Chicago corn, soybeans, wheat hit new multi-week lows
China targets U.S. farm goods in response to U.S. tariffs
Markets also wary of disruption to grain trade with Mexico
Updates at 1141 GMT, changes byline/dateline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, March 4 (Reuters) - Chicago corn, soybeans and wheat lost more ground on Tuesday, setting fresh multi-week lows as retaliatory Chinese tariffs on U.S. farm goods heightened concerns that President Donald Trump's trade policy will disrupt U.S. agricultural exports.
Grain markets were also bracing for possible fallout from U.S. tariffs against Canada and Mexico.
Price losses were moderate, however, after the markets had already fallen sharply since last week in anticipation of more U.S. tariffs, with the immediate impact on trade flows seen as potentially limited.
Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%.
China swiftly retaliated, announcing 10%-15% hikes to import levies covering a range of American agricultural and food products, and placing twenty-five U.S. firms under export and investment restrictions.
China is by far the world's largest soybean importer, and Mexico is a major buyer of U.S. soybeans, corn and wheat.
"It is broadly negative for U.S. agricultural markets," said Ole Houe, director of advisory services at Ikon Commodities in Sydney.
"There are enough corn and soybean supplies in the world for China to make the switch, it is more of an issue for the U.S."
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 1.1% at $10.00 a bushel by 1141 GMT, after reaching its lowest since January 9.
CBOT corn Cv1 was down 1.3% at $4.50-1/2 a bushel after hitting its lowest since Dec. 24.
CBOT wheat Wv1 was 1.0% lower at $5.42-1/4 a bushel and earlier reached its weakest level since Jan. 28.
Some traders and analysts said short-term export flows to China may not be significantly altered, with an advancing Brazilian harvest expected to absorb the bulk of Chinese demand in the coming months.
"China was not buying corn at all recently, same for wheat. For soy, the current export window is for Brazil," a European trader said.
"So in any case, China would have been buying Brazilian soy until the U.S. new crop and maybe by then we will have some sort of trade deal."
Traders are also watching to see if U.S. tariffs on Canada could shift more Canadian oilseed and cereals towards other destinations.
In wheat, news of a sharp upward revision to the official estimate of Australia's wheat crop added pressure on prices.
Prices at 1141 GMT | |||
Last | Change | Pct Move | |
CBOT wheat Wv1 | 542.25 | -5.50 | -1.00 |
CBOT corn Cv1 | 450.50 | -5.75 | -1.26 |
CBOT soy Sv1 | 1000.00 | -11.50 | -1.14 |
Paris wheat BL2H5 | 216.75 | -0.75 | -0.34 |
Paris maize EMAc1 | 186.00 | -8.50 | -4.37 |
Paris rapeseed COMc1 | 519.00 | -8.25 | -1.56 |
WTI crude oil CLc1 | 67.68 | -0.69 | -1.01 |
Euro/dlr EUR= | 1.05 | 0.00 | 0.32 |
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per metric ton | |||
(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Rashmi Aich, Eileen Soreng, Janane Venkatraman and Shreya Biswas)
((gus.trompiz@thomsonreuters.com;))
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