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4/3/2025

Liberation Day Hangover:  Grain markets sharply lower amid fear of looming global trade war.

• President Donald Trump's move to impose sweeping tariffs on U.S. imports on allies and rivals alike sparked threats of retaliation on Thursday, intensifying a global trade war that threatens to stoke inflation and raising fears of recession.  The penalties announced on Wednesday unleashed turbulence across world markets and drew condemnation from other leaders facing the end of an era of trade liberalization that has shaped the global order for decades. Trump said he would impose a 10% baseline tariff on all imports to the United States and higher duties on some of the country's biggest trading partners. According to Fitch Ratings, the effective U.S. import tax rate has shot up to 22% under Trump from just 2.5% in 2024, reaching levels last seen around 1910.

• Oil prices fell by over 3% on Thursday after U.S. President Donald Trump announced sweeping new tariffs which investors worry will enflame a global trade war that will curtail economic growth and limit fuel demand. Trump on Wednesday unveiled a 10% minimum tariff on most goods imported to the United States, the world's biggest oil consumer, with much higher duties on products from dozens of countries, initiating a global trade war that threatens to drive up inflation and stall U.S. and worldwide economic growth. "The U.S. tariff announcement clearly caught markets off guard. Pre-announcement speculation suggested a flat 15-20% tariff, but the final decision was more hawkish," Yeap Jun Rong, market strategist at IG, said in an email.

• Soybean seed piracy in Brazil generates losses of 10 billion reais ($1.76 billion) per year in the country, according to a study by CropLife Brasil and agribusiness consultancy Celeres Consultoria released on Wednesday. The findings of the study in Brazil, the world's largest producer and exporter of soybeans, underscore the challenges faced by seed, chemical and biotechnology companies doing business here. The country, which competes with the United States and Argentina in world markets, sells most of its soybeans for processing in China. Pirated soybean seeds occupy 11% of the area sowed with soybeans in Brazil, the study found after looking at planting data for the 2023/24 season. At that point, the total area planted with soy was 46.15 million hectares (114.039 million acres), data from national crop agency Conab shows.

• March weather conditions were largely favorable for both winter and spring grains, most of which are in good condition, analyst APK-Inform quoted state agricultural meteorologists as saying on Thursday. Ukrainian farmers have started mass sowing of spring crops and the future harvest depends to a significant extent on the plants having enough moisture for germination and further growth. Meteorologists said in a report that weather conditions "were generally satisfactory for regrowth and rooting of winter crops, their further vegetation, as well as for initial growth of early spring cereals". They also said that weather conditions were favourable for spring field work and in most areas the topsoil was mostly well moistened.

• Overnight trade in response to the tariffs has soybeans down 3 times as much as corn, suggesting foreign end-users may have fewer options for sourcing corn. South America is coming off a record soybean crop with an estimated 550 mbu increase providing consumers with ample supplies. The smaller Ukraine corn crop and the fact Brazil’s export program won’t get underway until mid-August means foreign users will be looking at 6 MMT/240 mbu less availability from non-U.S. shipppers.

CORN:

• Estimates for USDA Export Sales report at 7:30 am CDT; corn, 31-63 mbu for 24/25; 0-4 for 25/26
• Ethanol grind: 1,063,000 bpd for week ending March 28, up 0.9% vs. last week but dn 0.9% compared to last year. Stocks were 26.612 mb, dn 0.738 mb from the prior week and notably below the average trade estimate of a 0.123 decrease
• Possibility that the Brazilian corn export program is winding down; only 2 mbu scheduled for export vs. 5 mbu LW and 1 mbu LY
• The Nov 2025 bean/Dec 2025 corn futures price ratio was 2.31 as of Wednesday; Last year, the SX24/CZ24 corn ratio was 2.51
• The Funds sold 6 K ahead of the Administration’s tariff announcements

SOYBEANS:

• Trade estimates for USDA Export Sales report (week ending March 27)
  
  • Beans: 9-29 for 24/25 and 0-2 for 25/26
  • Meal: 100-300 for 24/25 and na for 25/26
  • Oil: 5-40 for 24/25 and na for 25/26
• Although Brazil’s soybean export lineup was down 7 mbu this week to 435 mbu, it is still 50 million above the year-ago level
• ANEC increased its March Brazil soybean export forecast from 15.6 to 16.5
• U.S. planting progress:
  
  • LA, 6% this week; 0% last week; 8% last year; 4% for 5-year avg.
  • MS: 1/0/1/1
  • AR: 5/0/1/1
  • MO: 2/0/0/0
• The Funds sold 2 SB, 6 SM, bot 6 BO. May Crush, +$.05 @ $1.36

MACRO:

• President Trump's tariff announcement increasing the risk of a global trade war. Global markets under pressure.
• Wall Street Futures - Weaker:  Dow, -1167; S&P, -196; NAS, -765
• Asia - Mixed:  Nikkei, -2.77%; Shanghai, +0.24%; Hang Seng, -1.52%
• EUROPE - Mixed:  DAX, UNC; FTSE, -1.34%; CAC +2.31%
• June Gold: -$41 @$3,125     May CRUDE: -$3.40 @$68.31     Jun U.S. Dollar Index: -2.091 @103.491