52 Thank You for Your Trust & Time, Since 1999 Better Farming | January 2025 the U.S. could benefit both the economies (the two largest in the world), as well as the North American farmer. A higher tariff this go-around, at 60 per cent, could break the camel’s back and push China into a corner, but tariffs in the 10 to 20 per cent range may get absorbed by Chinese companies that are keen on exporting to the U.S. There are market participants who believe that Trump could dust off the old Phase One trade deal and/or negotiate a Phase Two trade agreement. An agreement on the trade deal could be signed quicker than last time but it still needs to go through a process to approved, which means that it could take more than 90 days. China National Cereals, Oils, and Foodstuffs Corporation (COFCO), in mid-November 2024, said that China’s total soybean imports for the 20242025 marketing year are likely to drop by 9.5 per cent Y/Y to 98.8 MMT. The U.S. is expected to make up about 20 to 25 MMT of that total, but that will depend on the U.S.-China trade situation. Since late summer of 2024, U.S. ag exports have gathered momentum, with some hefty purchases by big buyers like China and Mexico. Some market analysts opine that importers are buying in advance or “front-loading” (with respect to the whole marketing year that runs into next summer/fall) so as to avoid having to buy when Trump kicks off his trade wars. A likely reason for the buying momentum, though, is the fact that prices are very attractive and lower, and all buyers, including China, were bargain hunting. Last time, the U.S. government provided support to farmers in the form of a “trade war allowance” as the trade war had caused sharp erosion of grain and oilseed values. They may do the same this time around and provide more free money, but the Canadian farmer is unlikely to get anything of the sort and will have to bravely face the lower commodity prices. Concerns over soybean export sales to China are back in the headlines for 2025. The grain trade and markets are coming to a realization that the “Trump Effect” is unlikely to be friendly for ag commodities. Any country on the receiving end of tariffs will retaliate, which could result in short-term pain for farmers. However, countries could come to the table sooner to negotiate. China’s Premier Zi said that he understands there are differences between the U.S. and China’s trade ideologies but said that he is willing to talk. Be prepared for more volatility as there remains a lot of unknowns and uncertainty going into 2025. BF PLATINUM SPONSORS SILVER SPONSORS HOSTS riskmanagement.farms.com/yieldtour #ONYield25 VOLUNTEER TO BE PART OF THE TOUR! August 11-22, 2025 Save the date for the final events! August 21, 2025 Chesterville August 28, 2025 Woodstock 2025 10th Moe’s Market Minute MOE AGOSTINO & ABHINESH GOPAL Maurizio (“Moe”) is chief commodity strategist with Farms.com Risk Management and Abhinesh is head of commodity research.
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