Good Morning,

Futures are steady in corn and soybeans this morning.

The trade continues to maintain its risk-off attitude with the Trump Administration bumped tariffs on $200B in goods from China to 25% and filing paperwork overnight to begin the process of applying a new 25% duty on an additional $325B in products. Additionally we have the monthly WASDE report from the USDA due out at 11 am CST. The pros are all over the place on their estimates for new crop corn and bean production, so volatility could be extremely high as traders digest the information.
China has promised to retaliate to the tariffs, but exactly how remains unknown. The goal is for US representatives to push Vice Premier Liu to agree to the deal crafted over the last several months and to prevent the Chinese from dragging the process out to make it an issue in the 2020 ballot.

The Trump Administration unveiled a new tool in the negotiating process, Vice President Pence, who was in Minnesota as he spoke about the government providing additional aid to US farmers to help offset the impact of the trade war. These payments would ratchet up the pressure on the Chinese delegation to come to an agreement. Just this morning President Trump hinted that he would be willing to use some of the money accrued through the tariffs to purchase US Ag products to provide for humanitarian assistance programs in poor and starving countries. Traders appear willing to wait for more details of the program before getting too excited.

Have a Safe Day!

Garry Gard