Good morning!
Grains weaker overnight... Corn, soybeans and wheat faced pressure during most of overnight trade and are near session lows this morning. As of 6:30 a.m. CT, corn and soybean futures are trading 3 to 4 cents lower, SRW wheat is 6 to 7 cents lower, HRW wheat is 11 to 12 cents lower and HRS wheat is 4 to 5 cents lower. The U.S. dollar index is around 150 points higher and front-month crude oil futures are tethered near unchanged.
U.S. tariffs pose no threat to China’s grain supply... U.S. tariffs do not threaten China’s grain supply because markets had already anticipated the Trump administration’s measures, a senior economist at the state-run National Grain and Oil Information Center said. “However, these trade policies will significantly impact global trade patterns,” Wang Liaowei said. “If the trade situation remains unchanged by this year’s U.S. soybean harvest season, it’s possible that China’s dependence on Brazilian soybeans could reach 80%.”
Record low Chinese soybean imports in Q1... China’s soybean imports during the first three months of this year are expected to total just 13.6 MMT, down 5.2 MMT from the same period last year and a record low for the quarter, an executive at Yihai Kerry Arawana Holdings Co Ltd said. However, imports are forecast to rebound to 35 MMT in the second quarter.
China’s Xi courts global CEOs amid U.S. trade tensions... Chinese President Xi Jinping Xi urged multinational corporations to play a key role in stabilizing global supply chains, which have been strained by geopolitical conflicts and trade disputes. Reaffirming China’s stance as an advocate for open markets, Xi pledged fairer treatment for foreign firms, particularly in government procurement and regulatory practices. Xi emphasized that foreign companies contribute significantly to China’s economy, citing their large share of imports, exports, industrial output, tax revenue and job creation. “The essence of China/U.S. economic and trade relations is mutually beneficial and win-win,” Xi told the executives. This meeting is the latest signal that China is doubling down on its pro-business rhetoric in hopes of reversing foreign investment trends and projecting economic resilience amid increasing international headwinds. China’s foreign direct investment plummeted 27.1% from the previous year in 2024.
India considers lowering tariffs on ag goods after U.S. demands... In a strategic move to ease trade tensions, India has offered tariff cuts on key U.S. agricultural imports as part of ongoing negotiations aimed at preventing reciprocal tariffs from the U.S. set to take effect next week. The offer came during high-level meetings in New Delhi with Brendan Lynch, Assistant U.S. Trade Representative for South and Central Asia. Bloomberg reported New Delhi is considering lower duties on pecans, pulses and non-GMO soybeans, as well as dried distilled grains soluble, citing people familiar with the situation. Cooking oil refiners say they are prepared to increase soybean oil imports from the U.S. if it is competitively priced, according to B.V. Mehta, executive director of the Solvent Extractors’ Association. Most of India’s soybean oil purchases are shipped from Argentina and Brazil. The U.S. has separately demanded India remove regulatory restrictions it imposes on imports of agricultural products, in the form of quantity or quality standards, one of the people aware of negotiations said. India is resisting tariff reductions on dairy, rice, wheat and corn, while seeking greater access for its own exports like grapes, pomegranates and rice. India is also considering a proposal to scrap an import tax on U.S. liquefied natural gas, to boost purchases and help cut the trade surplus with Washington, Reuters reported, citing four people in the government and a person in the industry familiar with the matter.
Ontario expects U.S. to soften auto tariff blow after Lutnick call... Ontario officials are cautiously optimistic the U.S. will dial back the impact of newly announced auto tariffs on Canada, following a direct call from U.S. Commerce Secretary Howard Lutnick to Premier Doug Ford, the Globe and Mail reports. A senior Ontario government source said Lutnick’s outreach signals Washington’s understanding of how deeply Canada and the U.S. are intertwined in automotive supply chains. The source added that while the tariffs likely won’t be scrapped, Canada could gain “a very significant relative advantage against the rest of the world.” The anticipated changes — expected sometime after April 2 — may hinge on how the U.S. defines American content in vehicle parts. Meanwhile, Canadian Prime Minister Mark Carney issued a firm response to Trump’s latest round of auto tariffs, pledging Canadian retaliation while warning the country must urgently reduce its economic dependence on the United States. Carney emphasized that Canada’s auto industry would be protected, alongside other critical sectors.
Agroconsult raises Brazil soybean production forecast after crop tour... Brazil is expected to produce 172.1 MMT of soybeans this year, Agroconsult forecast after a nationwide crop tour of 13 states that began in January. The new estimate is 800,000 MT higher than its previous forecast. Mato Grosso, Brazil’s top crop state, is expected to produce more than 50 MMT of soybeans for the first time, Agroconsult said. With roughly 80% of the crop yet to be harvested in Rio Grande do Sul and the far southern state battling persistent drought, Agroconsult warned production potential could decline.
Argentine farmer soybean sales the slowest in 10 years amid murky FX outlook... Argentine farmers had sold 8.4 MMT of soybeans from this year’s production as of March 19, equivalent to between 17.3% and 18.1% of the expected harvest. That marked the slowest pace since the 2014-15 season when 15.7% of the soy harvest was sold at the same time of the year. A faster devaluation of the peso has been expected ahead of a $20 billion loan deal with the International Monetary Fund. Farmers’ crops are priced in dollars, but they receive the peso equivalent, meaning a weaker peso would give them more local currency, an incentive to hold onto their crops.
French wheat conditions unchanged... France’s ag ministry rated the country’s soft wheat crop as 74% good/excellent as of March 24, unchanged from the previous week. Aside from 2024’s 66% rating, these are the worst conditions in the past five years.
Euro zone economic sentiment, consumer confidence weaken... The euro zone’s Economic Sentiment Indicator fell to 95.2 in March, the lowest level in three months. The consumer confidence indicator fell 0.9 point to -14.5, also the lowest in three months. The industry confidence indicator came in at -10.6, slightly better than -11 in February.
Bullish H&P Report... USDA estimated the U.S. hog herd at 74.512 million head as of March 1, down 179,000 head (0.2%) from year-ago, whereas traders expected a 1.2% increase. The breeding herd at 5.980 million head declined 0.6%. The market hog inventory at 68.532 million head dropped 144,000 head (0.2%). The winter pig crop declined 0.2% and producers intend to farrow slightly fewer sows during spring (-0.2%) and summer (-0.8%). Given that every category in the report was below the average pre-report estimates, the data is bullish, especially with unexpected herd contraction. Full details.
China’s sow herd modestly builds... China’s sow herd totaled 40.7 million head at the end of February, up 0.6% from year-ago, according to data from the ag ministry. Hog slaughter rose 2.8% to 59.9 million head during the first two months of this year.
Beijing lets U.S. beef export registrations lapse... China has not renewed export registrations for U.S. beef facilities that expired on March 16, though it updated registrations for pork and poultry plants, Reuters reported, citing traders and the U.S. Meat Export Federation. As a result, U.S. exporters and Chinese buyers are reluctant to strike deals for American beef produced after that date due to uncertainty about whether it will be cleared for delivery. U.S. beef export sales to China totaled just 54 MT during the week ended March 20.
Choice beef prices ease after the recent surge... Choice boxed beef prices dropped $2.58 to $335.72 on Thursday, while Select firmed $2.91 to $319.44. Recent price strength has improved beef processing margins, though they remain deep in the red, making packers reluctant to raise cash cattle prices after actively buying supplies last week.
Pork cutout drops... Pork cutout dropped 81 cents to $94.84 on Thursday, as declines in bellies, butts and picnics more than offset gains in the other cuts. After topping the $100.00 mark Tuesday morning, cutout has dropped roughly $5.00.
Overnight demand news... South Korea purchased 130,000 MT of corn to be sourced from the U.S., South America or South Africa and 55,000 MT of optional origin feed wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
- 11:00 a.m. Livestock and Meat International Trade Data — ERS
- 2:00 p.m. Dairy Products — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC