Analysis Grains
Will Von der Leyen let Trump stew in his own juice?
Free trade and trade tariffs are in the spotlight on the grain market. Trump's plans for an import duty on products from Canada and Mexico have been postponed by a month. He did announce a broad import duty for the EU in the short term. Meanwhile, the top of the EU is in India. Von der Leyen has traveled to New Delhi with a heavy delegation to negotiate, among other things, a free trade agreement.
The March wheat contract on the Matif lost €2 yesterday, bringing it to €223 per ton. Prices were also under pressure on the CBoT. Wheat was the biggest loser with a 1.2% drop, closing at $5.66 per bushel. Corn's loss was limited to 0.3%, closing at $4.78¼ per bushel. Soybeans lost 0.7% and closed at $10.24½ per bushel.
The American president Donald Trump is keeping players in the grain market busy with his trade tariffs. After threatening earlier this week to impose a 25% duty on products from Canada and Mexico starting from March 4, he announced yesterday that it will be postponed until April 2. This is the second time it has been postponed. Originally, Trump wanted to set up a trade barrier at the beginning of April. Trump also announced that a 25% import duty on products from the EU will be implemented in the short term. Trump took a jab and stated 'that the European Union was founded to screw the United States'. Trump is not worried about any countermeasures from the EU. 'They can't do anything,' according to the American president.
Top-level talks in India
The President of the European Commission Ursula von der Leyen has meanwhile traveled to India with a heavy delegation. In New Delhi, discussions will be held on a free trade agreement between the EU and India. With mutual trade amounting to over €130 billion in the fiscal year 2023/24, the EU is India's largest trading partner. The EU would like to see India reduce the duty of 100% to 150% on European cars, wine, and whisky. India, on the other hand, strongly opposes the European duty of 20% to 35% on goods that emit a lot of CO2 during production, such as steel and cement. For the EU, this duty is an important part of the green strategy. Agriculture is also a point of contention. The EU would like to see India eliminate the import duties of 35% to 60% on agricultural products. India is concerned that millions of farmers in the country will face unfair competition from subsidized European agriculture.
The summit seems to come at a favorable time for both the EU and India. Both blocs want to become less dependent on China, and with Trump in the White House, the role of the US on the world stage has also changed. Several analysts are talking about the two largest democracies in the world seeking closer ties.
China's wave of cancellations
China caused unrest in the wheat market yesterday. According to various sources, Beijing has canceled the import of 3 or 4 shipments of wheat from Argentina. This comes after the news earlier this month that 9 or 10 shipments from Australia were canceled. This is reminiscent of almost a year ago when China was busy trying to comply with orders from the US.
Jurphaas Lugtenburg
© DCA Market Intelligence. Op deze marktinformatie berust auteursrecht. Het is niet toegestaan de inhoud te vermenigvuldigen, distribueren, verspreiden of tegen vergoeding beschikbaar te stellen aan derden, in welke vorm dan ook, zonder de uitdrukkelijke, schriftelijke, toestemming van DCA Market Intelligence.
