Trump Trade Tweets Send Grain Markets Diving to 42-Year Low
Comment of the Day

May 09 2019

Commentary by Eoin Treacy

Trump Trade Tweets Send Grain Markets Diving to 42-Year Low

This article by Michael Hirtzer and Shruti Date Singh for Bloomberg may be of interest to subscribers. Here is a section:

“The U.S.-China deal sentiment is being unwound,” Joe Davis, director of commodities at Futures International LLC, said in a message. “There’s a zero percent chance of a deal by tomorrow -- it was almost a 100 percent chance last week.”

Soybeans have become something of a poster child of the trade dispute. China, the world’s biggest consumer, has mostly shunned imports from farms in rural American communities that voted for Donald Trump in 2016. Meanwhile, supplies from the 2018 harvest piled up in silos, bins and bags across the U.S. Midwest.

On Thursday, July soy futures in Chicago fell as much as 2.5 percent to $8.065 a bushel, the lowest since the contract debuted in late 2015.

Eoin Treacy's view

China has been slow rolling or banning purchases of US grains has had a material effect on the price of these commodities and on the welfare of farmers dependent on selling them. With trade tensions still high these commodities came under renewed pressure today.

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