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3 Big Things Today, July 11
1. Soybeans, Grains Lower on Renewed Trade War Concerns
Soybeans and grains were lower in overnight trading, as the trade war between the U.S. and China escalated as the Trump administration said it would impose tariffs on another $200 billion worth of Chinese goods.
The tariffs, which would go into effect on August 14, are on top of the $34 billion worth of duties already in place on Chinese goods imposed on Friday. China retaliated, putting levies on an equal amount of U.S. goods including soybeans.
Investors are concerned that China will again retaliate against U.S. goods and that some of the tariffs will drive up costs for products purchased in the U.S.
Soybean futures for November delivery dropped 15¼¢ to $8.56¼ a bushel overnight on the Chicago Board of Trade. Soy meal lost $2.80 to $327.50 a short ton, and soy oil declined 0.5¢ to 28.92¢ a pound.
Corn future for December delivery fell 4¼¢ to $3.56½ a bushel overnight.
Wheat for September delivery fell 7¼¢ to $4.84¾ a bushel, while Kansas City futures declined 7¾¢ to $4.87 a bushel.
2. U.S. Says it Will Add Tariffs on Another $200 Billion Worth of Chinese Goods
The U.S. will add tariffs on another $200 billion worth of Chinese goods, the U.S. Trade Representative said in a statement, further escalating the trade war with the Asian nation.
The Trump administration on Friday began imposing 25% tariffs on $34 billion worth of Chinese imports, which are expected to eventually rise to cover $50 billion worth of goods. The products targeted benefit from China’s industrial and technology sectors, the USTR said.
China retaliated with an equal amount of tariffs on U.S. goods, while also threatening levies on another $16 billion worth of goods.
“As a result of China’s retaliation and failure to change its practices, the president has ordered USTR to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports,” the trade representative’s office said.
The USTR said China has pursued “abusive” trade practices with regard to intellectual property, which is the reason for the escalating duties. Over an eight-month time frame, it produced a 200-page report showing China’s industrial policy has resulted in theft and transfer of intellectual property and technology “to the detriment of our economy and the future of our workers and businesses.”
The items on which the new tariffs would encompass range from dog and cat food to car tires to toilet paper, according to a list released yesterday.
China said after the USTR’s announcement that it would retaliate against the U.S. for what it calls “typical bullying.” The Asian country said it would respond with “qualitative measures” without saying what those measures would be.
3. Heat Advisory Spreads North Into Nebraska, South Dakota, Iowa
A heat advisory that was confined mostly to eastern Kansas and western Missouri yesterday has spread north into parts of eastern Nebraska and South Dakota and western Minnesota and Iowa.
Temperatures in eastern Iowa today are expected to reach into the mid-90s with the heat index topping 105˚F., according to the National Weather Service.
In west-central Missouri, the heat index will be around 105˚F., the NWS said in a report early Wednesday morning. The advisory remains in effect until 8 p.m. Friday.
The good news for farmers is that ample rain has fallen in much of the area that will be hit by the heat wave.
As much as six times the normal amount of rain has fallen in much of eastern Nebraska and South Dakota and western Minnesota and Iowa, according to the NWS. Eastern Kansas and pretty much all of Missouri, however, have been dry, and crops are likely suffering.