relaxed, their yield is higher, and especially their oil extraction rate is higher.
Take the famous Northeast Golden Soybeans from the 1990s as an example. They were our best soybeans, but their oil extraction rate was only 5/6 of imported soybeans, while their production and planting costs were more than 50% higher.
Thus, even after a ship of foreign soybeans arrived at domestic ports, after adding import duties, the remaining selling price was still only about 85% of that of Northeast soybeans. The natural price advantage naturally destroyed the domestic soybean planting industry.
Although the taste of these imported soybeans is extremely poor, and the soy milk made from them is not very tasty, these soybeans are used for oil extraction, so it doesn’t matter. xxs one
However, this only destroyed the soybean planting industry; it did not seem to destroy the soybean processing industry, until the soybean crisis of 2004 began.
Historically, when soybean prices rose for almost six months, at first, domestic soybean processing enterprises chose to follow the market. They purchased soybeans as needed, according to their plans and market prices. At worst, they would pass the costs on to consumers, so they wouldn’t lose money.
However, it just kept rising for six months. Soybean prices on the Chicago Mercantile Exchange rose from a low of 540 cents in August 2003 to 1060 cents in April 2004, setting a new high in nearly 30 years. This is equivalent to the domestic Chinese price rising from 2300 yuan/ton to 4400 yuan/ton.
And such a terrifying upward trend naturally caused panic among a large number of Chinese soybean crushing enterprises. In addition, at this time, a large amount of media…
Whether it was American media, European media, or domestic media.
Alright, in short, media worldwide, under the control of some international speculators, began to spread rumors, saying that soybean prices had not yet reached their peak, and would rise to 5,000 yuan per ton in another month, and to 6,000 yuan per ton in three months.
And it seemed like the weather in the United States would be bad again this year, leading to potential production cuts. It was not impossible for the price to rise to 10,000 yuan per ton.
Anyone with common sense would know that these words were nonsense, maliciously creating panic. But the problem was that three people could make a tiger. When almost all the media in the world were hyping the same topic, many enterprises were completely panicked.
Thus, Chinese soybean crushing enterprises began to collectively purchase over 8 million tons of soybeans at the price of 4,300 yuan per ton. The rapid rise in soybean prices caused great panic among China’s soybean crushing enterprises, so in March 2004, they collectively “rushed to buy” over 8 million tons of soybeans around the historical high price of 4,300 yuan/ton, with a total value equivalent to 43 billion yuan.
Then these international financial speculators instantly reversed their positions and began to frantically sell soybeans. In just two to three months, soybean prices fell from 4,400 yuan per ton to 2,200 yuan, halving their price.
This left those soybean crushing enterprises, who thought they had made a huge profit, instantly dumbfounded. They were all holding soybeans bought at double the price. How could they compete with those who bought soybeans at half the price?
As a result, what was originally industry-wide profitability turned into industry-wide losses. It is estimated that at that time, thousands of Chinese soybean crushing enterprises went bankrupt, and these enterprises were all acquired at low prices by international capital. This is why 85% of the market was controlled by foreign capital.
Because the entire Chinese soybean crushing industry was completely wiped out by international speculators, this war later became a classic case study for countless financial institutions and also became an eternal joke.