One of the unique aspects that President Donald Trump has brought to political information dispersion is his prolific use of social media—primarily Twitter—to communicate news and his personal thoughts about domestic and global happenings. You may have also heard that President Trump’s tweets may affect markets and could potentially be used as investment tools. And, entrepreneurs have already developed tools that will automatically trading trigger algorithms based on a President Trump tweet or will send automatic notifications to traders when a new tweet is posted.
Having read about some of these tools, I became curious whether the president’s tweets might similarly affect agricultural commodity markets and prices. I’ve seen and read at least some concern that this could be the case (here’s an example), but I wanted to put some data together to see whether there was any teeth to the argument.
The figure below overlays corn and hard red winter wheat March 2017 futures contract prices with instances of “pertinent” tweets associated with the @realDonaldTrump Twitter account. A few notes about my decisions for choosing the data. First, I chose the period between November 8, 2016 (election day) and January 23, 2017 (when I’m writing this post), because this is the period when Trump’s tweets may have had the most impact (it seemed unlikely that his tweets would be as influential before he was elected to office as they would be after election day). Second, I focused and selected only tweets that related to trade policy or foreign relations. Because there were no tweets that directly related to agricultural markets, the next most plausibly influential posts seemed to be those that could impact agricultural trade markets. You can read the partial tweets by hovering over the green lines in the figure below.
Chart notes: Futures price data represent settlement prices for hard red winter wheat and corn futures contracts traded on the CME Group’s platforms. Twitter posts are associated with the username “@realDonaldTrump”.
| Next business day price change | |||
| Date | KCBT futures | Corn futures | Event / Tweet text |
| 11/8/16 | -7.25 | -13.5 | Election Day, Trump is elected president |
| 11/18/16 | 0.75 | 4.25 | “Just got a call from my friend Bill Ford, Chairman of Ford, who advised me that he will be keeping the Lincoln plant in Kentucky – no Mexico” |
| 11/22/16 | -1 | -0.25 | “Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States. He would do a great job!” |
| 12/5/16 | -3.25 | 1.5 | “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into..” |
| 12/13/16 | 1.25 | -4.5 | “I have chosen one of the truly great business leaders of the world, Rex Tillerson, Chairman and CEO of ExxonMobil, to be Secretary of State.” |
| 12/19/16 | -1.25 | -3 | “China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unprecedented act.” |
| 1/3/17 | 12.5 | 4 | “General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A.or pay big border tax!” |
| 1/4/17 | 8 | 1.5 | “Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow” |
| 1/5/17 | -1 | -3.25 | “Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax.” |
| 1/6/17 | 5 | 2 | “The dishonest media does not report that any money spent on building the Great Wall (for sake of speed), will be paid back by Mexico later!” |
| 1/9/17 | -0.25 | -1.75 | “I look very much forward to meeting Prime Minister Theresa May in Washington in the Spring. Britain, a longtime U.S. ally, is very special!” |
| 1/20/17 | -1.55 | Inauguration Day | |
