Beans China Trade War

This morning I got to the studio about 4:20 and got my computer turned on. The first thing I do is see what corn and soybeans are trading at in the overnight session. I was stunned when I saw corn was 14 to 15 cents lower and beans were down 40 to 44 cents a bushel. There is no market commentary available at that time and you cannot call Gordy or anyone else either. The first thing I though of was trade war with China and that there was some announcement that China was going to put a tariff or tax on U.S. Soybeans. I also wondered if there was a melt down in the stock market.

In the national news at 5:00 am I heard both hunches were correct. China had announced a possible 25 percent tax on soybeans imported from the U.S and the financial markets were melting down too. I really did not think China would propose a tariff on our beans. It would hurt their economy and people as much or maybe more than ours. It would seem the only ones affected would be U.S. soybean farmers and pork producers. China has proposed a 25 percent tariff on imported pork too.

By the close today corn was only down about 7 cents and beans around 22 cents. So, both corn and beans recovered more than half of the knee jerk reaction. The stock market saw a nice recovery too. When you analyze the announcement from China it was very vague. A 25 percent tariff was possible but there were no details on when it would be put in affect. In fact China wanted to talks to begin to work out the trade dispute.

I guess this is how the game is played with blustering on both sides. You have to hope that the dispute can be worked out. In the interim farmers will be caught in the crossfire. It seems we are little pawns in a very big game. Plus, we have been here before. Does anyone remember President Nixon stopping soybean exports because of tight supplies in the United States. How about President Carter's Russian Grain embargo?