Morning Highlights


Highlights

  • Trump said last night that he will impose a 5% tariff starting June 10th on all goods coming in from Mexico, until illegal migrants coming through Mexico and into our Country stop. He goes on to say the tariff will gradually increase until the illegal immigration problem is remedied at which time the tariffs will be removed. The tariffs are planned to increase systematically to 25% by October 1st.
  • Mexican President Andres Manuel Lopez Obrador responded calling Trump’s policy of America First a fallacy. He also said social problems are not resolved with taxes or coercive measures. No retaliation was threatened, adding he wanted to avoid confrontation. Mexico is the US’ largest trading partner.
  • The tariffs put into question the US, Mexico and Canada trade agreement that is now up for congressional approval.
  • Outside markets show the DJIA futures at 24,915 down 275, Dollar Index at 97.980 down .073, and crude oil at $55.32 down 1.27. The Mexican peso is down around 3%.
  • Shares of automobile companies were down hard on premarket trading. The 10-year Treasury yield dropped to the lowest it’s been in two years to 2.15%.

 Corn

  • Corn is lower overnight, pulling back from gains yesterday.
  • Mexico is the largest buyer of US corn, so raising tariffs on all goods coming in from Mexico raises concerns Mexico will equally retaliate but there hasn’t been any indication from Mexico that they will.
  • The Trump administration is expected to announce an end to the ban on higher ethanol blends during the summer, allowing blends containing up to 15% corn-based ethanol to be sold year-round.
  • Export sales were 983,000 MT with expectations between 450,000-850,000 MT.

 Outlook:  Lower on profit taking and surprising Mexico trade concerns.

 Oilseeds

  • Soybeans were lower overnight after closing on its highs yesterday.
  • President Trump’s proposed tariffs on goods coming into the US from Mexico is having a negative impact on prices this morning as this issue adds to the issues with China.
  • Soybean export sales were 478,000 MT with expectations between 250,000-650,000 MT, soymeal sales were 249,000 MT with expectations at 150,000-375,000 MT, soyoil sales were 35,000 MT with expectations between 8,000-22,000.
  • Chinese soybeans were 21.75 cents lower, settling at 3611 yuan per ton. Soymeal was 0.50 cents lower settling at 2921 and soyoil was 4 cents lower settling at 5498 yuan per ton.
  • Malaysian palm oil was 4 cents lower, settling at 4476 ringgits.

 Outlook: Lower on profit taking and trade concerns.

Wheat

  • Wheat futures were lower amid concerns on trade between Mexico and the US.
  • Wheat sales were 565,000 MT with expectations between 200,000-600,000 MT.
  • Argentina wheat planting has begun. Brazil will purchase a minimum of 5.5 MMT of wheat from Argentina. Concerns in Argentina were raised when Brazil had said earlier it would purchase 750,000 MT of wheat from the US.
  • FranceAgriMer maintained their wheat rating at 79% good to excellent as dry conditions continue to persist. Their wheat crop was impacted by dryness last year.

 Outlook: Lower on profit taking and weaker corn with Mexico trade concerns.