European market

A new thunderclap hit the markets late yesterday as Donald Trump announced a 90-day suspension of customs duties, with a uniform tax rate of 10% for all countries. The sole exception: China, where the tariff escalation continues day by day. The White House now taxes goods from the Middle Kingdom at over 100%, in response to the 84% tariffs imposed by Xi Jinping. The trade war between the two countries bodes ill for exchanges, but the surprise pause by the American president allowed the markets to rebound. Stock exchanges welcomed the news, as did oil, which showed nearly 8 $/barrel of daily fluctuation yesterday.

However, in light of this turnaround, caution remains essential as uncertainty dominates, and recent days have shown that anything is possible in this matter. It will therefore be necessary to bring fundamentals back to the forefront for grain markets. Today's publications from MPOB, CONAB, and USDA will need to be closely monitored.

European markets did not have time to react to the American president's announcements, as they occurred after 6:30 PM. This explains the massive drop in prices amid fears of declining demand. While today's session should be calmer, beware of overconfidence in this turbulent environment.

American market

The White House has found its target in China, and the escalation of tariffs between the two protagonists will certainly reshuffle the deck of global trade flows. Among the affected commodities, it’s impossible not to mention sorghum and soybeans, as China is the world's largest importer. Among the potential 'winners' of this dispute, Brazil could significantly accelerate its exports to the Middle Kingdom. It remains to be seen whether, as in 2018, the Americans and the Chinese will manage to reach an agreement in the coming months to stabilize trade flows once again. Without such an agreement, it will be difficult for soybeans to maintain any medium-term strength, given China's critical role in trade.

Tonight’s USDA report will be important to follow, but it will be challenging for the U.S. government to assess new global trade flows in the current context. Changes are expected to be rare, but close attention should be paid to global trade as a whole, especially since growth prospects are not looking promising.

Amid the current turmoil, exceptional corn sales were announced yesterday by the USDA, notably 240,000 tons destined for Spain.

Black Sea market

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