Trump Trade Tweets Attempt To Drown The Weather Market

May 6, 2019 12:04 PM
 
 

Over the weekend, President Trump threatened to increase tariffs on Chinese goods from 10% to 25%. As you might expect, markets dove lower on the news, but one analyst says we’re just one more week of delayed planting away from a bullish weather market. 

“[Trump] just pretty much put himself in a box to where if there is no deal by Friday, he's gotta follow through with this,” Bill Biedermann of AgMarket.net told AgDay host Clinton Griffiths on Monday. “And he puts President Xi in a corner where if they agree to anything, it's going to look like he was bullied. And that's of course an image that he does not want to portray.”

Soybean markets were down a full quarter Monday morning. Most of the downward pressure is due to uncertainty. The scenario farmers thought would be their worst nightmare is becoming reality.  

“This is the worst-case scenario we talked about a year ago,” Biedermann said. “If the Trump talks failed, the implications for agriculture are devastating.” 

It's actually more likely now that that Trump kicks the deal off the table completely, than it is to get a deal done, Beiderman said. “So at this point, we have to trade that, which leaves us with weather.”

And the weather market is shaping up to be very bullish corn, he added.  

Right now with 92.8 million acres planted and a projected 177 bu. average yield, total production will be 2.2 billion bushels, he explained. If farmers are unable to plant 1.5 million acres, that’s only 91 million acres planted. In 1993, a year remembered for severely delayed planting, farmers took 4 million acres out of corn production, you’d be down approximately 2 billion bushels. 

“And this is much bigger than 93,” he explained. “If you take it take 177 yield down to the U of I’s 170 yield, you're down to 1.3 or 4 billion bushels. If you take that to 165, you know, you're below a billion. I think things can really change quickly on this corn market.”

Watch AgDay TV Tuesday morning for a more analysis on the China trade situation.

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Comments

 
Spell Check

samuel owings
chestertown, MD
5/7/2019 08:35 AM
 

  Many negative comments about our POTUS, good trade deals can take time lets give him some of that before judging. Then maybe consider the fact that farmers have the bad habit of over producing!!!!! Maybe cut some inputs (lower production cost), reduce acres planted, and then maybe we will get more for our crops!!!! genius. Lets share the blame game!

 
 
Chuck
Denmark, WI
5/7/2019 08:58 AM
 

  Riddle me this.. Up until 2016 most farmers considered companies like Monsanto/Bayer the enemy. High prices for their traited seed and can't reuse the harvested seed to plant next year. Along comes 2016 and China is doing just that, saying screw you to Monsanto. But now New York City President labels it stealing US "intellectual property". So New York City slaps tariffs on China to protect companies like Monsanto and their high price, ineffective "intellectual property" seed. China responds by slapping tariffs on US farms good. So, not only has New York city not helped US farmers against companies like Monsanto, but now the US farmer getting screwed all over again through tariffs/lower commodity prices, to protect Monsanto!!! Not to mention Monsanto had their corporate tax rate cut in half... How do you think New York City is paying for that... tariffs on US farmer.

 
 
PJ Jahn
Ptown, IL
5/7/2019 08:27 AM
 

  My self, and many others now can't help but to LOAO every time we hear these U.S. farmer/producers complain, and detest socialism! And all the while they very well know themselves to be the largest receivers of socialist benefits our country has ever seen! Simply amazing! Spinless cowards hiding from the truth, and lying to themselves!

 
 

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