Chicago soybean and wheat futures retreated Monday as President Trump’s social media broadside against Federal Reserve Chair Jerome Powell rattled commodity markets, reigniting concerns about central bank independence and economic stability. The political turmoil offset supportive fundamentals for grains, including strong corn demand and weather-driven planting delays.
Market Reaction
- Soybeans (CBOT July SN25): Fell 0.6% to $10.41½/bushel after hitting a late-February high overnight.
- Wheat (WN25): Dropped 1.8% to $5.52¼/bushel on risk-off sentiment.
- Corn (CN25): Held steady at $4.90/bushel, buoyed by robust export demand.
Trump vs. Powell: The Flashpoint
- Trump called Powell a “major loser” Monday, demanding immediate rate cuts despite the Fed’s stance to await inflation data from new tariffs.
- Traders fear political interference could destabilize the dollar and farm export competitiveness. “The market’s uncomfortable with this tone toward the Fed,” said ADM’s Mark Soderberg.
- Equities and commodities broadly sold off on fears Trump might attempt to oust Powell prematurely.
Underlying Market Supports
- Corn Demand: U.S. prices remain globally competitive, with Soderberg forecasting “higher exports, lower stocks.”
- Weather Snags: Forecasted Midwest rains may delay corn planting, while Northern Plains wheat progress advances.
What’s Next?
- Fed Watch: Any signal of political capitulation on rates could weaken the dollar, aiding grain exports.
- Tariff Impact: If Trump’s trade policies fuel inflation, the Fed may hold rates higher for longer—pressuring farm loans.
- Planting Pace: Corn sowing delays could shift acres to soybeans, exacerbating oversupply concerns.
Trump’s Fed Attack Rattles Grain Markets: Soybeans Slide as Rate Cut Clash Fuels Uncertainty