Good morning!
Followthrough selling in grains overnight... Corn, soybeans and wheat extended Monday’s losses during the overnight session. As of 6:30 a.m. CT, corn futures are trading 4 to 5 cents lower, soybeans are 1 to 2 cents lower, SRW wheat futures are 7 to 9 cents lower, HRW wheat is around a nickel lower and HRS wheat is 1 to 2 cents lower. The U.S. dollar index is down around 180 points and front-month crude oil futures are about 30 cents lower.
Sheinbaum pushes for USMCA deal as tariff deadline nears... Mexican President Claudia Sheinbaum reaffirmed her commitment to securing a deal with the U.S. to prevent the imposition of 25% tariffs on Mexican exports, set to take effect on March 4. She emphasized Mexico’s dedication to addressing the U.S. fentanyl crisis and maintaining strong trade relations under the U.S.-Mexico-Canada Agreement (USMCA). Sheinbaum also noted that Mexico is considering additional tariffs on imports from countries without free trade agreements, particularly China. Economy Minister Marcelo Ebrard remains in Washington for negotiations, as Sheinbaum expressed willingness to speak directly with President Donald Trump if necessary. As we reported in “Evening Report” on Monday, Trump said his planned 25% tariffs on all Mexican and Canadian exports to the U.S. “are going ahead on time, on schedule.”
USTR seeks public input on unfair trade practices under Trump order... The Office of the U.S. Trade Representative (USTR) is calling for public comments by March 11 regarding unfair trade practices and non-reciprocal trade arrangements, in line with President Trump’s America First Trade Policy and a recent Presidential Memorandum on Reciprocal Trade and Tariffs. The agency seeks details on specific foreign policies, measures or barriers that harm U.S. industries, urging respondents to quantify economic impacts. The focus is on G20 nations and major U.S. trade deficit partners, including China, the EU, Mexico and Japan. USTR also noted it may act before the comment deadline if necessary.
Cordonnier lowers Brazilian soybean production forecast... Rainfall last week favored south-central regions of Brazil while dryness remained across much of far southern areas. As a result, South American crop consultant Dr. Michael Cordonnier lowered his Brazilian soybean production estimate 1 MMT to 170 MMT and he has a neutral to slightly lower bias toward the crop. Cordonnier kept his Brazilian corn production forecast at 123 MMT, noting some safrinha corn is going to be planted after the ideal window, though not nearly as much as feared several weeks ago. For Argentina, Cordonnier noted recent rains and more forecast for this week will benefit crops. Therefore, he left his Argentine crop forecasts at 48 MMT for soybeans and 46 MMT for corn with a neutral bias toward both.
Rains a ‘turning point’ for Argentine crops... Recent heavy rainfall across much of Argentina’s heartland is likely to continue over the next few days and mark an “turning point” for soybean and corn crops, the Rosario Grain Exchange said. More than 100 millimeters (3.9 inches) of rain soaked farmland over the last few days, providing relief from drought conditions. The exchange didn’t issue new production forecasts, which it previously pegged at 47.5 MMT for soybeans and 46 MMT for corn.
Argentina loosens transit safety regulations on major grains river... Argentina loosened safety regulations on shipments traveling on the Parana-Paraguay waterway, which is a key grains transport corridor. That could boost cargo moved through the waterway by up to 7%, the nation’s security minister said, as ships traveling along the waterway will be able to carry more cargo. The head of Argentina’s CIARA-CEC grains export chamber said the measure would have “concrete impacts” on loading and navigation of grains. The Rosario Grain Exchange called the tweak in regulations “important progress” toward improving efficiency for ag exports.
API backs national E15 policy amid infrastructure concerns... The American Petroleum Institute (API) has expressed support for a national policy allowing the sale of E15 fuel year-round, arguing that a federal approach would prevent a patchwork of state regulations. API pointed to the Trump administration’s decision permitting year-round E15 sales in eight Midwest states as a sign that congressional action is needed. However, the American Fuel and Petrochemical Manufacturers warned of potential fuel supply disruptions and higher gasoline costs, urging state governors to delay implementation. EPA is considering granting states a one-year extension to address infrastructure challenges.
USDA reports decline in egg production, signs of recovery ahead... USDA reported a 4.2% annual decline in U.S. egg production in January, with table egg production down 4.8%. The decline was largely due to a 3.8% reduction in laying hens that was impacted by the ongoing highly pathogenic avian influenza (HPAI) outbreak. However, signs of recovery are emerging: Egg-type chick hatching rose 5.9%, and incubation numbers increased 6.6%. Meanwhile, broiler production is growing, with a 3.0% rise in broiler chick hatching.
FDA delays ‘healthy’ food rule implementation... The Food and Drug Administration (FDA) postponed the effective date of its final rule on defining the term “healthy” in food labeling, moving it from Feb. 25 to April 28. Despite the delay, the compliance date remains Feb. 25, 2028. The decision aligns with a Trump administration order to pause pending regulations for further review. While the rule may still be revised, potential changes could align with Health and Human Services Secretary Robert F. Kennedy Jr.’s Make America Health Again initiative.
China central bank adviser says exports to U.S. may fall sharply... China’s exports to the U.S. may fall sharply as President Donald Trump’s tariff hikes will hit bilateral trade, Wang Yiming, a policy adviser to the People’s Bank of China said. Changes in the external environment will increase pressures to expanding domestic demand this year, Wang said, adding it will be difficult for emerging industries, such as new energy vehicles and lithium batteries, to fill the demand gap caused by the property sector.
China’s new home prices decline at slower rate in January... China’s new home prices in 70 cities declined 5.0% from year-ago in January, marking the smallest decline since last July, amid Beijing’s ongoing efforts to curb the prolonged property downturn. While the pace of declines has slowed, January marked the 19th consecutive month of decreases, with prices continuing to fall in Beijing, Guangzhou, Shenzhen, Tianjin and Chongqing, while prices increased at a steeper rate in Shanghai.
House budget vote looms... House Speaker Mike Johnson (R-La.) is facing intense pressure from all sides ahead of today’s crucial House vote on the GOP’s multi-trillion-dollar budget resolution. With a razor-thin majority, Johnson must navigate conservative demands for deeper spending cuts, moderate concerns about entitlement reductions and Senate Republicans pushing for permanent tax cuts. Key sticking points include a $4.5 trillion tax cut package, over $1.5 trillion in spending reductions and the looming March 14 government funding deadline. While some moderates are falling in line, conservative rebels like Rep. Thomas Massie (Ky.) and Rep. Warren Davidson (Ohio) are holding firm in opposition, complicating Johnson’s path to passage. Meanwhile, Senate GOP leaders Steve Daines and Mike Crapo met with President Trump to advocate for making the 2017 tax cuts permanent — an issue not accounted for in the House plan. As Johnson scrambles for votes, today’s attendance could determine whether the resolution survives or crumbles under internal GOP divisions.
Beef packer margins remain highly negative... The average cash cattle price fell $3.27 to $199.64 last week, the third straight weekly decline and the first time since the week ended Jan. 3 the price has been below $200.00. Wholesale beef priced firmed $2.96 to $313.73 for Choicer and $1.41 to $303.97 for Select on Monday. Despite the lower cash prices and firmer wholesale beef values, packer cutting margins remain deep in the red, suggesting more weakness is likely in the cash market this week.
Cash hog index weakens, pork cutout firms... The CME lean hog index is down 85 cents to $89.68 as of Feb. 21, marking the second straight daily decline. The pork cutout firmed for a second straight day, rising $1.84 to $98.91, amid gains in all cut except ribs.
Overnight demand news... South Korea purchased about 60,000 MT of soymeal expected to be sourced from South America. Bangladesh tendered to buy 50,000 MT of optional origin non-basmati parboiled rice.
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
· 8:00 a.m. Food Price Outlook — ERS