Corn and Soybeans GAP Lower on Trump Tariff Announcement

04/03/25 • 12 min

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0:00 Tariffs and Lower Markets
5:10 Historic Corn Belt Flooding
8:07 Ethanol Production
9:00 China Ship Sales Decline
10:43 Flash Sale
Trump's Trade War Escalates: New Tariffs Imposed 🌍💥
President Trump escalated the trade war on Wednesday, announcing a 10% tariff on all imports set to take effect on Saturday. Additionally, he introduced a reciprocal tariff policy targeting 180 nations, including the EU (20%), Vietnam (46%), Taiwan (32%), and a 34% tariff on China, bringing the total tariff rate on Chinese goods to 54%. These reciprocal tariffs will begin on April 9, with Canada and Mexico exempt, though imports not covered by the USMCA agreement will face a 25% tariff. Corn and soybean futures dropped sharply in response, while the US stock market fell to fresh lows overnight. 📉💰
Historic Flooding Forecast for the Corn Belt 🌧️🌊
Severe flooding is expected in the Corn Belt, with a storm system that started on Wednesday causing significant rainfall. Areas in Southeast Missouri, Southern Indiana, Southern Illinois, Kentucky, and Southern Ohio are at risk of receiving between 10 to 15 inches of rain, with more moderate amounts expected in other regions. Over 32 million people are under a flood watch, and the flooding is expected to impact agricultural production in these regions. 🌽🌾
US Ethanol Production Increases 📈🌱
US ethanol production increased by 1% last week, totaling 1.06 million barrels per day. Ethanol stocks decreased by 2.7% but are still 1% higher compared to the same time last year. Despite the recent dip, stock levels remain historically high. Ethanol production margins are currently near breakeven levels, according to Reuters data. 📊💡
Chinese Ship Sales Decline Amid Port Fee Threat 🚢❌
Chinese ship sales dropped sharply in March due to President Trump's threat to impose a $1 million port fee on Chinese vessels. This has raised concerns in the global shipping industry, particularly regarding the impact on US grain exports. The American Farm Bureau Federation estimates that the proposed shipping fees could increase soybean export costs by 9.5 to 27.5 cents per bushel. 🚢📉
Flash Sale of Soybean Cake and Meal 🛍️🌾
US exporters sold 135,000mt of soybean cake and meal to the Philippines for the 2024/2025 marketing year. This marks the first flash sale of soybean cake and meal for the year. 🌱

Previous Episode

Will Biofuel FINALLY Save the Soybean Market?? + Liberation Day Jitters

0:00 Soybeans and Biofuel Push
3:23 "Liberation Day"
5:04 Heavy US Rainfall
7:55 Farmer Sentiment Declines
9:54 StoneX Cuts Brazil Crop Estimates
Biofuel Groups Push for Higher Diesel Mandates ⚡💡
U.S. oil and biofuel groups, including the American Petroleum Institute, are pushing the EPA to increase federal biomass diesel blending mandates to 5.5–5.75 billion gallons, up from the current 3.35 billion gallons. The ethanol blending requirement is expected to stay at 15 billion gallons. However, smaller refiners and fuel retailers oppose the increase, warning of higher fuel costs and potential job losses. Additionally, some industry members are calling for the reinstatement of the blenders tax credit, arguing that the expired credit kept fuel prices lower for consumers. 🌱⛽
Trump's Reciprocal Tariffs Begin Today 📅⚖️
President Trump's reciprocal tariffs on all U.S. trading partners go into effect today. Although the specific details of the tariffs will be announced at 3 p.m. Central time, these tariffs are expected to impact U.S. agriculture, with Mexico, Canada, and China being the top buyers of U.S. agricultural products. Retaliatory tariffs could target nearly $27 billion worth of U.S. agricultural goods, potentially harming farmers. Meanwhile, Canada has reportedly decided to avoid counter-tariffs on most food imports from the U.S. 🥩🌾
Heavy Rains to Impact the Central U.S. 🌧️
Rainfall is expected to accumulate across the central U.S. Corn Belt, particularly in southern Illinois, western Kentucky, and parts of Tennessee, Arkansas, and Missouri. Some areas could see between 10 and 16 inches of rain over the next five days, which may impact planting schedules and soil conditions. 🌧️🌽
Farmer Sentiment Drops Amid Trade and Policy Uncertainty 🌾📉
U.S. farmer sentiment fell in March, according to Purdue University's CME Group Ag Economy Barometer. The index dropped to 140, a 12-point decrease from February. Falling crop prices and trade policy uncertainty, particularly regarding tariffs, contributed to the decline. A record number of farmers expect exports to decline in the next five years, and nearly two-thirds of respondents anticipate that a second round of Market Facilitation Program payments will be necessary to mitigate trade war impacts. 📉🌾
Brazil’s Soybean and Corn Crops Lowered 🌾📊
Brazil’s soybean crop estimate has been reduced to 167.4 million metric tons due to adverse weather in Rio Grande do Sul. Additionally, the forecasts for both the first and second corn crops have been lowered. Despite these cuts, Brazil's second corn crop is expected to receive normal rainfall over the next 14 days, and no weather issues are currently anticipated. 🌱🌽

Next Episode

China Retaliates, Grains Crash - 34% Tariffs on ALL Imports from US

0:00 China Retaliates
1:49 More Direct Payments are Coming
7:08 Stock Market Crash
11:11 Mexico Won't Retaliate
13:52 Severe Storms
17:48 Drought Monitor
20:06 Export Sales
Farm Aid Package: Potential for Direct Payments 💸🌾
The possibility of more direct financial aid for farmers affected by tariffs is still under consideration. Agriculture Secretary Brooke Rollins stated that the Trump administration will decide in the coming months whether to provide assistance to offset losses from the ongoing trade disputes. The previous trade war resulted in a $23 billion bailout for farmers, and this time, the aid package could be much larger due to tariffs on multiple countries. This discussion comes as $10 billion in ECAP funds are already being distributed. 🌽🌍
Stock Market Decline Amid Tariff Concerns 📉💥
The stock market plummeted on Thursday, with the S&P 500 hitting its largest single-day drop since 2020, falling nearly 5%. The Dow Jones and Nasdaq also faced sharp losses. Concerns over the impact of President Trump's new tariffs, coupled with fears of a potential recession, contributed to the decline. J.P. Morgan predicts that a recession could be likely if tariffs remain unchanged. 📉💰
Commodity Index Takes a Hit ⬇️📊
The Bloomberg Commodity Spot Index saw its biggest drop in over two years, falling by 2.5%. While oil and steel were excluded from Trump’s tariffs, commodity prices were still impacted by market fears of a global economic slowdown. In addition, OPEC+ announced plans to increase oil production, which caused a sharp decline in WTI crude prices, marking its steepest loss since July 2022. 🛢️📉
Mexico's Response to Tariffs 🇲🇽📦
Mexico has decided not to retaliate against U.S. tariffs but instead will introduce its own comprehensive tariff program. Mexico remains the largest importer of U.S. corn, and Trump’s 25% tariff will apply to certain imports not covered by the USMCA trade agreement. While Mexico avoids reciprocal tariffs, its agricultural sector may still be impacted by trade disruptions. 🌽⚖️
Severe Storms Cause Damage Across the US 🌪️💨
Severe storms, including tornadoes and heavy rainfall, caused extensive damage from Oklahoma to Indiana, with at least six fatalities reported. Major flooding is expected, especially along the Mississippi River and in parts of Kentucky and Tennessee. The storm system is forecast to continue through the weekend, with some areas receiving over a foot of rain. 🌧️🌪️
Drought Monitor Update 🌾💧
USDA’s weekly drought monitor reported improvements in drought conditions across parts of the Corn Belt, especially in northern areas like Wisconsin, Michigan, and southern Minnesota, following a winter storm. However, drought conditions persist in about 28% of the region, impacting areas crucial for corn, soybeans, and wheat production. 🌾💦