Good morning!
Grains mostly lower overnight... Corn, soybeans and wheat favored the downside overnight as traders closely monitored the fluid tariff/trade situation. As of 6:30 a.m. CT, corn futures are trading unchanged to 2 cents lower, soybeans are 1 to 4 cents lower and wheat futures are 4 to 7 cents lower. The U.S. dollar index is down around 375 points and front-month crude oil futures are about $1.60 lower.
Trump pauses tariffs on Canada and Mexico, China tariffs take effect... President Donald Trump agreed to pause tariffs on Mexican and Canadian goods after negotiations with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. The duties, originally set to take effect today will be postponed for at least 30 days while further discussions take place.
China launches targeted tariffs in controlled retaliation... China on Tuesday imposed targeted tariffs on U.S. imports and put several American companies, including Google, on notice for possible sanctions, in a measured response to the sweeping duties on Chinese imports imposed by President Trump. Beijing’s limited counter to Trump’s imposition of an additional 10% tariff on all Chinese imports underscored the attempt by Chinese officials to engage in talks that could avert an outright trade war. China’s new measures include a 15% levy on U.S. coal and LNG and 10% for crude oil, farm equipment and a small number of trucks as well as big-engine sedans shipped to China from the United States. China said it was starting an anti-monopoly investigation into Google. It put both PVH Corp, the holding company for brands including Calvin Klein, and U.S. biotechnology company Illumina on a list for potential sanctions. Separately, China said it was imposing export controls on some metals, including tungsten, that are critical for electronics, military equipment and solar panels. The 10% duty on electric trucks imported from the U.S. could apply to Elon Musk’s Cybertruck. China’s new tariffs will not take effect until Feb. 10, giving Washington and Beijing time to try and reach a deal. Trump will speak with Chinese leader Xi Jinping in the next few days. Some speculate discussions could revisit the Phase 1 trade deal from Trump’s first term.
Cordonnier lowers Brazil corn crop forecast... South American crop consultant Dr. Michael Cordonnier lowered his Brazilian corn crop forecast 2 MMT to 123 MMT, as it’s likely 30% to 40% of the safrinha crop will be planted after the ideal window. Safrinha yields will be highly dependent on when Brazil’s rainy season comes to an end. Cordonnier left his Brazilian soybean estimate at 170 MMT. After cutting his Argentine crop estimates for three weeks in a row, Cordonnier kept his forecasts at 49 MMT for soybeans and 47 MMT for corn as he sees how the weather plays out this month. Of note: With the cut the Brazilian corn crop estimate, Cordonnier now projects total South American corn production will decline 300,000 MT (0.2%) from year-ago. He forecasts South American soybean production will rise 16.6 MMT (7.6%) from last year.
HRW crop conditions slip a little more during January... State-level winter wheat condition ratings showed modest deterioration in the HRW crop during January, despite an improvement in top producer Kansas. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop slipped 0.5 point over the past month to 329.8, though the reading for the end of December didn’t include Texas. Since the final national ratings at the end of November, the HRW crop has declined 9.5 points, as all states except Montana showed deterioration. Click here for details.
SovEcon raises 2025-26 Russian wheat export outlook... Black Sea consultancy SovEcon raised its 2025-26 Russian wheat export forecast by 1.9 MMT to 38.3 MMT. However, that would still be down 4.5 MMT from the forecast for the current marketing year.
Japan orders release of rice stocks to tame consumer inflation... Japanese Prime Minister Shigeru Ishiba has ordered the swift implementation of measures to give consumers relief from inflated food prices, including the release of stockpiled rice to bring down costs. Economy Minister Ryosei Akazawa said Ishiba had instructed the cabinet to proceed quickly with countermeasures as the prices of rice, vegetables and other living costs have soared in recent months. Details such as the sale price and timing of the rice reserve release are yet to be decided, a ministry official said.
India temporarily bans export of de-oiled rice bran... India has prohibited the export of de-oiled rice bran until Sept. 30, according to a government notification issued on Tuesday.
Senate Ag Committee advances Rollins to be USDA secretary... The Senate Ag Committee unanimously approved Brooke Rollins to be the new USDA secretary. The unanimous committee approval suggests strong bipartisan backing for Rollins’ nomination, with her final confirmation by the full Senate expected to happen soon.
Key confirmation votes for Trump nominees today... Two of Trump’s controversial nominees face crucial Senate votes today. Robert F. Kennedy Jr., nominated for HHS secretary, awaits a Finance Committee decision amid concerns over his vaccine skepticism, with Sen. Bill Cassidy (R-La.) still undecided. RFK Jr. has been vocal about his intentions to dramatically alter current agricultural practices, particularly regarding pesticide use. He has promised to: Ban agricultural chemicals prohibited in other countries; Remove “conflicts of interest” from USDA dietary panels and commissions; and Promote a transition to regenerative and less chemically intensive agriculture. Meanwhile, Tulsi Gabbard, nominated for director of national intelligence, has gained the support of Sen. Susan Collins (R-Maine), ahead of her Intelligence Committee vote. Sen. Todd Young (R-Ind.) remains uncertain and consulted with Vice President JD Vance and colleagues over the weekend.
Cattle traders ignore cash fundamentals... Live cattle and feeders faced heavy pressure from long liquidation on Monday amid news of the impending border reopening to Mexican cattle. That superseded a 38-cent rise in the average cash cattle price to a record $209.57 last week – the fifth straight week with an all-time high – and strong wholesale beef gains of $4.31 for Choice to $331.99 and $2.77 for Select to $319.84.
Cash hog index rises, pork cutout declines... The CME lean hog index is up another 29 cents to $83.77 as of Feb. 3. The index has risen $3.34 from the seasonal low on Jan. 9. The pork cutout dropped 94 cents to $93.81 on Monday as it gave back a portion of last Friday’s strong gains, led lower by hams. Of note, lean hog futures have expanded limits of $6.00 today after yesterday’s limit-down performance in April hogs.
Overnight demand news... South Korea tendered to buy 50,000 MT of U.S. milling wheat. Japan is seeking 96,725 MT of milling wheat via its weekly tender. Bangladesh tendered to buy 50,000 MT of optional origin milling 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
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