China implemented 34% tariffs on all US goods early this morning

This morning’s grain trade turned lower against world markets turned sharply lower in the early morning hours. At 5:00 a.m. CT, China announced retaliating tariffs of 34% on all goods imported from the US. This was China’s most aggressive retaliation against US rising tariffs to date and puts the US and China firmly in a trade war. China has not been buying corn or wheat, yet it was the break in soybeans that pulled the overall grain complex lower in the early morning hours. A test of will is at hand and expected by the Trump administration. The US economy is stronger than China's, making this a matter of timing as to when China wants to discuss a truce and agree to another phase deal, similar to the one they reached in 2020.

The stock market's break has seen the Dow down another 1,200 points overnight, increasing the risk of a flash recession to an uncomfortably high level, with imported goods inflation likely to follow. The monthly job report's release this morning was favorable, with a job gain of 228,000 compared to the 140,000 estimate. This helped the Dow Jones recover several hundred points late in the morning session.
As for commodities, China has not imported any wheat or corn in the last year, which is not expected. But China does import 800-850 Mil Bu of soybeans annually, so it will require some form of negotiating by August to get China back into the buying of soybeans in the US.

The Buenos Aires Grain Exchange maintain production estimate steady for corn and soybeans, with the corn harvest advancing only 1%, now at 20% complete. Last week’s rain slowed the harvest but likely benefited late-seeded crops. They will likely not make any further cuts to their crops due to the excessive heat and dryness that occurred during February.

With April 10 being the date when China implements its counter-tariffs, it’s anticipated that Trump expects some deal making to begin. The market's swift decline in energy and stock indexes is putting pressure on the administration to take action to avoid any long-term recession. Congress is trying to pass a bill that would require Congress to approve any further tariff increases, but it would require a two-thirds majority to overcome a veto from the President. Trump.

More flooding is expected for the Delta and the South Central Midwest, with the wet conditions continuing before an extended dry pattern returns late Sunday and Monday. Temperatures are averaging 4-9° below average, with snow expected for the far Western Plains before the warming trend begins on April 8. The longer-term forecast for April 16 continues to show a cooler trend in recent days, and it appears this trend will persist into Easter.

Live and feeder cattle futures are anticipated to open sharply lower again, following outside market conditions, especially after yesterday’s weakness. Live cattle are under pressure due to tariff weakness, as China has applied 34% tariffs on all goods, including beef and hides, imported from the United States. Last week’s Commitment of Traders report showed that funds held a record length in the feeder market company, which is at risk on the board.

There was some light cash trade developing late Thursday, with sales in the South at $208-208.50, which was $0.50-$1.00 lower than last week. Dressed sales in the north were in a wide range of $335-345, compared to $333 last week. Box beef values weakened on Thursday, with the choice slipping $1.53 and select off 99 cents. The latest weekly slaughter data showed steer carcass weights rising for the week of March 22, marking the third consecutive week at 950 pounds. This was 26 pounds heavier than a year ago and a record for late March. Initial support for June cattle on further weakness is expected to arrive at $198-200.