Grain and livestock markets are sharply lower with the outside markets also tanking.
Kent Beadle, DTN market analyst, says grain and livestock futures are all reacting to the announced Liberation Day tariffs from President Trump on Wednesday.
They include 10% tariffs on all countries with additional tariffs on a long list of other trading partners the U.S. currently holds had trade deficits with.
Beadle says areas of concern for the ag markets include the tariffs on Vietnam, South Korea, Taiwan and Japan, which are all large ag export customers for U.S. products.
Beadle says the key will be counter measures but the markets are seeing risk off selling with the uncertainty of retaliatory measures by many trading partners.
Mexico and Canada will still see the 25% tariffs implemented earlier but USMCA compliant products will be excluded, which is good news and includes products like corn, wheat and pork.
Cattle futures are also reversing after new contract highs in live cattle on Wednesday.
For the cattle market restrictions on beef imports from countries like Australia is a net positive but the market is trading lower due to the plunge in the stock market and the fear of global recession.
Lean hog futures are also lower as China faces tariffs of upwards of 57% and may retaliate against the U.S. with tariffs on pork and they are one of the largest customers behind Mexico.
The good news is that pork will be exempt from tariffs from Mexico due to the USMCA.
How long will it take the markets to absorb the news?
Beadle says its hard to say but there should be good end user value at lower prices and the silver lining is the dollar is sharply lower which is also friendly and offsets some of the sting of the tariffs.
