Ag and outside markets were all lower on Friday, except corn.
Garrett Toay, AgTraderTalk, says soybeans, livestock and outside markets all had a negative response to China imposing retaliatory tariffs on U.S. imports of an additional 34%.
Soybeans ended $.33 to $.34 cents lower as China is the largest export customer for U.S. soybeans.
Although China is essentially done buying soybeans from the U.S. for this marketing year and has switched its focus to South American supplies, the possibility of another trade war shook the market.
Toay says there are also concerns about cancellations as China and unknown account for around 2.6 MMT of soybean sales that have not yet been shipped.
Corn held up the best on Friday and closed higher for the week in part because China has not been buying U.S. corn.
Plus, Toay says it is a commodity that is USMCA compliant.
So Mexico, which is the top corn export customer for the U.S., is not subject to the reciprocal tariffs announced for other countries this week.
Toay says President Trump also tweeted that he had a productive call with the Vietnam and they wanted to lower their tariffs on the U.S. to zero.
That was followed by trade talk Vietnam was going to make a large purchase of U.S. corn which boosted the old crop corn contracts.
Toay says he was impressed with the resilience of the corn market this week considering USDA printed a 95.3 million acre planting figure on Monday.
He attributes the strength to the strong demand for corn and the need for at least 94 million acres of corn to be planted this spring.
With the flooding in the mid-South, Toay says the corn market is adding some weather premium with fear those acres may not get replanted.
Cattle futures imploded on Friday with deferred live and feeder cattle futures locked limit down and Toay says they will see expanded limits on Monday.
Lean hog futures also saw triple digit losses.
China tariffs were part of the equation but the larger play was the melt down in the stock market on Thursday and Friday.
Toay says that’s causing increasing talk of global recession and lower demand for goods including protein.
He thinks it will take some time for many of the markets to bottom and it will be dependent on how fast countries can strike trade deals with the U.S. to alleviate the tariffs.
