Grain and hog markets ended lower Thursday, with cattle higher.
Darren Frye, Water Street Solutions, says corn, wheat and hogs traded sharply lower as these markets reacted negatively to the news the 25% tariffs will be imposed on Canada and Mexico on March 4.
Corn and wheat futures felt the pressure as concern about retaliation from either country could hurt exports, especially as Mexico is a top customer for both crops.
The Trump administration also said Thursday morning 10% tariffs on China would be doubled.
This reversed news the previous day that tariffs would be delayed until April 2.
However, those markets saw more liquidation ahead of first notice day in the March contracts and end of month by speculative traders as well as farmers.
USDA’s Ag Outlook Forum also increased corn acreage by 3.4 million acres over last season and pushed ending stocks to 1.965 billion bu.
While not a big surprise, it was negative for corn.
Wheat acreage was increased nearly 1 million acres with carryover raised 32 million bu. from this marketing year.
Soybeans closed down only a couple of cents with USDA lowering acreage projections by 3.1 million and ending stocks by 60 million bu.
Frye says farmers need to remember these estimates are based on models and are not survey based.
Live and feeder cattle futures ended higher as 25% tariffs would limit Mexican feeder cattle imports, which have only been trickling in after the new protocols regarding New World Screwworm.
Boxed beef was slightly supportive as it was higher at noon with Choice up $.30.
However, there was some light cash trade on Thursday at lower money, with $313 in Nebraska, $2 lower than last week’s weighted average and some $198 live in Iowa.
Meanwhile, lean hogs saw $3 to $4 losses in the futures as Mexican retaliation to tariffs could include U.S. pork and Mexico is the top customers for U.S. exports.
It is also end of the month and funds are extremely long in the hog market and so there could have been some chart based selling and long liquidation as well.
