Soy, corn, wheat hit multi-week lows on Tuesday on tariff flurry
Possible U.S. tariff relief for Mexico, Canada eases jitters
Trade risks and big South American crops seen curbing prices
Updates at 1216 GMT, changes byline/dateline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, March 5 (Reuters) - Chicago corn, soybeans and wheat rose on Wednesday, recovering from multi-week lows, as indications that U.S. tariffs against Canada and Mexico may be reduced helped ease market jitters over escalating trade tensions.
A further drop in the dollar index =USD and stimulus measures outlined by China also lent support to commodities, though investors remained wary of an economic drag from tit-for-tat tariffs, including against U.S. agricultural exports. MKTS/GLOB
The most-active corn contract Cv1 on the Chicago Board of Trade was up 1.2% by 1216 GMT at $4.57 a bushel, after slipping to its lowest since late December in the previous session.
CBOT soybeans Sv1 added 0.9% to $10.07-1/2 a bushel, while CBOT wheat Wv1 was up 1.4% at $5.44-1/2 a bushel, after both crops fell to their lowest since early January on Tuesday.
U.S. President Donald Trump slapped 25% tariffs on imports from Mexico and Canada on Tuesday and doubled duties on Chinese goods to 20%, drawing immediate retaliatory steps from Canada and China and a pledge from Mexico to also respond.
The prospect of a fully fledged trade war roiled financial markets and worried grain investors about a threat to the $191 billion U.S. agricultural export sector.
But U.S. Commerce Secretary Howard Lutnick said late on Tuesday that Trump is considering granting some relief on imports from Canada and Mexico, such as cars and autoparts, adding a decision would be taken on Wednesday.
"Volatility hasn't had its last word, as (U.S.) negotiations with Mexico and Canada are ongoing," Argus analysts said in a note.
Some traders and analysts said short-term U.S. grain exports to China may not be significantly altered, given a lull in Chinese corn and wheat imports and a shift towards buying Brazil's incoming soybean crop.
"Seasonally, this is a time when China relies more heavily on Brazilian supply," ING said in a note.
Brazil is in the midst of harvesting an expected record soybean crop, a prospect that had already weighed on U.S. prices prior to Trump's tariff moves this year.
Prices at 1216 GMT | |||
Last | Change | Pct Move | |
CBOT wheat Wv1 | 544.50 | 7.75 | 1.44 |
CBOT corn Cv1 | 457.00 | 5.50 | 1.22 |
CBOT soy Sv1 | 1007.50 | 8.50 | 0.85 |
Paris wheat BL2H5 | 215.50 | -0.75 | -0.35 |
Paris maize EMAc1 | 181.75 | 0.00 | 0.00 |
Paris rapeseed COMc1 | 507.00 | -4.00 | -0.78 |
WTI crude oil CLc1 | 67.20 | -1.06 | -1.55 |
Euro/dlr EUR= | 1.07 | 0.01 | 0.68 |
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 Varun H K and Jan Harvey)
((gus.trompiz@thomsonreuters.com))
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