Written Commentary
OPENING COMMENTS
Ag Fundamentals
Traders hitting the sidelines following the higher than expected tariffs announced by President Trump yesterday. China and the EU seem to be the main targets in the new trade policy. Mexico and Canada were left off the list for now. China has already made a statement they will retaliate against these tariffs with policy of their own if they are not immediately cancelled. China’s Ministry of Commerce said, “will resolutely take countermeasures to safeguard its own rights and interest”. From what I understand, the “reciprocal tariffs” were mostly calculated based on the trade deficit the US has with each country. For example: the US has a $235.6B trade deficit with the EU and the US imports $605.8B from the EU. $235.6/$605.8B = 39%. The reciprocal tariff is roughly half of each of these calculations (20%). Overnight both corn and beans gaped lower, soybeans taking the biggest hit as China covers about 66% of the global soybean imports. May corn seems to be hanging onto 450’0 as support. Mexico, the largest corn buyer was left out of the conversation yesterday. Overall the market is waiting for tariffs to ease or increase based on the reactions of each country. Currencies are on tilt today while uncertainty still grips the global trade market. The dollar is down over 2 points on the index with lows below 101.0. Crude oil dropped over $5 per barrel to trade below $67. As we wait for countries to react we are also watching how some synergies between countries evolve. This new trade policy could push many US trade partners to adjust their trade routes to China, South America, the EU and others. Expectations are now that the federal reserve will likely cut rates
Weather
The drought monitor this morning was mostly unchanged from last week with some improvements in northern Wisconsin and northern Indiana. Areas that degraded slightly were southern Missouri and northeast Kansas.
April 2nd Tariffs
Weekly Export Sales
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Export & World News
The USDA confirmed yesterday a sale of 135K MT if US soybean meal to the Philippines for the current marketing year.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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