Posted on:
April 4, 2025

Markets are trading sharply lower across the board again this morning with today’s losses sparked by China’s announcement that they would slap retaliatory tariffs of 34% on all U.S. goods starting April 10. Unsurprisingly, beans are the hardest hit ag market while crude is down $5.50 and equity markets are down 3-4% depending on the index.

Managed funds on Wednesday were estimated as net buyers of 1k corn to push the net long back out to 71k, net sellers of 15k beans to push the net short out to 38k, and net sellers of 1k wheat to push the net short out to 92k.

French wheat ratings were up 2% on the week to 76% and up from 65% a year ago when they experienced a crop failure.

France organized a meeting on Thursday with 10 EU countries to discuss a trade deal with the Latin American Mercosur bloc, which would likely open the door to increased grain imports from Brazil etal to EU countries. An EU representative called it a “massive opportunity” for the EU considering uncertainties triggered by Trump’s latest round of tariffs.

South Africa said they had no plans to retaliate against the U.S. and said they would seek to negotiate exemptions and quota agreements.

The UN FAO said their food price index in March was up .3 to 127.1 with higher veg oil prices partially offset by lower grain and sugar prices.

Corn posted a bullish outside up day on Thursday with prices reversing early losses to finish the day with the market able to recover to the middle of the recent range.  The market is approaching yesterday’s low this morning. Directional and overbought/sold indicators are neutral with potential for a large move from this price area. May support is 4.42 and resistance 4.68.

Beans posted a lower low, lower high, and sharply lower close on Thursday with the market seeing follow-through this morning to hit the lowest levels since December.  Directional indicators are neutral and there is room to trade lower before the market will be oversold. May support is now at 9.80 and 9.60 with resistance at 10.00.

Corn had an impressive day on Thursday with prices shaking off early tariff-related weakness to finish with gains. We will see if the market can put in a similar performance today as China’s retaliatory tariff announcement has corn lower this morning. U.S. and global old crop corn supplies are tight, but the global economy is likely to slow. With new crop balance sheets comfortable, producers should make sure sales are caught up and establish floors on new crop bushels in this uncertain environment.

Beans flushed to the downside overnight in response to China’s announcement. The global supply outlook was already bearish with South America’s record crop starting to flow into the market, and while trade flows will adjust in response to China’s retaliatory tariffs, it is still not good to have the number 1 importer of global beans increasing the price of U.S. beans by 34%. Producers should buy puts to protect old crop bushels as the market is technically breaking out to the downside this morning.

 

Corn down 4-6

Beans down 21-26