Reduction of export duties by Argentina and the deterioration of the Chinese economy will increase pressure on prices for soybeans, corn and wheat

On Friday, world oil and agricultural prices declined amid news about China’s economy, Argentina’s export duty cut and the start of new tariff wars by the United States.

March futures declined:

• by 1.9% to 199.9 $/t – for soft winter SRW wheat in Chicago,
• by 2% to 205.6 $/t – for hard winter HRW wheat in Kansas City,
• by 1.6% to 218.7 $/t – for hard spring HRS wheat in Minneapolis,
• by 0.7% to 191,9 $/t – for corn in Chicago,
• by 0.95 to 387,9 $/t – for soybeans in Chicago.

On the Paris Euronext March futures also fell:

• wheat – by 1.9% to 226 €/t or $236.4/t,
• corn – by 1% to 213.75 €/t or 223.6 $/t.

Argentine authorities to support the critical export industry announced a reduction for the period from January 27 to June 30, the duty on exports of soybeans from 33% to 26%, soybean meal and oil – from 31% to 24.5%, corn, wheat, barley and sorghum – from 12% to 9.5%.

Argentina is the world’s largest exporter of soybean oil and meal and the third largest exporter of corn, as well as a major wheat producer. amid the heat and lack of rainfall, the Grain exchange of Buenos Aires has lowered its forecasts for soybeans and corn in 2024/25 MG to 49.6 and 49 million tons, respectively, which has already led to higher prices.

U.S. Authorities on Saturday began military aircraft to send migrants to Colombia and Mexico, but these countries refused to accept the aircraft. Then Trump imposed a 25% duty on goods from Colombia and warned that he would increase it to 50% in case of refusal to cooperate. In response, Colombia imposed a duty on goods from the United States, but sent its own plane to pick up the migrants. Apparently, the US has already started trade wars to achieve its goals.

China’s manufacturing PMI fell to 49.1 (although it was expected to remain stable at 50.1), and the non-manufacturing PMI fell from 52.2 to 50.2, indicating a decline in production despite the government’s stimulus measures. Trump’s imposition of tariffs on Chinese goods will further reduce demand for them and slow the economy.

The new head of the CIA, John Ratcliffe, said that the covid-19 pandemic was caused by a virus leak from a laboratory in Wuhan. This will be an additional lever of pressure on China by the new US Administration and, amid demands for trillions in global damages, will bring down the Chinese economy.

Tags: corn, prices, soybean, wheat