How are grain and oilseed markets faring after US election?
Initially, grain and other commodities fell on news of his win, according to yesterday's grains and oilseeds report from CRM Agri.
Trump is viewed as likely to kick off disputes with major trade partners. His first term in office was marked by a trade war with China, the leading ag importer. His pledges to impose 10-60% tariffs on US exports have raised fears of retaliatory action.
The dollar surged post-election, driven by expectations that additional Trump’s policies such as tax cuts and reduced immigration could lead to higher US inflation, lowering the chance of interest rate cuts. Given that a strong dollar makes US exports more expensive, the Bcom commodities index initially dropped 2.2%. However, it later trimmed losses to 0.8%, as optimism about economic growth and corporate profits drew investors back to riskier assets, pushing Wall Street stocks to new highs, noted the CRM Agri team.
In Chicago, corn futures for December 2024 recovered, rising 1.4% by midday, while December wheat futures gained 0.1% before encountering resistance due to technical factors and improved rainfall forecasts for US winter wheat crops. Paris wheat futures did even better, helped by a weaker euro and lower Russian wheat stocks, with December Paris milling wheat up 1.2%, although London feed wheat for May 2025 remained flat, reported the analysts.
Oilseeds market outlook
Soybeans, seen as vulnerable to a potential trade war with China, the top buyer, showed less recovery, however. January 2025 contracts remained unchanged and further-out contracts were down slightly, commented the analysts. Soybeans had found support earlier in the week as polls showed Kamala Harris marginally slipping ahead of her rival.
Meanwhile, Paris rapeseed for February 2025 rose 2.2%, following a similar gain in Winnipeg canola futures, amid speculation that Trump might limit US imports of used cooking oil, potentially boosting demand for Canadian canola oil, added the CRM Agri team.
