3 Big Things Today, May 31
1. Corn, Soybeans Lower After Trump Vows to Impose Tariffs on Mexico
Corn and soybeans were lower in overnight trading amid rising trade tensions, this time with Mexico.
President Trump said yesterday that he would impose a graduating tariff on imports of Mexican goods starting at 5% until the country stops illegal immigration into the U.S.
The White House said the tariffs will start on June 10 and would increase to 10% if Mexico doesn’t comply. The rate will go to 15% on August 1, 20% on September 1, and 25% on October 1.
Mexico is the biggest buyer of U.S. corn, and some investors worry that agriculture will be again used as a pawn in a trade war with Mexico as the country likely will impose countermeasures on imports of U.S. goods.
Investors are still concerned about the trade dispute with China. The country this week said it would halt future purchases of U.S. soybeans, though it won’t cancel cargoes it’s already ordered, according to Bloomberg.
Corn futures for May delivery fell 5¼¢ to $4.31 a bushel overnight on the Chicago Board of Trade.
Soybeans for May delivery fell 4½¢ to $8.84½ a bushel. Soy meal lost $2.20 to $325.20 a short ton, and soy oil declined 0.24¢ to 27.54¢ a pound.
Wheat for May delivery lost 8¼¢ to $5.06¼ a bushel in Chicago, while Kansas City wheat lost 6¢ to $4.73 a bushel.
2. Ethanol Production, Stockpiles Decline in Seven Days Through May 24
Ethanol production and stockpiles both fell week to week, according to the Energy Information Administration.
Output of the biofuel in the seven days that ended on May 24 averaged 1.057 million barrels a day, down from 1.071 million the previous week, the EIA said in a report that was delayed due to Memorial Day.
In the Midwest, by far the biggest-producing region, production declined to an average of 976,000 barrels a day last week, down from 993,000 the previous week. Output also declined in the Rocky Mountain region, which dropped to 12,000 barrels a day from 13,000, the government said.
Gulf Coast production was unchanged at 24,000 barrels a day, on average, while West Coast output stayed at 19,000 barrels.
Producers on the East Coast increased production to 26,000 barrels a day from an average of 21,000 barrels, the EIA said.
Stockpiles also fell, dropping to 22.624 million barrels as of May 24. That’s down from 23.404 million the previous week, according to the agency.
In other news, the USDA will release its Weekly Export Sales Report this morning. Sales of corn are pegged from 450,000 to 850,000 metric tons, soybean sales are seen at 250,000 to 650,000 tons, and wheat sales are expected to be from 200,000 to 600,000 tons, researcher Allendale said in a report this morning.
3. Storms Roll Into Wisconsin, Michigan as Strong Winds, Possibly Hail Expected
Thunderstorms that have been hitting much of the Midwest this week are now moving north into Wisconsin and Michigan, according to the National Weather Service.
Storms are likely tonight north of Milwaukee, with a few becoming severe with large hail and strong winds, the NWS said in a report this morning.
Across Lake Michigan in the state of Michigan, strong thunderstorms are likely today and tonight with strong winds, rain and hail. More storms are in the forecast for the weekend, with some becoming severe Saturday and Sunday, the agency said.
Still, the central and western Midwest isn’t out of the woods yet. There are chances for thunderstorms today and tonight in parts of southern Iowa, west-central Iowa, east-central Nebraska, and southern Nebraska, the NWS said.