Tractor-maker Deere blames trade war for simmering yearly outlook

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Tractor-maker Deere blames trade war for simmering yearly outlook

On Friday, the 17th of May 2019, the American tractor maker, Deere & Co. had missed its quarterly estimates for fifth straight quarters in a row and slashed its full-year outlook, as a further escalation of US-China trade war had been threatening the firm’s demand and ability to generate profit in a near-term outlook.

Once cherished for its trademark green tractors alongside harvesting combines, shares of Deere had fallen as much as 6 percent on Friday’s (May 17th) intra-day trading to $137.18, as a drop of demands of its big agricultural machines had forced the company to slash production by 20 percent.

Addressing overwhelming concerns about demands of US soybean in a near-term outlook amid an exacerbating trade war, export-market access and a delayed planting season, Deere’s Chief Executive Officer, Samuel Allen said at a statement, “Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases”.

Apart from that, US Soybean future price had been plunged to its lowest level in more than a decade earlier this week, after China had unveiled retaliatory tariffs on $60 billion worth of US imports including agriculture, while multiple analysts had been quoted saying that US agricultural sector would likely to languish further, given the extent of escalation of Sino-US trade war and EU’s reluctance on purchasing US agricultural goods.