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3 Big Things Today, April 5
1. Soybeans, Grains Rise Amid Cautious Optimism on Trade Talks
Soybeans and grains were modestly higher in overnight trading on cautious optimism that negotiators will find a solution to the ongoing U.S.-China trade dispute before proposed tariffs become a reality.
China yesterday announced tariffs on $50 billion worth of U.S. goods including soybeans, corn, beef, and durum wheat. The Asian nation said it would impose the levies in response to the Trump administration’s $50 billion tariffs on Chinese goods along with levies on imports of steel and aluminum.
The initial reaction was swift with soybeans yesterday dropping more than 50¢ before rebounding to close down more than 20¢. Cooler heads prevailed in the overnight session as traders are optimistic that the countries will come to some sort of agreement that avoids the tariffs.
Officials from both the U.S. and China said yesterday that they’re willing to negotiate to ensure the taxes on goods are never implemented.
Soybean futures for May delivery rose 2¼¢ to $10.17½ a bushel overnight on the Chicago Board of Trade. Soy meal added 50¢ to $382.30 a short ton, and soy oil gained 0.09¢ to 31.77¢ a pound.
Corn futures rose 1¼¢ to $3.82¼ a bushel overnight.
Wheat added 4½¢ to $4.60¼ a bushel in Chicago, while Kansas City futures gained 3¼¢ to $4.89¼ a bushel overnight.
2. Farm Groups Say Rural Economy Will Bear Brunt of Trade Dispute, Urge Sides to Find Solution
Farm groups are obviously unhappy about the tariffs China has proposed implementing with many saying the U.S. needs to back off its pledge to impose levies on goods from the Asian nation to avoid retaliation. Here’s a roundup of reactions from some grower groups:
* National Corn Growers Association Chairman Wesley Spurlock, a farmer from Texas, said in a statement that the list of tariffs on food and agriculture make U.S. producers the “first casualties” in the trade dispute with China.
“Instead of new protectionist policies, our nation’s focus should be on growing market access and promoting expanded trade from our most competitive industries,” he said. “We do have a window of opportunity to reach a mutually beneficial trade position with China until the time that tariffs are fully implemented. We need to be measured, professional, and business-like in our approach to keeping the trade doors open with China. Equally important, we need the president to understand the implications that these trade actions have for America’s farm families.”
* Meat Export Federation President Dan Halstrom said since the 2017 reopening of China to U.S. beef, the industry has made an “exceptional effort” to delivery high-quality beef to the Asian country.
“Over the past nine months, interest in U.S. beef has steadily gained momentum in China, and our customer base has grown,” he said. “But if an additional import tariff is imposed on U.S. beef, these constructive business relationships – and opportunities for further growth – will be put at risk. USMEF is hopeful that this trade dispute can be resolved without China introducing additional obstacles for U.S. beef.”
* American Farm Bureau Federation President Zippy Duvall said the threatened retaliation against the U.S. tariff proposal tests the patience and optimism of farm families facing the worst agricultural economy in 16 years.
“This has to stop,” he said. “Growing trade disputes have placed farmers and ranchers in a precarious position. We have bills to pay and debts to settle, and we cannot afford to lose any market, much less one as important as China. We urge the U.S. and China to return to negotiations and produce an agreement that serves the interests of the world’s two largest economies.”
* Senator Charles Grassley, an Iowa Republican and a member of the Senate Ag Committee, said in a statement that China needs to rein in its unfair trade practices and policies, including theft of U.S. intellectual property. Farm families, however, will unfairly take the biggest hit in the trade dispute should the tariffs be imposed.
“The United States should take action to defend its interests when any foreign nation isn’t playing by the rules or refuses to police itself,” he said. “But farmers and ranchers shouldn’t be expected to bear the brunt of retaliation for the entire country. It’s not fair, and it doesn’t make economic sense. The administration knew that if it imposed tariffs on Chinese goods, China would retaliate against U.S. agriculture. I warned President Trump as much in a White House meeting in February.
“If the federal government takes action on trade that directly results in economic hardship for certain Americans, it has a responsibility to help those Americans and mitigate the damage it caused.”
3. Freezing Weather Moves Into Eastern Midwest Where Soft Red Winter Wheat is Grown
Freezing weather has moved east into parts of several states this morning, potentially threatening soft red winter wheat in some areas.
Freeze warnings have been issued in Missouri, Arkansas, southern Illinois, southern Indiana, Kentucky, Tennessee, Mississippi, and Alabama, according to the National Weather Service.
In southern Missouri, Illinois, and Indiana, temperatures fell to the middle or upper 20s for several hours overnight, the NWS said in a report. Subfreezing temperatures are forecast to continue through the early morning.
The cold weather follows flooding in the region after rainfall the past few weeks has left low-lying areas under water. Several rivers and streams are still above flood stage with some still rising, the NWS said.