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Analyst suggests locking in profits ahead of trade war

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AUDIO: Brian Grossman, Zaner Group, LLC

President Donald Trump Thursday declared his intentions to impose steep tariffs on imports of steel and aluminum products. Brian Grossman, market strategist with Zaner Group, LLC. says the stock market took a big hit. However, he states soybeans futures reacted with great stride.

“360 points lower is an ugly day in the stock market,” Grossman said. “Soybeans, the big item we’re worried about retaliation against, took it with stride. We finished well on the day, November up 5 ¾ on the session high and May beans up 12 ½ at 10.68, near the session high. Now, they’re not feeling real nervous. As time goes on and China starts to hint as to what kind of retaliations might come from this, the soybean market is going to quickly take notice.”

Grossman fears growers could soon see a dollar taken out of soybean futures.

“We could easily see a buck taken out of this market,” Grossman said. “South American crop – granted they have drought issues – is moving along and their grain is going to be hitting ports. China has plenty of options. They can go down to South America and make us sweat it out for awhile while we’re trying to sort out the tit-for-tat type deal.”

Grossman encourages growers to sell soybeans now. He also offers suggestions to growers leary about the anticipated retaliatory sanctions.

“We’re at good prices,” Grossman said. “These are levels we have not seen since this time last year. In general, I think locking in prices at these levels is a really good idea. If you’re a little unsure about it, but want to protect yourself against Chinese retaliation, you could look at a shorter put-option, something in the July contract – something to get you into the summer months, but through this period where we’re worried.”