Tidbits, Tariffs Pause, Docking Fees for China, Broilers & Ethanol 4/10/25

Wright Team
Apr 10
5 min read

Highlights

China has responded to Donald Trump's trade tariffs by raising duties on U.S. goods by from 34% to 84% and by appealing to the World Trade Organization. The statement said reciprocal duties are not a cure for the trade imbalance. Instead, it will backfire, hurting the U.S. itself.

Early yesterday afternoon, President Trump postponed all tariffs on all countries for 90 days except China, which he even increased China’s tariffs from 104% to 125% and issued the following statement:

“In view of China’s disrespect for global markets, I am raising the tariffs the United States levies on China to 125%, effective immediately. At some point, hopefully, in the near future, China will realize that fleecing the United States and other countries is no longer acceptable. Conversely, based on the fact that more than 75 countries have asked U.S. representatives, including the Departments of Commerce, Treasury, and USTR, to negotiate a resolution to the issues at hand regarding trade, trade barriers, tariffs, currency manipulation, and non-monetary tariffs, and that these countries have, at my urging, taken no retaliatory action against the United States, I have authorized a 90-day pause and a substantial 10% reduction in the reciprocal tariff during that period, also effective immediately. Thank you for your attention to this matter! “

The 10-year U.S. Treasury bond yields are rising as China sells some of its $768 billion U.S. Treasury debt instruments to defend (support the value) of its currency, which has weakened to its 2007 level of 7.35 yuan per dollar. The yuan will continue to weaken as China’s export revenues fall and confidence in China’s ability to weather this trade war continues to fade.

15% of Chinese exports goes to the U.S., losing most of it would hurt the economy, but it won’t be a fatal blow. According to the officials, Russia lost about 14% of its exports during the war years under countless sanctions and its economy did not collapse.

China is expected to import about 3 million mts of U.S. soybeans in April-May, despite new higher tariffs that threaten to disrupt this key import. Most of these shipments were purchased by the state stockpiler Sinograin, which is likely to pay the increased duties but may need to sell the beans at a discount due to competition from cheaper Brazilian soybeans. A Singapore-based trader indicated that while no cancellations are anticipated since these purchases are from a government entity, Sinograin will have to absorb the tariff cost, as selling U.S. soybeans with the added duty is not feasible.

The U.S. President signed an executive order on Wednesday aimed at reviving U.S. shipbuilding and reducing China's dominance. The order directs the U.S. Trade Representative to move ahead with a proposal that included levying million-dollar U.S. port docking fees on any Chinese-built or Chinese-flagged vessels. Allies will be pushed to act similarly. That proposal earlier sparked sharp criticism from commodities exporters, trade groups and U.S. ship operators, who warned of supply chain disruptions, job losses in port cities and inflation. The order must be finalized by an April 17 deadline.

U.S. Trade Representative Jamieson Greer on Wednesday said USTR should have a final decision on remedies by the middle of the month and repeated his comments from Tuesday, saying that not all of the measures outlined by the agency's original proposal would be implemented.

Tidbits

Yesterday morning, the USDA announced the sale of 198,000 mts of old crop soybeans to unknown.

U.S. crude oil stocks increased by 2.6 million to 442.3 million barrels in the week ending April 4, according to the Energy Information Administration (EIA). Higher imports were coupled with lower exports. Gasoline and distillate inventories decreased.

Argentina's soybean planted area is projected to decrease by 1 million hectares to 16.5 million hectares in the 2025/26 marketing year, according to the USDA’s Foreign Agricultural Service (FAS). This reduction is attributed to producers returning to traditional corn rotations following a pest-driven increase in soybean planting the previous year. Despite the decline in planted area, soybean production is expected to remain stable at 49.5 million mts due to an increase in yields. However, rising production costs are anticipated to result in thin or negative margins for many farmers, especially those farming on rented land, which accounts for over 75% of Argentina's soybean output. With soybean ending stocks at a six-year high, the FAS projects exports to rise by 17% up to 6 million mts.

Russian winter crops mortality was within 3% on average, despite abnormal weather conditions this winter, thawing and ice crust formation, according to the results of recent crop surveys.

Broilers & Ethanol Update

Last week:

Broiler egg set was up 1% than the same week a year ago.

Broiler egg hatch was down slightly than the same week a year ago.

Average daily ethanol production:

1,021,000 barrels last week.

1,063,000 barrels the previous week.

1,056,000 barrels the same week a year ago.

959,000 barrels the same week two years ago.

Ethanol inventory was 27.034 million barrels compared to 26.612 million barrels the previous week.

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Market Data

Prices are as of 3:00 AM ET:

Crude oil is at $62.00, down $0.35

The dollar index is at 102.68, down 0.22

July palm oil is at 4,126 MYR, up 65. The contract high was made November, 11th 2024 at 4,576 MYR. Palm oil owns 61% and soybean oil owns 14% world market share.

July cotton is at $67.36, up $0.05 per cwt. The contract high was made April, 3rd 2024 at $85.63 per cwt. Cotton competes with soybeans and corn for acres.

July natural gas is at $4.022, down 0.085. The contract high was made March, 10th 2025 at $5.233. Natural gas is the primary cost to manufacture nitrogen fertilizer.

July ULSD is at $2.0531 per gallon, down 0.0048. The contract high was made January, 23rd 2023 at $2.6729. ULSD stands for Ultra Low Sulfur Diesel.

June Dow Futures is at 40,702, down 134. The contract high was made December, 4th 2024 at 46,057.