Temporarily-Stored Corn Was Officially Auctioned on May 23rd, and Corn Market Prices Would Show the Increasing Trend

By CnAgri 2019-05-23 10:25:45 Print Tel:861064402118-822 Email: chen.wang@boabc.com

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Influence on Domestic Corn Market

On May 10th, the U.S. announced that the import tariffs with $200 billion worth of commodity from China would increase to 25% from 10%. On May 13rd, China announced that it would raise tariffs on $60 billion in U.S. goods, with the rates of 25%, 20% and 10%. However, this round of additional tariffs on U.S. goods would bring relatively limited influence on corn market. The main reasons are as follows:     
(1) The products related to corn market and to additional taxes mainly include starch products, citric acid and undenatured ethyl alcohol. However in fact, the imports of products mentioned above are extremely small. Citric acid and corn starch still are mainly exported. Additional taxes won’t bring obvious influence on trade pattern.      
(2) The products such as corn, sorghum, fuel ethanol and DDGS have relatively great influence on corn market. However, the tariffs of corn and sorghum have been raised to 25% since last year; Chinese anti-dumping and anti-subsidy taxes on U.S. DDGS still are being imposed; import tariffs of fuel ethanol with biggest import potential increased to 30% in 2017 from 5% in 2016. Since April 2nd 2018, the additional tariffs of modified ethanol from the U.S. have ranged at 15%-45%. Sine July 6th, 2018, the tariffs of modified ethanol from the U.S. have increased to 25%-70% again.      
So, the aggravating of China-U.S. trade frictions won’t bring great influence on corn market. Instead, whether China-U.S. Negotiations make significant progress or whether the additional tariffs of corn, sorghum, DDGS and fuel ethanol are canceled would be influential factors on market. 
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