Setzer: Grain Markets ‘Responded Favorably’ to 30-Day Tariff Delays

Last weekend, President Trump issued an Executive Order imposing 25-percent tariffs on Mexico and Canada, as well as additional 10-percent tariff on Chinese imports. But on Monday, Trump announced he was hitting the pause button on Mexico’s tariffs for one month after they agreed to try and stop the flow of fentanyl and other drugs into the U.S. After the close of trade on Monday, it was also announced that Trump would delay tariffs on Canada for one month as well.

“All in all, the market is taking it very well, especially with the updates on Mexico,” says Karl Setzer with Consus Ag Consulting.

He says the grain markets responded favorably Monday to the news that the Mexican tariffs would not be put into place right away.

“Mexico, one of our leading corn importers, is taking more soybeans and soy oil from us. [Mexico is] importing more wheat from us, so with all those coming in, we are seeing a fairy favorable reaction in the corn, soybeans, and wheat complex,” he says.

However, Setzer says the livestock sector took a hit on Monday from news of Trump’s tariffs.

“Feeder cattle posted a huge reaction, so did live cattle. Both of those are technically overbought. Funds are record long for both live cattle and feeders, so there was a bit of a correction there,” says Setzer.

April Live Cattle fell by $2.15 to $200.15 a hundredweight at the close of trade on Monday.

He adds that hogs may be the commodity that sees the biggest impact from any tariffs imposed against Canada, Mexico, and China.

“Pork trade in 2024 between [Canada and Mexico] accounted for 32.5 percent of U.S. exports went to Mexico, eight percent went to Canada. If you combine the two, that’s quite a bit. It looks like we’ll get that Mexican trade continuing there, but our Chinese demand in China—if we lose that business going forward, the gain in Mexico is not going to offset the loss in China,” according to Setzer.

On Monday, April Lean Hogs ended $4.00 lower at $86.35 a hundredweight.

According to American Farm Bureau Federation (AFBF), more than 20 percent of U.S. farm incomes come from exports, which are dominated Canada, Mexico, and China. Just last year the U.S. exported over $30 billion in agricultural products to Mexico, $29 billion to Canada and $26 billion to China – our top three markets and nearly half of all exports by value combined.

CLICK BELOW to hear Hoosier Ag Today’s full conversation with Karl Setzer with Consus Ag Consulting, as he shares how news of Trump’s tariff announcements impacted the grain and livestock markets on Monday.

For more information on Consus Ag Consulting, visit ConsusAg.net.