AUDIO: Brian Grossman, Zaner Group, LLC.
China threatens to impose additional tariffs on United States goods. A market strategist shares how China’s threat impacted grain markets Tuesday and what growers can expect moving forward.
Grain markets Tuesday reacted emotionally to China’s proposed plans to impose a 25% tariff on United States corn, soybeans and frozen beef. Nearby corn futures fell 7 ½ cents, ending the day at $3.81. Nearby soybean futures dropped 22 ¾ cents lower, ending the day at $10.15 ¼ cents. Brian Grossman, market strategist with Zaner Groups, says corn and soybean futures closed better than expected.
“Looking at the last four years, a sale over $10 on beans was good, a sale over $4 on corn was good. I can’t argue with anybody wanting to make sales. There is opportunity out there for people who might be able to sleep a little better at night by having sales in the books, but believe there’s opportunity to come back in and buy a call option, at least know what your maximum risk is,” Grossman said.
Grossman says growers can expect to see volatility throughout grain markets this week.
“The big question comes down to, ‘How much did these tariffs actually change the situation?,’” Grossman said. “They’re just proposals, so they’re not in effect right now. We love to talk about the tariff on soybeans, but it is now April and we’re in the timeframe where China typically stops buying from us. It’s going to be more so – come September/October, are we getting along with China at that point?”
He encourages growers not to panic, as “nothing has changed, it’s all words.”
“The biggest thing is – everybody’s gotta breathe. We came into an emotionally charged market. Analysts everywhere have their own opinions, but we need to remain calm, not let our emotions take advantage of our decisions, think it through and make sure we’re doing what works for our operation,” Grossman said.