Good morning!
Grains firmer in quiet overnight trade... Corn, soybeans and wheat mildly favored the upside in a quiet overnight session ahead of USDA’s February crop reports later this morning. As of 6:30 a.m. CT, corn futures are trading fractionally to a penny higher, soybeans are 2 to 4 cents higher and wheat futures are 3 to 5 cents higher. The U.S. dollar index is modestly weaker, while front-month crude oil futures are around $1.00 higher.
Trump imposes sweeping steel and aluminum tariffs, sparking trade war risks... President Donald Trump as expected raised tariffs on steel and aluminum imports to a flat 25% without exceptions, aiming to support struggling domestic industries but escalating trade tensions worldwide. The measures, effective March 12, eliminate country-specific exemptions and extend to downstream steel and aluminum products, affecting key suppliers such as Canada, Mexico, Brazil and South Korea. The move expands Trump’s 2018 Section 232 tariffs, justifying the action on national security grounds. “It’s 25% without exceptions,” Trump emphasized, adding that reciprocal tariffs on countries taxing U.S. goods will be announced soon. Trump later said he would give “great consideration” to Australia’s request for an exemption to the steel tariffs due to its trade deficit with the United States.
USDA’s February crop reports out later this morning... Analysts expect USDA to make modest changes to its domestic usage and ending stocks forecasts in the Supply & Demand Report at 11:00 a.m. CT. Traders expect slightly smaller ending stocks of 1.526 billion bu. for corn (1.540 billion bu. in December) and 374 million bu. for soybeans (380 million bu. in December). Wheat ending stocks are expected to be 799 million bu. (798 million bu. in December). USDA’s global production and ending stocks forecasts may attract more market attention.
Cordonnier raises Brazilian soybean production forecast... South American crop consultant Dr. Michael Cordonnier raised his Brazilian soybean crop estimate 1 MMT to 171 MMT due to “surprising harvest progress in central Brazil last week and the anticipation of another good harvest week this week.” With somewhat drier weather in the forecast, he is less concerned about harvest delays and crop quality. Cordonnier left his Brazilian corn production forecast at 123 MMT, though he has a neutral to lower bias given safrinha planting delays in Mato Grosso. Cordonnier kept his Argentina production forecasts at 49 MMT for soybeans and 47 MMT for corn as weather improved last week and more rains are expected in central production regions during the next two weeks.
Brazil’s Santos port gears up for record crop exports... Brazil’s Port of Santos is preparing for a significant increase in cargo flow due to the record 2024-25 grain harvest, estimated at 322.3 MMT. Truck traffic at the port is expected to spike from the usual 3,000 trucks per day to 15,000 during peak export months of March to June, with soybeans and corn being the primary exports to around 70 countries. Public agencies, transporters and exporters are collaborating to prevent logistical bottlenecks. Industry leaders have highlighted concerns about truck congestion and weather conditions affecting exports, while port scheduling improvements aim to ease traffic. Upcoming construction projects and potential ship queues add to the complexity, underscoring the need for coordinated efforts to maintain smooth operations at Brazil’s largest export hub.
China maintains soybean, corn and cotton import forecasts... China’s ag ministry made no changes to its supply and demand tables for 2024-25 this month. The ministry continues to forecast 2024-25 imports at 9 MMT for corn (down from 23.41 MMT in 2023-24), 94.6 MMT for soybeans (down from 104.75 MMT in 2023-24) and 1.7 MMT for cotton (down from 3.25 MMT in 2023-24).
French farmers planted a little more winter wheat than initially expected... France’s ag ministry increased its estimate of winter wheat plantings to 4.57 million hectares from 4.51 million hectares in its initial projection in December. That’s 10% above 2024 and 0.4% above the five-year average though still relatively low from a historical perspective. Planting in the major Centre-Val de Loire crop region was little changed from last year due to waterlogged conditions last fall. Soggy fields in several regions could affect winter crop yields or lead to reseeding with spring crops, the ministry added.
Kazakhstan resolves grain transit issues with Russia... Kazakhstan has resolved most of its grain transit and transshipment issues with Russia, allowing grain exports to Europe and North Africa through Russia’s Baltic ports to flow unhindered, the country’s agriculture minister said. The two countries have been in a grain trade dispute since last year with both banning each other’s grain from their domestic markets. Russia allowed transit of Kazakh grain through its ports last November, but on condition the grain was loaded directly from railcars into vessels without going into temporary storage, creating logistical problems for Kazakh exporters.
U.S. resumes food aid donations after suspension left a lot of aid in limbo... The U.S. lifted a pause on food donations to the UN World Food Program (WFP), ending a suspension that had stalled 500,000 metric tons of food, according to a WFP announcement on Sunday. The food, purchased from U.S. farmers under the Food for Peace Title II program, had been in limbo due to a 90-day foreign aid review initiated by President Trump as part of his “America First” policy. Despite a waiver for emergency food assistance, Washington had instructed WFP to halt work on several U.S.-funded grants, affecting aid programs in countries like Yemen, Sudan, South Sudan, Haiti and the Central African Republic. A report from the USAID Office of Inspector General warned that the uncertainty placed $489 million worth of food assistance at risk of spoilage or diversion. With the pause now lifted, food purchases and deliveries under existing USAID agreements can resume.
DOGE cuts USDA contracts worth $9 million... The Department of Government Efficiency (DOGE), led by Elon Musk, terminated 18 USDA contracts, according to a DOGE post on X Monday. The canceled programs, totaling around $9 million, included contracts such as Central American gender assessment consultant services, Brazil forest and gender consultant services and the Women in Forest Carbon Initiative mentorship program. USDA secretary nominee Brooke Rollins praised the move on X, stating, “Our farmers and ranchers and all Americans deserve so much better… hopefully I will be there soon.”
Judge extends pause on ‘deferred resignation’ deadline... A federal judge extended the block on the Trump administration’s controversial “deferred resignation” program on Monday, just hours before the deadline for federal employees to accept the offer. U.S. District Judge George A. O’Toole Jr. is considering turning the temporary restraining order into a preliminary injunction but has yet to indicate how he will rule. The program, which offers federal employees eight months’ pay in exchange for resigning, has been challenged by unions, including the American Federation of Government Employees (AFGE), for allegedly violating the Administrative Procedure Act due to its chaotic implementation. While the Justice Department argues unions lack standing, critics warn that employees who accept the deal may lose the right to litigate their departures.
EU to simplify CAP rules... The European Commission is preparing a “simplification package” for the Common Agricultural Policy (CAP), aiming to reduce administrative burdens on farmers and national administrations. According to a draft document seen by Reuters, the proposal will be unveiled in the second quarter of 2025. A spokesperson confirmed the initiative seeks to alleviate regulatory pressure on farmers. CAP accounts for roughly one-third of the EU’s 2021-2027 budget, totaling around 387 billion euros ($399 billion) in payments for farmers and rural development.
Packers continue to slow cattle slaughter runs... This week’s cattle slaughter is expected to slow even more from last week’s estimated 584,000 head tally, as beef plants continue to control throughput amid tight supplies and poor margins. High carcass weights are helping make up for some of the reduced numbers.
Pork cutout jumps to three-month high... Pork cutout firmed $2.62 to $99.62 on Monday behind strong gains in all cuts except butts – the highest level since Nov. 11. Surging wholesale values have kept packer margins in the black despite rising cash hog prices.
Overnight demand news... South Korea purchased 30,000 MT of U.S. milling wheat and 50,000 MT to 60,000 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. Crop Production — NASS
- 11:00 a.m. World Agricultural Supply and Demand Estimates Reports (WASDE) — WAOB
- 11:00 a.m. Cotton Ginnings — NASS
- 11:15 a.m. Cotton: World Markets and Trade — FAS
- 11:15 a.m. Grains: World Markets and Trade — FAS
- 11:15 a.m. Oilseeds: World Markets and Trade — FAS
- 11:15 a.m. World Agricultural Production — FAS