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Corn Outlook:
The Trump Administration’s tariff agenda against Mexico, Canada, and China has rattled the grains this week. However, President Trump’s post on Social Truth said Mexico would not be required to pay tariffs on goods under the USMCA agreement through April 2nd which has given them a boost. In the meantime, China has retaliated with a 15 percent tariff on U.S. corn. However, they are not a consistent customer and have not made any purchases in four weeks. On the other hand, Mexico has been stepping up their imports of corn in anticipation of a tariff and purchased a record 17.2 million tons so far this season. Looking at export inspections last week, they exceeded the previous week at 53.2 MB, and have been holding their own since early February in meeting USDA’s target of 2.450 BB. The bottom line is that volatility will be on the upswing as long as President Trump plays a cat and mouse game in his tariff agenda
Bean Outlook
Anxiety has skyrocketed because the tariff imposed by the Trump Administration against Chinese products became effective this week. China has retaliated by placing a 10 percent tariff on U.S. soybean imports, as well as suspending imports from three companies. While this has frayed the nerves of many causing the market to tumble, it must be realized that for the past several years, China has been increasing their reliance upon Brazil for soybeans. This is evident from export inspections last week at 25.2 MB with China taking only 12.9 MB. Be aware that deliveries to China have declined since mid-November and are down 72 percent, while our overall shipments have fallen 64 percent. The bottom line is that tariffs imposed by China on our soybeans is more of a slap on the hand and may not have the effect that is being feared.
Wheat Outlook:
China has placed a 15 percent tariff on U.S. wheat imports in response to the tariff imposed by the Trump Administration. However, this should not be a big deal as they are not a large customer and have not made any purchases in four weeks. Meanwhile, our exports are disappointing. Last week, inspections were 14.3 MB and must average 21.2 MB each week to meet USDA’s projection of 850 MB. Currently, they are on track for 760 MB.
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