PARIS/SINGAPORE: Chicago soybean, corn and wheat futures rose for a second session on Thursday to recover further from multi-month lows as signs that Washington may ease tariffs on Canada and Mexico tempered fears about disruption to agricultural trade.
The White House on Wednesday said U.S. 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.
The tariff relief helped Chicago futures rebound from lows on Tuesday when the implementation of U.S. tariffs against Canada, Mexico and China, followed by retaliatory levies from Ottawa and Beijing, rattled investors.
“Ongoing negotiations between the U.S. and Canada, as well as between the United States and Mexico, give a glimmer of hope to American operators,” Argus said in a grain note.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.9% at $10.20-3/4 a bushel by 1146 GMT.
Corn was 0.4% higher at $4.57-3/4 a bushel, while CBOT wheat rose 0.6% to $5.51-1/4 a bushel.
Wheat down 5-9 cents, corn down 4-7, soy down 12-13
Investors are concerned about a broader trade war developing compared with the U.S.-China tariff tussle during Trump’s previous term.
China’s new tariffs on U.S. 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, analysts said.
However, U.S. grain exports to China may not be immediately affected, given a lull in Chinese corn and wheat imports and a seasonal shift towards buying Brazil’s expected record soybean crop.
A slight additional fall in the dollar index, which held at a four-month low, also lent support to Chicago grains.
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