There is no rest for them.
The stock market will not return to normal trading.
Tariff salvos, in the beginning of the "campaign", come in bursts, do not allow the market to calm down. Although in this mode, if you are not mistaken, you can earn more.
The volatility index (VIX), largely reflecting the "hustle and bustle", yesterday morning again reached its maximums (28) after growing by more than 80% over the past month. The peak of December last year was repeated, when Jerome Powell spoke at the meeting of the US Federal Reserve, said that in 2025 there may not be the expected number of rate cuts. The multi-year maximum of the index was in August last year (38), when the yen shook the markets after the unexpected rate hike by the Bank of Japan on July 31 and the fall of the dollar on weak July labor statistics in the United States.
In such a hot environment, the balance of supply and demand from the US Ministry of Agriculture WASDE published yesterday is indicatively favorable.
The Ministry's experts did not take into account the imposed, and even more so the declared duties, in the final figures.
We have repeatedly calculated the possible impact of retaliatory measures on US import duties on the most voluminous products of global trade - wheat, soybeans, corn.
It will be interesting if, in addition to duties on these crops affected by the "trade war", the countries will begin to introduce tariffs on the main share of US agricultural exports - cotton, almonds and sorghum. Or boycott everything from the US in a surge of patriotism.
The tariffs on steel and aluminum introduced in the US today will hit the main supplier of these metals - Canada. This is probably why the strategic epic of the new US administration began with the "51 states".
Yesterday, agricultural trading, on the WASDE forecast, possibly deliberately ignoring the situation, ended with indicatively small changes in quotes. Moreover, despite another failure of the dollar index, almost all went down.
This is clear for wheat. In the balance sheet, Australian production was increased by 2.1 million tons to 34.1 million tons, while exports increased by 1 million tons.
In Argentina, an increase of 0.8 million tons in Ukraine - 0.5 million tons.
In this regard, global wheat ending stocks increased by 2.5 million tons, Russian exports were reduced by only 0.5 million tons to 45 million tons, Chinese imports decreased by 1.5 million tons to 6.5 million tons.
Given the dubiousness of the figures for Russia (most country experts give a figure much lower) and reports of a possible drop in the harvest in India by 2 million tons, we can expect a return to the upward trend in wheat quotations when the market begins to process the flow of clarifications of the expected balance for these countries.
In the balance sheet, forecasts for corn production in Argentina and Brazil have been retained at 50 million tons and 126 million tons, respectively. Although traders had expected Argentina to be cut by 2% after drought hit key producing areas earlier this year.
Also unchanged are soybean production forecasts for Argentina and Brazil at 49 and 169 million tons, respectively.
But Argentina’s crushing is up 1 million tons to 42 million tons, which is why meal exports are up 3.5% and oilseeds by 8%.
China’s crushing is up 2 million tons to 105 million tons. With no change in expected global production, the balance sheet shows a 3 million tons decline in global stocks.
The market will have to react to these figures soon, although Brazil’s expected record harvest (most often quoted as 171 million tons) may offset the loss in traders’ calculations.
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