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August 14, 2019 | FBN Insights | Kevin McNew

Trump Delays Additional 10% Tariff on Some Goods

Renewed trade discussions helped support soybeans on Tuesday

Trump Delays Additional 10% Tariff on Some Goods

Some Chinese goods will still face tariffs on September 1, but the delay on a few selected items (cellphones, laptops) affects about half of the $300 billion target list.

While soybeans were not mentioned in news items, the renewed trade discussions helped support soybeans on Tuesday.

Plans for additional phone calls between USTR and China’s Ministry of Commerce are expected within the next two weeks and the early September meeting is still scheduled.

What It Means for the U.S. Farmer: At FBN, we believe that both parties will continue to hold trade discussions and that China will make modest purchases of US agriculture products to maintain partial relations.  However, this trade war is expected to continue into 2019/20 and US soybean exports to China are forecast to remain weak relative to recent years.

 

Argentine Peso Weakens Sharply Making Exports More Competitive

Fueled by a vote on Sunday, the Argentine peso weakened sharply this week.

Voters rejected current president Macri’s austere economic policies Sunday.

This ignited questions about whether Macri will secure the re-election in October.

Argentine farmers may not sell aggressively immediately on the chance that additional weakness in the peso could be forthcoming.

A weaker peso against the U.S. dollar benefits producers who pay for production costs in pesos but receive U.S. dollars for exports.                   

What It Means for the U.S. Farmer: At FBN, we believe this will be another negative element for the U.S. export program for corn and soybeans.  Argentine producers, who sell corn and soybeans in U.S. dollars, now will be getting more pesos per bushel than previously, encouraging producers to let go of the crop.  This is overall a negative input for price implications for the U.S. producer.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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