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3 Big Things Today, April 4

Soybean, Grain Futures Plunge Overnight; China Hits U.S. Ag With Tariffs on Beans, Corn, Beef.

1. Soybeans, Grains Plunge as China Announces Tariffs Hitting Ag Sector

Soybeans and grains plunged overnight after China announced tariffs on $50 billion worth of U.S. goods including soybeans, corn, beef, and durum wheat.

China’s response to the Trump administration’s $50 billion tariffs on Chinese goods, along with levies on imports of steel and aluminum announced last month, came after weeks of concern from producers, traders, and analysts.

The announcement came after China last week wasn’t on the list of countries that bought old-crop soybeans from the U.S. That was unusual in that the Asian nation is usually at the top of the list.

The announcement comes at a bad time for U.S. growers, as the price of soybeans was just starting to make gains after a Prospective Plantings Report from the USDA last week forecast growers would seed fewer acres with both soybeans and corn.

Soybean futures for May delivery dropped 48¼¢ to $9.89¾ a bushel overnight on the Chicago Board of Trade. Soy meal declined $12.30 to $367.70 a short ton, and soy oil fell 0.68¢ to 31.66¢ a pound.

Corn futures plunged 14¾¢ to $3.73¾ a bushel overnight.

Wheat dropped 9¾¢ to $4.47¾ a bushel in Chicago, while Kansas City futures lost 8½¢ to $4.76¼ a bushel overnight.


2. China Tariffs Take Aim at American Soybeans, Corn, Beef; $50 Billion Worth of Goods Included

China said overnight it would impose tariffs on U.S. soybeans – potentially cutting into the $12.3 billion worth of the oilseeds shipped to the Asian country every year – corn, durum wheat, and beef.  

The U.S. is the world’s second-largest shipper of soybeans behind only Brazil, while China is easily the largest buyer of the oilseeds.

The tariffs announced overnight, which totals 106 U.S. items including civilian aircraft, engines, and parts worth $16.3 billion and cars valued at $10.5 billion, are on about $50 billion worth of U.S. goods. They’re obviously a direct response to the Trump administration’s announcement of levies on $50 billion worth of Chinese goods. 

The president last month also announced tariffs on imports of aluminum and steel.

While many saw the U.S. tariffs as simply a way to get other countries to the negotiating table, it now seems a trade war is inevitable unless a deal can be worked out. It’s still unknown when or even if the levies announced overnight, which are expected to be about 25%, will go into effect. China is reportedly waiting to see if the U.S. acts on its promise to impose its own tariffs. 

Zhu Guangyao, China’s finance minister, reportedly told reporters on Wednesday that there’s time before the tariffs take effect to “negotiate and cooperate.”

Zhang Xiaoping, the China director of the U.S. Soybean Export Council, told Reuters that it’s “regrettable” that China imposed the tariffs and that American soybean producers have done “everything” they could to prevent the levies.


3. Dry, Cold Weather Continues to Plague Southern Plains Wednesday

Dry and cold weather continue in the Southern Plains today as low humidity and strong winds make for tinderbox-like conditions in some areas while freeze warnings were issued in others.

The red-flag warning indicating conditions are ripe for wildfires, stretches from deep into the Texas panhandle north into southern Nebraska, according to the National Weather Service.

Humidity is seen as low as 5% in the panhandles of Oklahoma and Texas and southwestern Kansas with winds sustained at 25 mph and gusting up to 35 mph, the NWS said in a report early Wednesday morning.  

Freeze warnings, meanwhile, have been issues from west-central Oklahoma east all the way through Tennessee, NWS maps show.

Temperatures in eastern Oklahoma and western Arkansas overnight fell into the mid-20s in some areas, according to the agency. Strong winds are helping keep temperatures down, and vegetation, including winter wheat that’s likely started growing again after overwintering, is at risk, the NWS said.

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