SINGAPORE- Chicago soybean, corn and wheat futures gained more ground on Thursday, with agricultural markets supported by indications that US tariffs against Canada and Mexico may be reduced.
The most-active soybean contract on the Chicago Board of Trade (CBOT) added 0.7 percent to $10.18-1/4 a bushel, and corn gained 0.6 percent at $4.58-1/4 a bushel. Wheat rose 0.8 percent to $5.52-1/2 a bushel.
The White House on Wednesday said US President Donald Trump will exempt automakers from his tariffs on Canada and Mexico for one month as long as they comply with the terms of an existing free trade agreement, and said he is open to hearing about other products that should be exempted.
Trump slapped 25 percent tariffs on imports from Mexico and Canada on Tuesday and doubled duties on Chinese goods to 20 percent, drawing immediate retaliatory steps from Canada and China and a pledge from Mexico to respond.
US grain exports to China may not be significantly altered in the near term, given a lull in Chinese corn and wheat imports and a seasonal shift towards buying Brazil’s incoming soybean crop, analysts and traders say.
Brazil is in the midst of harvesting an expected record soybean crop, a prospect that had already weighed on US prices prior to Trump’s tariff moves this year. China’s new tariffs on US farm goods are poised to reshape global trade flows, prompting the world’s top agricultural importer to source more meat, dairy and grains from countries in South America, Europe and the Pacific.
Shipments to China from key soybean supplier Brazil, top wheat exporter Australia and major pork supplier Europe, could surge as a trade war between the world’s largest economies heats up, industry officials and analysts said.
