Good morning!
Wheat firmer, soybeans weaker and corn choppy overnight... Wheat futures firmed amid corrective buying during the overnight session, while soybeans weakened and corn chopped around unchanged. As of 6:30 a.m. CT, corn futures are trading unchanged to a penny higher, soybeans are mostly 2 cents lower, winter wheat markets are 6 to 7 cents higher and spring wheat is 2 to 3 cents higher. The U.S. dollar index is about 130 points lower and front-month crude oil future are around 35 cents higher.
Chinese tariffs on U.S. ag goods start today... Chinese tariffs against U.S. ag goods started today, however, goods already in transit will be exempt from these additional tariffs until April 12. The new Chinese tariffs affect a wide range of U.S. ag products. Specifically, they include a 15% additional tariff on chicken, wheat, corn and cotton. A 10% additional tariff applies to soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables and dairy products.
China hits Canada with ag tariffs... China announced tariffs on over $2.6 billion worth of Canadian agricultural and food products on Saturday, retaliating against levies Ottawa introduced in October. China will apply a 100% tariff to just over $1 billion of Canadian rapeseed oil, oil cakes and pea imports and a 25% duty on $1.6 billion worth of Canadian aquatic products and pork. The tariffs exclude raw canola exports. The tariffs are scheduled to take effect on March 20, match the 100% and 25% import duties Canada slapped on China-made electric vehicles and steel and aluminum products just over four months ago.
Japan seeks tariff relief amid Trump’s treaty criticism... Following President Donald Trump’s criticism of the U.S./Japan Security Treaty as “nonreciprocal,” Japan is seeking relief from upcoming 25% U.S. tariffs on steel and aluminum. Trump suggested Japan’s economic gains from the U.S. relationship could be leveraged for trade concessions. Despite this, Japan maintains “full confidence” in the U.S. upholding its security commitments and is exploring ways to strengthen the alliance, including boosting defense spending to 2% of GDP by 2027. Japan’s trade minister plans a visit to Washington to negotiate on tariffs.
Mid-Mississippi River to open for navigation today... The National Grain and Feed Association (NGFA) announced the Mid-Mississippi River will officially open for navigation at 7:00 a.m. CT today. Following NGFA Barge Freight Trading Rule 18(J), a special three-person committee declared the opening after the MV Philip M. Pfeiffer reached Dubuque, Iowa, on March 8, with a suitable empty dry cargo covered barge.
The week ahead in Washington... House Republicans on Saturday introduced a stopgap bill aiming to avert a government shutdown by midnight Friday and fund the government through Sept. 30. House Republicans are expected to take swift action on the legislation, eyeing a floor vote on the measure as soon as Tuesday, and then jam the Senate by adjourning the House and putting the onus on Senate Democrats. The plan would trim spending from the 2024 fiscal year (FY) by $13 billion, though below levels previously agreed to for FY 2025 under a bipartisan spending-limits deal struck in 2023. Key economic data this week includes the consumer price index for February on Wednesday and producer prices on Thursday. USDA’s monthly World Agricultural Supply & Demand Estimates Report will be released on Tuesday.
China’s deflationary concerns heighten in February... China’s consumer price index declined 0.7% from year-ago in February, marking the first consumer deflation since January 2024. Food prices fell 3.3%, the largest decline in 13 months amid a sharp slowdown in pork prices. China’s producer prices dropped 2.2% last month. While that marked the slowest monthly decline since August of last year, it was the 29th straight month of producer deflation.
China touts positive changes in property sector... China’s property sector is showing positive changes and market confidence is improving, its housing minister said. He noted, “Since January and February, the real estate market maintained a positive trend of stopping declines and returning to stabilization.” Signs of stabilization or even a mild rebound in the property market could help cushion China’s economy from the impact of mounting U.S. trade tariffs on Chinese goods.
Japanese gov’t panel urges vigilance on rising inflation... Private-sector members of a key Japanese government panel urged policymakers to be vigilant to the risks of rising inflation hurting the economy. The policy proposal, submitted to the Council on Economic and Fiscal Policy, comes as Japan’s headline consumer inflation rate hit 4.0% and expectations of a near-term rate hike by the central bank drove the 10-year government bond yield to its highest since October 2008. The panel also said Japan should leverage rising inflation, wages and interest rates to help rebalance economic resources such as promoting wage growth in accordance with degree of labor shortages.
Euro zone investor morale strengthens... Investor morale in the euro zone brightened substantially in March, with economic expectations hitting their highest reading since July 2021. The Sentix index improved to -2.9 in March from -12.7 the previous month. The index for current conditions improved to -21.8 from -25.5 in February. The index for expectations over the next six months rose for a third time in a row to 18.0.
USDA shifts HPAI strategy away from vaccines... USDA Secretary Brooke Rollins in an interview with Breitbart.com said USDA will no longer pursue vaccines for poultry and livestock in its highly pathogenic avian influenza (HPAI) strategy. Citing the ineffectiveness of vaccines in countries like Mexico, where vaccinated chickens continued to contract the disease, Rollins stated the focus will shift to biosecurity measures and repopulation efforts. This aligns with Health and Human Services Secretary Robert F. Kennedy Jr.’s stance against poultry vaccines. USDA’s $1 billion plan includes boosting egg imports and offering financial relief to farmers.
Cattle futures show optimism... Cattle futures surged last Friday, with the front-month April live cattle contract settling above $200.00. The surge in prices from a 2.5-month low early last week not only signals a short-term low on the daily chart but conveys trader optimism has returned after a period of heavy long liquidation since late January.
Cash hog fundamentals remain choppy... The CME lean hog index is down 28 cents to $89.90 as of March 6, as prices continue to chop around the $90.00 level. The pork cutout firmed $1.87 to $98.36 on Friday, as wholesale prices continue to hold in the upper-$90.00 range.
Weekend demand news... Exporters reported no tenders or sales.
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
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. Price Reactions after Livestock Reports — NASS