Good morning!
Corn and wheat weaker, beans firmer this morning... Corn and wheat futures faced pressure coming out of the extended holiday weekend, while soybeans mildly favored the upside. As of 6:30 a.m. CT, corn futures are trading 3 to 4 cents lower, soybeans are fractionally to 2 cents higher, winter wheat markets are 10 to 12 cents lower and spring wheat is mostly 6 cents lower. The U.S. dollar index is around 290 points higher and front-month crude oil futures are modestly lower.
Wet conditions continue across southern U.S. crop areas... Widespread rains fell from the Southern Plains through the lower Midwest and Delta over the holiday weekend, with more in the forecast through the middle of this week. Saturated soils will keep planting slow in these areas. Central and northern areas of the Corn Belt will also receive some early week rains.
Trump delays 50% tariffs on EU as fast-track negotiations begin... President Donald Trump announced on Sunday the U.S. will delay proposed 50% tariffs on goods imported from the European Union until July 9 following a phone call with European Commission President Ursula von der Leyen, who requested more time to reach a trade agreement. Trump had previously threatened to impose the steep tariffs starting June 1. The EU said it agreed to “fast track negotiations” with the U.S. to avoid a trade war. Despite the improved tone, serious challenges remain. The Trump administration is pressing for broad concessions from Brussels to reduce a goods trade deficit near $200 billion, including removing EU value-added taxes, food regulations affecting U.S. ag exports and digital services taxes targeting U.S. tech firms. Many of these fall outside of the EU Commission’s direct authority, further complicating negotiations.
India’s dairy sector pushes back in U.S. trade talks... India’s dairy industry is urging the government to shield it from liberalization pressures in ongoing trade negotiations with the U.S., warning that allowing American dairy imports could devastate millions of small-scale farmers, Reuters reports. India is in talks with Washington on a comprehensive bilateral trade agreement after the U.S. imposed — and then paused — reciprocal tariffs, including a 26% duty on Indian exports. One key sticking point: the U.S. dairy industry’s push to open India’s heavily protected dairy market, which is currently safeguarded by steep import tariffs and non-tariff barriers.
Cordonnier lowers Argentine soybean production estimate... Recent flooding in northern Buenos Aires resulted in significant crop losses, especially for soybeans. As a result, South American crop consultant Dr. Michael Cordonnier lowered his Argentine soybean production estimate by 1.5 MMT to 48.5 MMT. Most of the corn in Buenos Aires was harvested before the flooding, so he left his Argentine corn crop estimate at 50 MMT, though he now has a neutral to lower bias. Cordonnier kept his Brazilian production estimates at 169 MMT for soybeans and 129 MMT for corn.
Rainfall will help ease drought in some of China’s winter wheat areas... Rainfall through next Tuesday is expected to ease drought conditions in key wheat-growing provinces like Henan and Shaanxi, according to China’s National Meteorological Center. However, World Weather says weather models have mostly removed rain chances for the North China Plain and Yellow River Basin.
India still expecting above-average monsoon rains... The India Meteorological Department maintained its forecast calling for above-average rainfall during the monsoon season. Rainfall from June through September is expected to be 106% of the long-term average.
Japan starts direct sales of gov’t rice stocks... Japan began selling government rice stockpiles through direct contracts, targeting a level of around 2,000 yen ($14) per 5 kilograms by early June. The plan to release 300,000 MT of rice bypasses the auction system, under which farming cooperatives purchased most of the previously released stock, limiting the government’s ability to influence prices. The rice, harvested in 2021 and 2022, will be sold at an average pretax price of 10,700 yen per 60 kilograms, with the government covering transportation costs to regional areas. Online sales are also being considered to widen distribution. Japan’s ag ministry also established a special response team of 500 members nationwide tasked with handling high rice price issues.
The week ahead in Washington... Congress is out this week, though Senate discussions about its changes to the House-passed reconciliation package will continue. With Congress on recess, there will be even more focus on President Trump’s trade policy. Talks are ongoing with various countries, including China, EU, Switzerland, India, Japan, South Korea, Vietnam and Thailand, with some making progress and others facing challenges. Talks also continue with the UK to expand on a framework trade accord previously announced. Key economic data includes the Fed’s minutes from the last monetary policy meeting on Wednesday, the second estimate of first quarter GDP on Thursday and Friday’s personal consumption expenditures price index, the Fed’s preferred inflation gauge. USDA will update its ag trade outlook on Thursday.
China’s industrial profits increase in April... China’s industrial profits rose 3% from year-ago in April. Industrial profits rose 1.4% annually during the first four months of the year. Profits at private sector companies and foreign firms grew 4.3% and 2.5%, respectively, while state-owned firms declined 4.4% during the January to April period.
EU economic sentiment improves for first time in three months... The economic sentiment indicator in the euro zone increased to 94.8 in May, the first rise in three months. Improvements were seen in industrials, retailers, constructors and consumers. However, services confidence weakened to a four-year low. Consumer inflation expectations declined to 23.6 from 29.4, which was the highest level since November 2022. Manufacturers’ selling price expectations fell to 7.9 from 10.6.
Japan to consider trimming super-long bond issuance... Japan will consider trimming issuance of super-long bonds in the wake of recent sharp rises in yields for the notes, two sources told Reuters, as policymakers seek to soothe market concerns about worsening government finances. The ministry of finance will consider tweaking the composition of its bond program for the current fiscal year, which could involve cuts to its super-long bond issuance, said the sources who had direct knowledge of the plan. A decision will come after discussions with market participants around mid- to late-June, the sources said.
Neutral Cattle on Feed Report... USDA estimated there were 11.376 million head of cattle in large feedlots (1,000-plus head) as of May 1, down 178,000 head (1.5%) from year-ago. April placements declined 2.6%, while marketings dropped 2.5%. The report data is fully neutral and should have no impact on price action, especially after an extended holiday weekend.
Mildly negative Cold Storage data... USDA estimated there were 893.6 million lbs. of red meat in frozen storage as of April 30, up 39.5 million lbs. from March but 56.0 million lbs. less than last year. Beef stocks totaled 418.1 million lbs., down 7.0 million lbs. from March, which was less than the five-year average decline of 16.5 million lbs. during the month. Still, beef inventories declined 8.2 million lbs. (1.9%) from last year and 52.1 million lbs. (11.1%) from the five-year average. Pork stocks totaled 455.8 million lbs., up 46.3 million lbs. from March. That was more than double the five-year average increase of 21.7 million lbs., though some of that was due to a 12.8-million-lb. downward revision to March stocks. Still, pork stocks declined 43.5 million lbs. (8.7%) from April 2024 and 92.5 million lbs. (16.9%) from the five-year average.
Holiday weekend demand news... Iran tendered to buy up to 120,000 MT each of corn, soymeal and feed barley.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 3:00 pm Crop Progress — NASS