World markets plummet on a more comprehensive tariff package.

World markets are sharply lower this morning after President Trump introduced a more comprehensive tariff package than initially planned. The 54% US tariff on China was a surprise and is expected to provoke retaliation. China is the US's third-largest importer of agricultural products, behind Mexico and Canada.

The Trump administration did not impose any additional tariffs on Canada and Mexico, as the USMCA directs the North American Ag trade. This will be supportive of corn and wheat after today’s initial chaos works through. This has resulted in a loss of 1020 points for the Dow Jones this morning, with the S&P off 200 points and the NASDAQ also sharply lower. Crude oil has tumbled almost $5 a barrel as contracting world economies lose out on easy sales to the US.

Grain futures are all lower as the trade throws out the baby with the bathwater effect. With Canada and Mexico spared the tariffs, Mexico will likely purchase the remaining 200 million bushels they are anticipated to buy yet, along with an additional 500 million bushels left to ship, which are now expected to arrive in late summer. The question now remains whether Japan and South Korea will retaliate with new taxes on food imports, which will be closely watched.

On the weather front, Brazil’s monsoonal rainfall is eroding, especially after mid-April. This must be monitored, as Safina corn planting had only recently been completed in Paraná and Mato Grosso do Sul.

A pattern of near-complete dryness will be established from April 7 to 18, with abnormal warmth resuming across the plains. This warmth will spread eastward beginning April 14, which will be welcomed for the principal corn belt after recent heavy rains.

Cattle futures closed sharply higher yesterday, with June and August live cattle setting new contract highs. The market is anticipating a lower opening today as the cattle industry cannot escape recessionary talk despite extremely tight numbers. Meanwhile, the negotiated Fed cattle trade has not taken place, except for some late sales quoted in Texas at $210, which was steady with last week. Most asking prices are currently at $numerate 212.

Cattle slaughter at midweek is 351,000 head, down 15,000 from last week and 2,000 head fewer than a year ago. Yesterday, boxed beef values corrected some of Tuesday's sharp gains, with the choice off $2.32 and select losing $3.24.The cattle trade could be in for some heavy technical selling, as index funds recently loaded up on new purchases may be quick to exit, as fears of a recession could prompt the market to focus on the consumer now rather than the tight numbers.