Friday January 31, 2025

• The markets is starting off the day in the red after another volatile week.
  • Corn led the way lower on the overnight market with high single digit losses, this is after an over 80 cent rally in recent months.
  • The market is heading into the weekend with lots of uncertainty. 
• As of this morning it appears that Trump is still standing behind his vow to impose 25% tariffs on imports from Canada and Mexico. This is weighing on the market.
  • He also plans to place a 10% tariff on China for their role in the opioid epidemic.
  • Since 2018 both Canada and Mexico have replaced China as the largest US trading partners. (see chart below)
• Mexico states they are ready to retaliate if the US imposes tariffs. The nation is ready to implement tariffs up to 20% targeting products that originate from areas that strongly supported Trump in the election. 
• Rainfall in Mato Grosso has slowed soybean harvest which is also delaying corn planting. Mato Grosso is Brazils top corn producing state. As of last Friday only 1% of the crop was planted, the slowest pace for the date since 2011.
  • In other years when the state saw delayed planting they had some of their lowest corn yields.
  • Parana is Brazils second largest producing corn state and their planting was at 9% complete which is a normal pace.
• US corn exports were strong last week. They were down 18% compared to the previous week but up 39% from the prior 4 week average. Soybean sales fell below pre-report expectations. Wheat sales were close to the higher end of expectations.