The markets were closed yesterday for the Martin Luther King holiday in the US. In the overnight trade corn is mixed with soybeans and the wheat sector positive. Oil closed down $0.46 yesterday at $77.39 per barrel. It is weaker again this morning with it now trading at $75.46 per barrel. Our dollar started out yesterday morning at $0.691 US and then went up to $0.700 US before noon. It fell back down last night and is currently valued this morning at $0.692 US.
President Trump was inaugurated yesterday and in his inauguration speech he did not talk specifically about tariffs against Canada or Mexico. This led to our dollar jumping up in value versus the US currency. Last night as President Trump was signing a bunch of Presidential Orders he talked about implanting the 25% tariff as early as February 1st against both Canada and Mexico. This led to our dollar quickly weakening. It was looking like maybe we were going to be spared the hammer of the new tariffs but once again President Trump pulled them out.
His actions also greatly affected the agricultural markets. With no specific start times for tariffs against any country, including China, the markets were not immediately hit with a big negative. He has announced for China that his administration will study if China lived up to their Phase 1 trade agreement and if not what actions they should take. In reality he just punted the ball down the road on making the tariff decision. As such our markets did not have the immediate threat of a tariff war to deal with and quickly went on to other matters.
Soybean markets rallied overnight with reports that early harvest results out of Brazil are not as strong as traders have anticipated. It is possible that they have had too much rain for some of their current crop as the excess moisture is also slowing down harvest. Currently they report that harvest is only 1.4% complete which is well behind their 5 year average of 5.9%. This slow harvest is also supporting corn prices as a slow harvest delays planting of the Safrinha corn crop.