Chicago | Reuters—Chicago wheat and soybean prices came under pressure on Monday after U.S. President Donald Trump said he will impose punitive tariffs on aluminum and steel imports, raising concern over potential retaliation against U.S. grain and oilseed exports, analysts said.
The new tariffs would mark another escalation of his shakeup of trade policy and mounting risks of a multi-front trade war.
“It rekindled fears that retaliatory tariffs could be coming for U.S. agricultural products,” said Randy Place, an analyst at Hightower Report. “The more tariffs he puts on, the harsher response we’re likely to get.”
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Corn futures largely shook off tariff fears as market players turned their focus to Tuesday’s U.S. Department of Agriculture supply and demand report, in which the agency is expected to report tighter U.S. corn ending stocks.
The Chicago Board of Trade’s most active wheat contract Wv1 settled down 3-1/4 cents to $5.79-1/2 a bushel. Corn Cv1 settled up 4 cents to $4.91-1/2 a bushel and soybeans Sv1 settled flat at $10.49-1/2 per bushel.
Corn futures also received a boost from signs of strong demand, including a hefty sale of corn to Mexico and export inspections of corn that came in on the high end of trade expectations.
In South America, improving weather in dry growing areas of Argentina, the top exporter of soymeal and soyoil, and a larger-than-expected soybean harvest in leading supplier Brazil pressured soy prices.
Showers forecast in Argentina this week may offer relief for corn and soy crops struggling with dry conditions.
Tariff worries and expectations that Tuesday’s USDA report will show substantial wheat ending stocks pressured wheat prices, along with diminished fears of freeze damage to Black Sea and U.S. wheat crops.
A cold front is headed into key wheat-growing regions in the Black Sea and the U.S. Plains, but snow cover expected in the area has reduced the risks of winterkill.
—Additional reporting by Michael Hogan in Hamburg and Ella Cao and Mei Mei Chu in Beijing.
