U.S. grains: Corn, wheat, soy rally on delay to Mexican tariffs

Chicago | Reuters — Chicago corn, wheat and soybean futures jumped on Monday, rallying from early declines, as U.S. President Donald Trump announced tariffs threatened on Mexican goods would be paused for a month.

Futures had tumbled in early moves after Trump over the weekend ordered impose 25 per cent tariffs on imports from Canada and Mexico and 10 per cent tariffs on imports from China, triggering fears of a broader trade war which could impact U.S. agricultural commodities.

But soy, corn and wheat rebounded as the U.S. and Mexico reached an agreement for new tariffs on Mexican goods to be delayed, with Mexico reinforcing its northern border with 10,000 National Guard members, and the U.S. acting to prevent trafficking of high-powered weapons to Mexico.

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March wheat futures on the Chicago Board of Trade were up 7-1/4 cents to $5.6675 a bushel, after reaching $5.69, the highest point since Nov. 21.

CBOT March soybeans rose 16-1/4 cents at $10.58-1/4 a bushel and most active March corn gained 6-3/4 cents at $4.88-3/4 a bushel, rallying after dipping to its lowest point since Jan. 13.

“I think the confirmation of things being delayed a month and progress being made with Mexico certainly gave a big boost to the grain and oilseed markets,” said Arlan Suderman, chief commodities economist at StoneX.

Futures were already beginning to bounce back prior to the announcement as China had not immediately announced retaliatory tariffs on U.S. goods, he added.

While Mexico is the biggest importer of U.S. corn, China is the No. 1 market for U.S. soybeans. Mexico, Canada and China import several other agricultural goods from the U.S., including wheat.

Canadian Prime Minister Justin Trudeau responded with an announcement Saturday that Canada would place its own tariffs of 25 per cent on $30 billion in U.S. goods, to take effect on Feb. 4.

Canada appears to be holding strong on its threat, said Don Roose, president of Iowa-based U.S. Commodities.

Analysts said that gave additional strength to wheat, with expectations that the flow of Canadian wheat to the U.S. would slow.