Chicago corn, soybean and wheat prices drop on US tariff fears

Chicago wheat, corn and soybean prices fell on Monday after U.S. President Donald Trump said he will impose punitive tariffs on U.S. metal imports, raising concern over potential retaliation against U.S. grain and oilseed exports.

The Chicago Board of Trade's most active wheat contract ZW1! lost 0.6% to $5.79-1/4 a bushel by 1022 GMT. Corn ZC1! was down 0.4% at $4.85-1/2 and soybeans ZS1! lost 0.1% to $10.47-1/2.

On Sunday Trump said he would introduce punishing new 25% tariffs on all U.S. steel and aluminium imports.

"There is fear metal exporting countries like China could retaliate by imposing tariffs on U.S. grain and soybean imports," one German trader said.

Trump's metal tariffs have caused general market weakness, said Ole Houe at IKON Commodities in Sydney.

"There were initial hopes that it may all be nothing, but it seems clear that the tariffs are here to stay and even grow," Houe said.

Trump’s earlier tariffs against China prompted a moderate response from Beijing, notably avoiding retaliation on agricultural products, which provided some relief for grain markets.

Traders await the U.S. Department of Agriculture (USDA) global supply and demand reports on Tuesday.

Soybeans were gaining some support from expectations that the USDA will cut its forecasts for U.S. and global inventories, one trader said.

In South America, improving weather in dry growing areas of Argentina, a leading exporter of soymeal and soyoil, and a larger than expected soybean harvest in leading supplier Brazil also pressured soy and corn prices.

Showers forecast in Argentina this week may offer relief for crops struggling with dry conditions.

Global wheat imports could decline this year, with slower purchases from major importers such as China.

Traders are also monitoring cold weather threatening crops in Russia and Ukraine while Russian export quotas could slow wheat shipments further.