Good morning!
Grains solidly higher overnight... Corn, soybeans and wheat built on Thursday’s gains during the overnight session and are trading near their session highs early this morning. As of 6:30 a.m. CT, corn futures are trading mostly 4 cents higher, soybeans are 6 to 9 cents higher and wheat futures are 10 to 12 cents higher. The U.S. dollar index is around 330 points lower and front-month crude oil futures are about 50 cents higher.
Presidents Day schedule... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, Feb. 17, for Presidents Day. As a result, there will be no Pro Farmer updates on Monday. Grain markets reopen with the overnight session at 7:00 p.m. CT on Monday. Livestock markets resume trading at 8:30 a.m. CT on Tuesday, Feb. 18.
Initial U.S. trade policy targets... A fact sheet (link) from the White House outlined examples of trade policies and actions by other countries that would be targeted via the reciprocal tariff action. A few examples: Brazil: “The U.S. tariff on ethanol is a mere 2.5%. Yet Brazil charges the U.S. ethanol exports a tariff of 18%. As a result, in 2024, the U.S. imported over $200 million in ethanol from Brazil while the U.S. exported only $52 million in ethanol to Brazil.” India: The U.S. has Most Favored Nation (MFN) tariffs on agricultural goods that average 5%, but India has an applied MFN tariff of 39%. The fact sheet also cited motorcycles from India as a case where they charge at 100% tariff while the US level is 2.4%. EU: The European Union was noted for its tariffs on U.S. shellfish, cars and other goods. Bottom line: “A 2019 report found that across 132 countries and more than 600,000 product lines, United States exporters face higher tariffs more than two-thirds of the time,” the release noted.
Brazil says U.S. ethanol tariffs would be unreasonable, calls for sugar duty removal... Brazil’s Energy and Mining Minister Alexandre Silveira said a potential U.S. tariff on Brazilian ethanol would be unreasonable, emphasizing the two countries have historically negotiated ethanol and sugar trade together. His remarks came after President Donald Trump moved to scrap decades-old low tariff rates, raising them to match those of other countries. Silveira argued that for Trump’s plan to be fair and reciprocal, the U.S. would need to eliminate import tariffs on Brazilian sugar.
China to develop gene-editing tools, new crop varieties in biotech initiative... China issued guidelines to promote biotech cultivation, focusing on gene-editing tools and developing new wheat, corn, and soybean varieties, as part of efforts to ensure food security and boost agriculture technology. The 2024-2028 plan aims to achieve “independent and controllable” seed sources for key crops, with a focus to cultivate high-yield, multi-resistant wheat, corn and high-oil, high-yield soybean and rapeseed varieties. The document pledged to research and develop precision gene-editing tools with independent intellectual property and enhance key cultivation technologies. Additionally, efforts will be made to breed high-performance livestock, including pigs with strong reproductive capacity and high feed conversion rate and disease-resistant broiler chickens.
French wheat conditions up from year-ago but below average... France’s ag ministry rated 73% of the country’s winter wheat crop as good/excellent as of Feb. 10, up five percentage points from last year, which was a four-year low. French crops have been hurt by heavy rain that delayed plantings and hampered early growth, raising concern about a repeat of last year’s harvest that was the smallest since the 1980s.
Western Australia’s wheat harvest bigger than expected... The Grain Industry Association of Western Australia (GIWA) said the state’s wheat production was approximately 1.6 MMT than its December forecast. Western Australia produced 12.45 MMT of wheat, GIWA said in its final report of the 2024-25 growing season. GIWA attributed the high production to a warm winter, effective farm management, and a decline in sheep numbers, which have freed up more land for cropping. Yields in other Australian states also exceeded expectations, leading analysts to raise their national production estimates to between 32 MMT and 35.5 MMT.
Japan to sell rice stockpiles to ease prices... Japan will release up to 210,000 MT of rice from reserve stocks to ease surging prices amid a distribution bottleneck, the ag ministry said. The government plans to initially open bidding on 150,000 MT of rice next month and any subsequent bidding will depend on the distribution situation, the ministry said. This would be the first time rice stockpiles have been released to bring down prices and ease distribution bottlenecks. Until now, the release of stockpiles has been limited to cases of severe or consecutive poor harvests and natural disasters.
Indonesia expects to reach full implementation of B40 biodiesel in March... Indonesia expects its B40 biodiesel program will reach full implementation next month after delays at the start of the year, energy ministry official Eniya Listiani Dewi said. Indonesia had planned to launch the mandatory B40 mix, containing 40% of palm oil fuel, on Jan. 1 but faced some delays due to regulatory issues, so fuel distributors were given until the end of February as a transition period.
China’s January bank lending posts record... Chinese banks extended a record 5.13 trillion yuan ($706.40 billion) in new loans in January, more than quadrupling the December figure, data from the People’s Bank of China showed. Household loans, including mortgages, rose to 443.8 billion yuan in January from 350 billion yuan in December, while corporate loans jumped to 4.78 trillion yuan from 490 billion yuan, central bank data showed. Chinese lenders tend to front-load loans to secure high-quality customers and expand their market share at the beginning of the year. The value of outstanding yuan loans in China increased 7.5% from year-ago in January, the least since at least 1998. Total social financing in China, which is a broad measure of credit and liquidity in the economy, surged to a record 7.06 trillion yuan in January.
U.S. HPAI response disrupted in early weeks of Trump administration... The Trump administration has disrupted the U.S. response to the highly pathogenic avian influenza (HPAI) outbreak, leading to confusion and concern among federal staff, state officials, veterinarians and health experts, multiple sources told Reuters. Since Trump took office on Jan. 20, two federal agencies responsible for monitoring and responding to the epidemic have withheld HPAI reports and canceled congressional briefings and meetings with state health officials, the sources said. Trump’s decision to withdraw the U.S. from the World Health Organization has also hampered information sharing that enables officials to track outbreaks and strains of the virus in other countries, three sources said. The Trump administration is working on a plan to address the HPAI issue, White House National Economic Council Director Kevin Hassett said Wednesday in an interview on CNN. “Very soon everyone is going to see a plan to get ahead of this thing,” he said.
HPAI detected in NW Iowa commercial turkey flock... The Iowa Department of Agriculture and USDA detected a case of H5N1 HPAI in a commercial turkey flock in Buena Vista County, Iowa. This is Iowa’s third detection of H5N1 HPAI within domestic birds in 2025.
Choice beef continues to fall, packer margins fall deeper into the red... Choice boxed beef weakened another $1.86 to $317.40 on Thursday, while Select firmed 70 cents to $309.84. Cash cattle prices have pulled back from their recent historic levels, but the drop in wholesale beef prices has been even more aggressive, driving already poor packer margins deeper into the red.
Cash hog index gaining steam... The CME lean hog index is up another 98 cents to $88.06 as of Feb. 12, marking the biggest daily gain in the seasonal climb for a second straight day. The index is $7.63 off the seasonal low on Jan. 9 and at the highest level since Nov. 18. February lean hog futures, which expire today and are settled against the index on Feb. 19, finished Thursday $1.315 above today’s quote. April hogs finished yesterday at a $5.04 premium to the index.
Overnight demand news... South Korea purchased 60,000 MT of soymeal expected to be sourced from the U.S., South America or China.
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
- 2:00 p.m. Farm Numbers and Livestock Operations — NASS
- 2:00 p.m. North American Potatoes — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Potato Stocks — NASS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:30 p.m. Commitments of Traders — CFTC