Adios tariffs, hola hogs
Hogs, corn and soybeans rallied sharply on Thursday when President Trump reversed his tariff plans and announced that Mexico would not be subject to tariffs on pork, beef, corn and beans — all governed by the U.S. Mexico Canada Agreement — for at least one month.
With Mexico being the largest importer of U.S. pork, lean hogs futures contracts jumped 2.5 cents on the news. Corn also recovered from a month’s long decline and rallied by 15 cents per bushel from Tuesday’s low.
Trump stated that all other commodities included in the USMCA agreement would be excluded from tariffs. A debate about potash fertilizers imported from Canada ensued, but Trump consented to Ag Secretary Rollins’ suggestion to reduce the tariffs on that to 10%.
Copper shows its metal as tariffs shift
Copper prices rose early in the week as the world anticipated the Trump tariffs featured in his Congressional address but settled back as tariffs were delayed. Sources suggested that U.S. buyers would be competing to secure supplies before tariffs take effect.
A 2.9% growth in U.S. copper demand is expected in 2025 with some suggesting demand could double in 10 years. While the U.S. produces 6% of the world copper supply, just less than 50% of the metal used here is imported, primarily from Chile, Canada, Mexico, Peru and The Democratic Republic of the Congo.
While China dominates the globe in copper refining, it gets its copper largely from Latin America and has major investments in the The Democratic Republic of the Congo. The U.S. lags behind in refining and smelting of copper.
Prices can vary as President Trump continues to change the tariff starting dates and the various products subject to tariffs. Copper, known as the electricity metal, is used for virtually all things electrical, including construction, auto manufacturing, transmission of energy and energy storage. Environmentalists argue that newly proposed U.S. mines and processing plants can disrupt and pollute the land.
We’re number one … Well, we used to be
The U.S is seeing a shift in food supply as we now import more food than we export. Current data indicates that 15% of our food supply is now imported, including 55% of fresh fruit, 32% of fresh vegetables and 94% of seafood.
Reasons given include demand for year-round fresh produce along with taking advantage of global trade and supply chains.
Agricultural imports are expected to reach a 6.5% increase to $219.5 billion by the year ending on Sept 30, while exports are estimated at $170.5 billion, 2.2% lower than last year. These numbers do not include egg imports needed due to the U.S. bird flu crisis.
Analysts also suggest that imposition of U.S. tariffs could make the import balance even worse. Currently, Russia has overtaken the U.S. as the top wheat exporter, while Brazil has surpassed the U.S. in corn, cotton and soybeans.
CME midday prices — Price per bushel: July Soybeans, $10.39; July Corn, $4.76; July Wheat, $5.66. April Livestock per 100 pounds: Cattle, $200.50; Hogs, $87.00. Metals per troy ounce: April Gold, $2,916; May Silver, $32.75. May Copper per pound: $4.70. April Crude oil per barrel: $67.10.
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