Good Morning,

Markets are on the slide again this morning after China revealed its counter measures to the US tariffs expected to be implemented on September 1. Reports are that China will put 5% to 10% import tariffs on $75 billion in US goods coming into the country. The tariffs will be applied in two steps, matching the US tariffs implementation on September 1 and December 15. The total tariff list includes over 5000 goods coming from the US to China. China also said that is will resume additional tariffs on US auto and auto part imports, while indicating that crude oil is among the products that will face a 10% tariff.
Reports that President Trump will meet with the EPA and USDA office to talk about different options regarding ethanol and the exemptions to 31 oil companies that was proposed. The blow back in the industry has made the Trump administration look further into the impact this policy would make and possibly take a different course.
Pro farmer will release their US corn yield sometime later today. The tour found Iowa corn at 182.8 down from last years 188 bpa, and NASS estimate of 191 bpa. Minnesota corn was estimated at 170 bpa vs. NASS 173 bpa.
We may not agree with the USDA’s projections of the size of this years crops (acres and yield), due to prevent plant and late planted acres that will not meet historical yield potential but those numbers may be irrelevant. If no one can afford to purchase a product the lack of demand will keep prices from rallying. The law of supply and demand is at work and needs to be kept in mind by producers that are expecting a big move in the markets in the coming months. The lack of demand is and will keep prices from rallying unless there are some dramatic changes. The markets always end up at the level where supply and demand meet and as of right now that price appears to be lower.

Have a safe day!

Garry Gard