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Aug 12, 2020POLICYUS

Analysis: Skyrocketing US subsidies will far exceed WTO limits

An analysis by Joe Glauber estimates US trade-distorting farm subsidies will reach about $32.7 billion for 2019, above the $19.1 billion WTO limit. He projects the total could exceed $40 billion in 2020 depending on additional coronavirus aid.

WHY IT MATTERS

Subsidy levels above WTO limits could invite legal challenges from trading partners and raise trade-policy risk for US farm exports. Continued heavy support also supports US production, which is mildly bearish for grain and oilseed prices.

AFFECTSCorn Soybeans Wheat (SRW)

SOURCE
agri-pulse.comPhilip BrasherAug 12, 2020

Price reaction & history

Cornno directional readSO FAR1d +0.6%5d +3.8%20d +8.3%

After 1,623 past policy events, Corn moved a median +0.1% over 5 sessions (51% higher; middle half -1.4% to +1.5%), and +0.4% over 20.

Jan 28, 2019Farm subsidies to leap on $9.8 billion in trade aid | 2019-01-28 | Agri-Pulse | Agri-Pulse Communications, Inc.+0.7%
Jun 16, 2023Payment limits to be reconsidered in Farm Bill | Agri-Pulse Communications, Inc.+2.2%
Nov 30, 2016Farm bill wheels starting to turn | Agri-Pulse Communications, Inc.+4.0%
Nov 2, 2020China fills grain quotas as the US weighs WTO compliance | 2020-11-02 | Agri-Pulse Communications, Inc.+0.5%
Oct 3, 2018Farm bill expiration impact varies | 2018-10-02 | Agri-Pulse | Agri-Pulse Communications, Inc.-1.7%

Soybeansno directional readSO FAR1d +1.4%5d +3.9%20d +11.6%

After 1,905 past policy events, Soybeans moved a median +0.1% over 5 sessions (52% higher; middle half -1.4% to +1.8%), and +0.2% over 20.

Jan 28, 2019Farm subsidies to leap on $9.8 billion in trade aid | 2019-01-28 | Agri-Pulse | Agri-Pulse Communications, Inc.-0.8%
Jun 16, 2023Payment limits to be reconsidered in Farm Bill | Agri-Pulse Communications, Inc.+4.6%
Nov 30, 2016Farm bill wheels starting to turn | Agri-Pulse Communications, Inc.+0.5%
Oct 3, 2018Farm bill expiration impact varies | 2018-10-02 | Agri-Pulse | Agri-Pulse Communications, Inc.-0.3%
Apr 29, 2022Senate Ag launches farm bill hearings | 2022-04-29 | Agri-Pulse Communications, Inc.-1.6%

Wheat (SRW)no directional readSO FAR1d -0.1%5d +0.4%20d +11.3%

After 1,019 past policy events, Wheat (SRW) moved a median -0.1% over 5 sessions (49% higher; middle half -1.7% to +1.5%), and +0.2% over 20.

Jun 16, 2023Payment limits to be reconsidered in Farm Bill | Agri-Pulse Communications, Inc.+3.5%
Nov 30, 2016Farm bill wheels starting to turn | Agri-Pulse Communications, Inc.+3.7%
Nov 2, 2020China fills grain quotas as the US weighs WTO compliance | 2020-11-02 | Agri-Pulse Communications, Inc.-1.8%
Oct 3, 2018Farm bill expiration impact varies | 2018-10-02 | Agri-Pulse | Agri-Pulse Communications, Inc.-2.7%
Aug 4, 2021Push for conservation funding raises farm bill questions | 2021-08-03 | Agri-Pulse Communications, Inc.-2.7%

Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.

Corn CORN · GP ▸

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Soybeans SOY · GP ▸

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