Corn and soybeans are lower early Thursday, with wheat trying to hold gains. Cattle are higher, hogs lower and the financial markets are still up but off highs.
Darin Newsom, Barchart, says the financial markets have reacted positively to the International Trade Commission’s court ruling against the Trump tariffs, declaring them unlawful. The administration has already said they would appeal.
“This is no surprise. We knew the tariffs were illegal, especially since Congress never approved them,” he says.
However, the ag markets are disregarding the news as Newsom says even if the appeals court rules against the tariffs its very likely the President will ignore it and use tariffs anyway.
“The question is now, does it matter? Because as we’ve seen, you know, what is legal and what is illegal doesn’t necessarily concern the U.S. administration all that much,” he adds.
The corn and soybean markets are lower this morning with July corn making new lows for the move again as improving weather forecasts are weighing on the row crop sector and causing additional fund selling.
Newsom says the market is comfortable there are ample supplies to allow end users to wait for the new crop to be harvested.
The corn market did see flash export sales this morning including 4.1 million bu. to Mexico and 4.0 million bu. to unknown destinations, both for 2024-25.
This is curious considering the bear spreads were prominent in the corn market Wednesday and indicated there may actually be some export cancellations and that was rumored in the market.
However, the other possible explanation is Brazil’s second crop corn estimates have continued to grow and their record crop is already pressuring the market even before the harvest gets into full swing.
Wheat is trying to hold gains on short covering by the funds as we’re getting into the end of the month and Newsom thinks there are traders trying to take profits.
However, Newsom says the market is susceptible to retesting the contract lows hit a couple of weeks ago as the harvest is starting to ramp up.
Texas has already harvested 17% of the crop which is in line with the 18% average and the market perception is that the crop is bigger than last year, even if there are some lurking disease issues.
