The commodity markets had an interesting reaction to the Supreme Court striking down President Trump’s tariffs last week. Ted Seifried, the vice president and chief market strategist with Zaner Ag Hedge in Chicago, said there are questions that need to be answered after last week.
“I think the biggest question in my mind is that, if we’re going to do a new blanket ten percent tariff on every country, does that leave room to negotiate with each country individually, or is it an all or nothing thing? Because if it’s an all or nothing thing, that makes negotiations with China a little bit different. They’re meeting at the end of next month. If you can’t pull that ten percent tariff off of each country individually, I don’t know if there’s much to talk about there, aside from Taiwan and rare Earth minerals and things like that.”
The soybean market was back and forth on Friday.
Soybeans were sharply lower based on the tariffs getting struck down. I think a lot of people were like, that seems super counter intuitive. Tariffs are going away. That should be good business with China. But I think the way the market was looking at that was, if there isn’t this tariff anymore on China, then there’s really no reason for them to buy that extra eight million metric tons at a time of year where Brazil is much, much cheaper. They’re going into their harvest. And this is the time when Brazil takes over the global export market. China buying eight million metric tons from us now, at this time of the marketing year, really doesn’t make any sense, unless it’s politically motivated.”
After a sharp initial drop on Friday, the soybean market pushed toward recovery throughout the day.
You immediately had a 23-cent spike to the downside in beans. Throughout the day, we recovered because we knew Trump was going to be giving a talk, so the market was waiting. We rebounded. We came back to pretty close to unchanged, waiting to see what Trump had to say. And then, during Trump’s speech, soybeans, for a brief moment there, looked like they wanted to break out to the downside, because Trump was very angry, and it sounded like he was going to make this big, really nasty announcement. But then, when the ten percent blanket announcement, what actually happened, came out, I think soybeans sort of breathed a little bit of a sigh of relief that it wasn’t worse, that it’s not 15 or 20 or, you know, some crazy number. But then, you know, after all of that, there are a lot of details that we still need to know. One, is this even legal and constitutional? Certainly, President Trump says it is. But, you know, he said it was the first time, and we found out Friday morning that that one wasn’t.”