Trump effect lowers grain markets

Canola, soy, corn and wheat markets were all impacted by geopolitical and weather factors in the second week of November

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Published: November 20, 2024

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Canola blooms under an irrigation pivot near Neepawa in western Manitoba, July 2023.

There’s little doubt that the outcome of the United States election played a major role in declines seen in commodities markets. However, the forthcoming return of President Donald Trump was not the only factor weighing on values.

North American markets saw notable declines in canola, the soy complex, corn and wheat.

Foremost in generating these concerns was Trump’s rhetoric about tariffs on U.S. imports. Should his administration proceed with those tariffs, there’s little doubt a trade war will begin with China, the largest buyer of U.S. grains and oilseeds.

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The trade war with China during Trump’s first administration led to a massive increase in Brazil soybean production. Numerous estimates for Brazil’s 2024/25 soybean crop exceed 160 million tonnes. That’s at least 40 million tonnes more than before Trump was president. China turns to Brazil for the majority of its soybean imports. Another dispute could seriously harm U.S. soybeans.

Added to that are questions about where Canada fits in Trump’s tariff scheme, especially went it comes to canola oil exports. Levies could be devastating because the U.S. is Canada’s biggest foreign canola oil buyer.

Since the day after the election, January canola futures dropped $20 per tonne at $627.60. There’s an idea in the market that canola is stuck in a wide trading range that will continue until Trump is sworn in on Jan. 20. From there, who knows what looms?

January soybeans in Chicago gave up 50 cents per bushel during the same period, while December soyoil lost 1.94 cents per pound and December soymeal forfeited US$11.40 per short ton.

Also unfavourable to oilseeds is Trump’s pick for the next head of the Environmental Protection Agency. Former New York Rep. Lee Zeldin is said to be quite pro-fossil fuel and not too keen on biofuels.

Outside of the Trump administration, rain for major growing areas of the continental U.S. weighed on values, especially for wheat as conditions improved. Dry conditions in Brazil and Argentina have diminished as questions about each country’s soybean and corn output have been replaced with optimistic projections.

The North American commodities were already facing a bumpy road. Trump makes that road quite rocky.

About the author

Glen Hallick - MarketsFarm

Glen Hallick - MarketsFarm

Reporter

Glen Hallick grew up in rural Manitoba near Starbuck, where his family farmed. Glen has a degree in political studies from the University of Manitoba and studied creative communications at Red River College. Before joining Glacier FarmMedia, Glen was an award-winning reporter and editor with several community newspapers and group editor for the Interlake Publishing Group. Glen is an avid history buff and enjoys following politics.

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