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3 Big Things Today, March 23

Soybeans Drop in Overnight Trading; Ag Groups Come Out Against China Trade War.

1. Soybeans Plunge Overnight on Worries of Chinese Tariff Retaliation

Soybean futures tanked overnight after China released a list of 128 items on which it may impose tariffs in a retaliatory move against the Trump administration for its own levies against imports of steel and aluminum.

U.S. pork, wine, and fruit were on the list, but soybeans were not – yet. Pundits and industry group officials are concerned that China will expand the list after President Trump yesterday announced more tariffs on Chinese goods valued between $50 billion and $60 billion.

He also ordered the U.S. Treasury Department to look into Chinese investments into U.S. companies, an indication there will be some restrictions imposed in the future.

John Heisdorffer, the president of the American Soybean Association, told CNBC that any tariffs against soybeans would be “a big impact” since China is the biggest buyer of U.S. beans.

Soybean futures for May delivery dropped 17½¢ to $10.12¼ a bushel overnight on the Chicago Board of Trade. Soymeal lost $7.40 to $360.60 a short ton, and soy oil was down 0.27¢ to 31.61¢ a pound.

Corn futures for May delivery fell 5¾¢ to $3.70¼ a bushel in Chicago.

Wheat for May delivery dropped 8¼¢ to $4.47½ a bushel overnight, while Kansas City futures declined 5½¢ to $4.65½ a bushel.


2. National Pork Producers, American Soybean Association Rail Against Trade War

The National Pork Producers Council and American Soybean Association both came out with statements concerning proposed and potential retaliation by China over tariffs imposed by Washington, as the groups are concerned American agriculture will bear the brunt.

Pork was on the list of more than 120 items from which China will choose to impose its own tariffs in response to Trump administration levies against steel and aluminum imports.

The president yesterday said the U.S. would impose tariffs on $50 billion to $60 billion worth of items from the Asian country and instructed the Treasury Department to begin looking at potentially restricting Chinese investments into U.S. companies.

The U.S. exported $1.1 billion of pork to China last year, making the Asian country the No. 3 value market for the meat.

“We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy,” NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio, said in a statement. “No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers.”

Iowa State Economist Dermot Hayes said lost sales would have “severe” economic consequences for U.S. farmers.  

The American Soybean Association said it’s concerned that Beijing will impose tariffs on the $14 billion worth of the oilseeds it ships to China. If that happens, prices that have recently risen would likely fall back to lower levels.

“Multiple reports indicate the Chinese have U.S. soybeans squarely in its sights for retaliation, and this decision places soybean farmers across the country in financial danger," said ASA President John Heisdorffer, who’s also a producer from Iowa. “There is a real struggle in agriculture to keep everything going right now. It’s extremely frustrating to have the administration taking aim at our largest trading partner.”

In other news, the USDA delayed release of its weekly Export Sales Report due to adverse weather in Washington. The report is scheduled to be released today with analysts expecting corn sales from 1.4 million to 2.1 million metric tons, soybean sales from 700,000 to 1.4 million tons, and wheat sales from 100,000 to 300,000 tons, according to Allendale.


3. Large Storm Expected to Dump Several Inches of Snow From North Dakota to Southern Ohio

An extremely large storm encompassing almost the entirety of North Dakota and stretching through southern Minnesota, northern Iowa, Illinois, central Indiana, and southern Ohio will dump snow and rain on the region, according to the National Weather Service.

In North Dakota, up to 10 inches of snow are expected today with a glaze of ice with freezing drizzle possible tonight, the NWS said in a report early Friday morning. Winds will gust up to 40 mph, causing blowing snow and near white-out conditions.

In parts of northern Iowa and Illinois, the precipitation will transition from rain to snow, and forecasts are calling for 6 to 10 inches with some areas getting as much as 15 inches of snow. Travel isn’t advised, as wind gusts will be as strong as 35 mph, the agency said.

Meanwhile in the Southern Plains, a red-flag warning is now in effect for all of southwestern Kansas, the western half of Oklahoma, much of West Texas, and two thirds of New Mexico due to extremely low humidity combined with strong winds.

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