- US hog farmers squeal over US:China trade dispute
Hog farmers in the US have found themselves in the center of a trade war with China, after the country unveiled 25 per cent tariffs on pork in response to US tariffs on steel. US President Donald Trump announced tariffs on $60 billion (£42.5bn) worth of Chinese goods, with Beijing responding with retaliatory tariffs on goods including pork, fruit and wine. US pig farmers were dependent on export markets, exporting more than 26 per cent of production last year. About $1bn of this went to China, according to the National Pork Producers Council (NPPC). The US group Farmers for Free Trade called it a tax on American farmers ‘brought about by protectionist trade policies’. Co-chair Max Baucus said American farmers were the first victims of an ‘escalating trade war’. He said: “With farm incomes already declining, farmers rely on export markets to stay above water. These new tariffs are a drag on their ability to make ends meet.” He was concerned this could be the calm before the storm and called for the Government to ‘de-escalate both the trade rhetoric and actions’.
- Rollercoaster trading in wake of China tariff threat
While the latest salvo in the US: China trade dispute dominated commodity markets yesterday, analysts are emphasizing that weather concerns rather than political factors are the main market driver in the short term. China issued its retaliatory threat of 25% import tariffs on a $50 billion basket of US imports early Tuesday morning, sparking frenzied Wednesday trading. The Dow Jones I and S&P indexes in morning trading, with investors looking to gold as a safer haven. But he indexes actually closed higher on the day as the market realized that the proposed measures, if ever enacted, would take some weeks to come into effect. “What a rollercoaster ride we are on. Another mammoth daily trading range (which is becoming the norm) with the mini Dow trading from 23,361 – 24282 or 921 points, and the mini S&P from 2559.50 – 2649.75, over a 90 point range today…. simply amazing,” comments First Choice Commodities’ Mike Mawdsley.
The cold temperatures and precipitation across the Midwest doesn’t appear to be going away any time soon. Over the next 10 days, Accuweather forecasts show weather patterns of below normal temperatures and above normal precipitation continuing for the next 10 days. The markets took a big hit yesterday only to recover after hitting some key support levels. Trade talks suggest that after the warning from China of implementing retaliatory tariffs on Beans that sent grain and oil seed prices plummeting that Chinese end users were big buyers of Soybeans at those lower prices which in turn made for price stabilization. The losses from yesterday were recovered today. Corn finished about 8 cents higher, Beans was approximately 14 cents higher and even Wheat joined in on the rise to finish 6.50 cents in the black.