3 Big Things Today, September 18

Soybeans Hit 10-Year Low; Trump Imposes Tariffs on Additional $200B in Chinese Goods.

1. Soybeans Hit 10-Year Low on China Tariffs, Record Crop

Soybean futures hit a 10-year low in overnight trading, as the trade war between the U.S. and China escalated and on expectations for a record U.S. crop.

President Trump on Monday evening announced tariffs on another $200 billion worth of Chinese goods in addition to the duties on $50 billion in items it already imposed.

China, which already has levies on $50 billion worth of U.S. goods, said it has “no choice” but to retaliate, though it hasn’t said how it will respond since it doesn’t import that much from the U.S.

The USDA last week said it now expects domestic output of soybeans at 4.693 billion bushels on yields of 52.8 bushels an acre, both records.

If realized, this year’s crop would be the third consecutive year of record production following last year’s 4.392 billion bushels and 2016’s 4.296 billion, according to government data.

Soybean futures for November delivery fell 3½¢ to $8.20 a bushel overnight on the Chicago Board of Trade. Soy meal lost $1 to $304.70 a short ton, and soy oil declined 0.22¢ to 27.48¢ a pound.

Corn fell 1¢ to $3.47½ a bushel overnight.

Wheat for December delivery rose 3¾¢ to $5.10 a bushel overnight, while Kansas City futures added 2½¢ to $5.15¼ a bushel.

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2. Trump Administration Imposes New Tariffs on $200 Billion of Chinese Goods

The U.S. announced new tariffs on $200 billion worth of goods from China on Monday evening, a blow to negotiations between the countries that had been ongoing for the past week.

President Trump said in a statement yesterday that following seven weeks of public hearings and comment, he instructed the U.S. Trade Representative to proceed with the additional tariffs, which will take effect on September 24. The U.S. already has levies on $50 billion worth of Chinese imports.

The new duties will be at a 10% level, below the originally planned 25%, until the end of the year. Starting January 1, they’ll go up to 25%, Trump said.

“Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports,” he said.

China, as expected, said it would retaliate, though it didn’t say what steps it plans to take. China imports less than $200 billion worth of goods from the U.S. It, too, has tariffs on $50 billion worth of U.S. goods, and has said it will tax another $60 billion worth of items.

The Asian nation also has been devaluing its currency to make its wares more attractive on the global market.

U.S. and Chinese negotiators have been talking since last week when overtures between the two countries indicated that they both wanted to come to an agreement. China has said it may end the talks in light of the new tariffs imposed by Washington.

“In order to safeguard legitimate rights and interests and the global free trade order, China will have to retaliate,” China’s Ministry of Commerce said in a statement after the new duties were announced.  

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3. Temperatures Expected to Be Hotter Than Normal, Rainfall Forecast in Kansas, Iowa

It’s going to be “unseasonably” hot and humid in parts of central Kansas today, according to the National Weather Service.

Temperatures are expected to reach into the low 90s with the heat index into the mid 90s, the NWS said in a report early Tuesday morning. Following the heat will be a round of thunderstorms, some of which may be severe with strong winds and hail being the primary risks, the agency said.

Rain is also possible in parts of eastern Iowa and western Illinois where the harvest is just getting under way. There’s a “marginal” risk of severe storms that would include hail and strong winds. Temperatures are expected to be in the 90s today.

The chance of thunderstorms continues through Friday, with several rounds of potentially heavy rainfall being the biggest threat, the NWS said.

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