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Veteran Contributor

Floor Talk April 4

Soybeans and grains plunged in overnight trading after China came out with a list of more than 100 items on which it would impose tariffs including soybeans, corn, beef and durum wheat. The tax would be 25%, according to the Chinese. Growers, traders and analysts had all been expecting this for weeks but to see it on paper has everybody running for the door. Wheat lost 48 cents, corn was down 15 cents and wheat lost 7-9 cents overnight. In what now looks like a precursor to the tariff announcement, China wasn't on last week's list of countries that bought US soybeans, unusual because it's usually the biggest buyer on a weekly basis. China's tariffs will be on $50 billion worth of US goods and are a direct response to the Trump Administration's levies on $50 billion worth of Chinese goods. Beijing also announced tariffs on aircraft and parts and autos with a combined value of about $27 billion, so it's not just the ag sector that's getting pinched. Neither the US nor the Chinese tariffs will take effect immediately, and China's finance minister said there's still time to negotiate. It's likely the Chinese will not impose its tariffs unless Washington takes action first. Get the details in today's 3 Big Things

 

Brent Crude Oil = down 1.2%.

West Texas Intermediate = down 1.4%.

Dollar = down 0.1%

Wall Street = U.S. stock futures lower in pre-market trading.

World Markets = Global stocks lower overnight

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15 Replies
Advisor

Re: Floor Talk April 4

Hate to say I warned all of you this is what would happen. I hate being right about Trump, hope it was all worth it. You should all take a long look in the mirror and realize some , not all, but some of you are responsible for this mess.
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Veteran Contributor

Re: Floor Talk April 4

It would'nt matter anyway the traders would still find a reason too knock our prices down this just happens too work out for them.
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Veteran Contributor

Re: Floor Talk April 4

The Sky is Falling... The Sky is Falling

 

it's no wonder they never let anyone ..(until now).. know what is being discussed at the negotiation table .. people over-react ... these at this point are just negotiations and not one tariff has actually been imposed yet..

 

relax let them talk it out... i really think they should go into 'an executive session'

 

BTW weren't most of you making fun of the recommendations on MtoM ... not my fault you didn't protect yourself or Trumps.. you were warned..

 

Like cborman says ... any reason at all

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Veteran Advisor

Re: Floor Talk April 4

If a person needs the money and has to sell now, this doesn't look so good.  If one is looking at longer term hedges and already has some sold, this doesn't matter.  If one hasn't placed the hedge it might look like a lost opportunity.  

I bought my beans back at a profit and placed new open sell orders above the market.  Obviously, where I'm putting my money is the market will recover at least somewhat by summer, touch my sell orders and then go down into harvest.  We'll have to see.  If beans go on down from here, then I'll be doing the wrong thing.

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Honored Advisor

Re: Floor Talk April 4

Jim that sounds like something I would do........... the knee jerk reactions will make you some spending cash occasionally.

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Honored Advisor

Re: Floor Talk April 4

SA farmers just got a price hike., should be in positive basis at the ports now.

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Honored Advisor

Re: Floor Talk April 4

Not one thing has changed fundamentally since Yesterday except one more days supply has been used.

 

Argentina still has a disaster and Brazil's crop is mostly harvested, ours is not planted. 12.9°F here in southern Iowa this morning.

 

China has been taking 73% + or - of the Brazilian bean crop the last few years. If they take the whole thing it's just gonna cost them more to get it ALL. 

 

Let the CBOT traders do whatever. Just Adjust the basis...the fundamentals are the same only the funnymentals have changed. Keep your eye on the ball and adjust the basis.

Brazil just added 10¢ to their yesterday price...

 

Just adjust the basis...

Honored Advisor

Re: Floor Talk April 4

Hobby is right.   If this thing goes as many are claiming, Brazilian soybean prices are going much higher.   

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Veteran Contributor

Re: Floor Talk April 4

Old equation:

 

(Brazil Beans x Oil/Protein Premium) + Transport cost from Brazil = US Beans + Transport cost from US port

 

New equation:

 

(Brazil Beans x Oil/Protein Premium) + Transport cost from Brazil = (US Beans x 1.25) + Transport cost from US port.

 

Only problem is that the tariff hasn't taken effect, and likely won't. China says "We're GOING to enact these tariffs, if the US doesn't negotiate an overall deal."  What has Trump always said?  "We need to negotiate better deals."  I think this is just his way of getting them to the table.  

 

Hope everybody sold a little something yesterday.  Won't see those prices again until the market is convinced the 25% tariff isn't going to happen or will be a lot lower. When the market offers you a price you can make money on, you have to sell SOMETHING.Trying to sell at the top often leads to selling when you need cash to make a payment, and that usually leads to selling closer to the bottom than the top,

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