2025 U.S. Global Tariff War Could Last Longer than Expected
By Aleah Harle
Farms.com Risk Management Chief Commodity strategist Moe Agostino believes the USDA gave farmers a gift in January when the USDA dropped the corn yield and ending stock estimates for the 24/25 marketing year.
"The January crop report was a gift,” proclaims Agostino. “It was a one in 20-year report that we may not see again for another 20 years. The funds were very short the grain complex and the USDA headline news was enough for them to cover their short positions in corn at -700,000 contracts and go long corn and drive the price of corn higher."
Agostino made several presentations about commodity markets during the recent London Farm Show in March.
With recent volatility due to the threat of U.S. tariffs in the markets, the funds started to panic sell explains Agostino. When in doubt, get out. Agostino feels that there is not much clarity on what the US wants from the tariff wars, and he does not expect there to be clarity for some time as the U.S. tariff war escalates, it will remain an anchor on the markets heading into the 2025 planting season.
Agostino advises that canola has stronger fundamentals than corn does and ending stocks are even tighter and that is why the funds were buying canola contract at a new record pace, but he cautions farmers still need to get past the trade wars to go higher as it will keep commodities hostage.
The commodity analyst says that the U.S. farmer will plant more corn acres in 2025 due to better economics and that will keep a cap on new crop corn prices as ending stocks go back up in the 25/26 marketing year.
Agostino is predicting that a retaliation by China on U.S. soybeans is the farmers biggest risk as export demand could fall sharply, likely in 2028, unless a revised Phase 1 trade deal or Phase 2 is signed with the U.S. China it is willing to fight any war until the end!
The low in soybean futures in 2018 was $8.12/bu.
What should a farmer's plan be for 2025 from a commodity marketing perspective?
According to Agostino, Ontario farmers had the opportunity to sell a flat price of $6.00 and $14 for corn both old and new crop bushels at the February high after the USDA January gift. But if farmers missed the opportunity, he advises they should not panic sell and look for a bounce -- another selling opportunity.
"If you missed the opportunity, wait. You will survive this. Everybody will," he says.
He says farmers should book their fertilizer as soon as possible. "If you haven't done that, that's your first. Homework."
He also advises that farmers should book their diesel fuel at $1.00/litre or less by the end of March.
"If I'm booking a lower input and then selling corn at a higher price later, I'm having my cake and eating it too," says Agostino.
Understanding that the USDA gave farmers a gift in January means farmers need to celebrate the wins, and protect their gains says Agostino.
Watch the video below to see Agostino’s complete presentation.