News from the White House that it would place a 5% tariff on all imported products from Mexico beginning June 10th in attempt to stem the flow of illegal immigration has the CBOT Ag complex under pressure. Corn is down 6, beans down 3 and wheat down 12 cents.
While the weather has been a driver of the markets over the last couple weeks, fund managers are concerned about Trumps plan to close the boarder. The announcement on the tariff included the threat to increase the duty 5% every month until it reached 25% unless the Mexican government makes significant progress in solving the problem.
Given that Mexico imports more than 600M bu. of corn and 140M of soybeans the impact could be another significant hurdle for the US Ag markets. South American crops are huge and these new tariffs could easily have the Mexicans turning there for cheap imports.
Weather models are in good agreement that Mother Nature is finally going to cooperate a little over the next week. Forecasts show a warmer and drier outlook that should allow a significant amount progress be made in getting crops in the ground. Those in the eastern Corn Belt can expect a dry window that should last until the middle of next week.
Have a Safe Day!