This trade war-sensitive commodity is about to rip higher

Trade war conflicts have caused soybeans to suffer this year, but after a 10 percent surge in the last month, one trader expects the rally to continue to grow.

Bill Baruch, president of Blue Line Futures, told CNBC's "Trading Nation" on Tuesday that he has a bullish outlook on soybeans and China. Here is what he had to say:

· The biggest casualty from China's retaliation to the U.S. tariffs was soybeans.

· Soybeans lost as much as 22 percent from the May 29 high through the July low, their worst levels since December 2008, before stabilizing.

· Soybeans are extremely undervalued at $9 a bushel because China doesn't start making its largest purchases until October and there is light at the end of the tunnel for this war.

· The recent swing higher and breakout of a cup and handle pattern is even more important, this level aligns three separate proprietary technical indicators and a close above 9.23 a bushel is extremely bullish.

· We want to be long soybeans above 9.23.

Soybean futures were trading around 9.13 a bushel on Wednesday.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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