GRAIN CALLS
Corn: 7 to 9 cents lower.
Soybeans: 13 to 15 cents lower.
Wheat: Winter wheat 8 to 10 cents lower; HRS 5 to 7 cents lower.
GENERAL COMMENTS: Corn, soybeans and wheat each faced follow-through pressure overnight in reaction to the start of trade wars with key trading partners. Liquidation pressure in the stock market and crude oil futures lent no support overnight. The U.S. dollar index is making new lows as well, currently around 700 points lower.
USDA reported daily sales of 130,000 MT of white wheat for delivery to South Korea and 20,000 MT of soybean oil for delivery to unknown destinations — each during the 2024-25 marketing year.
President Donald Trump’s new tariffs on imports from Canada, Mexico and China went into effect at 12:01 a.m. ET, marking a significant escalation in global trade tensions (read our special report here). U.S. tariffs include a 25% duty on imports from Mexico and Canada (10% for Canadian energy products) and a doubling on Chinese imports to 20%. With this increase, U.S. trade-weighted tariffs on Chinese imports are nearing 38%, comparable to a repeal of Permanent Normal Trade Relations. The only difference on tariffs from the prior notification is that the de minimis exemption is available until the Commerce Secretary says there is a system in place to collect tariffs on those shipments. As we reported in “Evening Report” on Monday, Trump said the U.S. would impose duties on foreign agricultural products starting April 2.
China is imposing new tariffs on U.S. agricultural products and expanding the Unreliable Entities List to include 10 new companies. Effective on March 10, the following Chinese tariffs will be implemented: An additional 15% tariff will be imposed on U.S. chicken, wheat, corn and cotton. An additional 10% tariff will be imposed on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products. Canada announced immediate 25% tariffs on over $20 billion in U.S. imports, with additional tariffs on $86 billion worth of U.S. goods to be implemented in three weeks. Mexican President Claudia Sheinbaum said her country has a “Plan A, Plan B, Plan C, and even Plan D” in place, without offering much detail about the contingency plans. Sheinbaum is expected to address the issue today.
China’s customs authority suspended the soybean import qualifications from three U.S exporters and halted the imports of U.S. lumber, effective immediately. The three U.S. companies affected are CHS Inc, Louis Dreyfus Company Grains Merchandising LLC and EGT. CHINA’s customs says it detected ergot and seed treatment agent-treated soybeans in imported U.S. soybeans and pests in U.S. log shipments.
CORN: May corn futures saw sharp selling overnight. Support stands at $4.43 3/4 then $4.39 on continued selling. Bulls are eyeing initial resistance at the psychological $4.50 mark, which is reinforced by resistance at $4.55 1/2.
SOYBEANS: May soybean futures saw continued selling overnight. Prices challenged psychological $10.00 support, which is reinforced by $9.95 support on continued weakness. Resistance stands at $10.08 3/4 then $10.16 on a bounce.
WHEAT: May SRW futures continue to face sustained selling pressure. Prices are likely to challenge the contract low of $5.37 3/4, which is reinforced by support at $5.30. Resistance stands at $5.50 on a corrective bounce.
LIVESTOCK CALLS
CATTLE: Choppy/lower.
HOGS: Choppy/lower.
CATTLE: Live cattle futures and feeders are expected to open with a mostly weaker tone on continued liquidation selling pressure, though steep discounts to the cash market could limit losses after the open. April futures saw sharp selling yesterday though closed well off session lows. Last week’s cash cattle average fell another $1.99 to $197.65 and given overall market uncertainty amidst the tariff situation, another week of weakness seems likely. Wholesale beef strengthened Monday, as Choice cutout firmed $2.10 to $313.93 while Select rose 36 cents to $302.41.
HOGS: Lean hog futures are expected to open lower on continued liquidation selling pressure, though discounts to the cash index could limit losses after the open. Recent strength in the CME lean hog index has done little to stifle selling pressure as Trump has followed through on tariffs with Mexico, Canada and China – three of the top five importers of U.S. pork. The CME lean hog index is up 50 cents to $89.94 as of Feb. 28, marking four days of gains and four days of losses over the last eight days. Pork cutout climbed $1.37 to $99.79 Monday, posting gains in all cuts except ribs, and is near recent highs.