Good morning!
Corn and wheat firmer, beans mildly weaker this morning... Corn and wheat futures mildly favored the upside overnight and are trading near session highs early this morning while soybeans have slipped a little. As of 6:30 a.m. CT, corn futures are trading fractionally to 3 cents higher, soybeans are mostly a penny lower and wheat futures are 4 to 6 cents higher. The U.S. dollar index is down around 450 points and front-month crude oil futures are around 75 cents lower.
China delays, redirects wheat shipments... China has delayed imports of up to 600,000 MT of mostly Australian wheat and offered some of these cargoes to other buyers as ample domestic supplies reduce demand, two trade sources with direct knowledge of the matter told Reuters. Around 10 ships in total from Australia and Canada scheduled for delivery in January of February were being delayed or resold, each carrying around 60,000 MT of wheat. China’s state-run COFCO, which is the importer of most of these delayed or redirected cargoes, is paying the costs of delaying shipments, including charges to hold back grain, and will take any gain or loss from reselling grain.
Prolonged dryness threatens Ukraine’s winter crops... Ukraine is experiencing the lowest soil moisture levels of the last seven seasons, raising concerns about yields in 2025, the Ukrainian national agricultural academy said. “The total amount of precipitation for November-January was only 79.6 mm and was significantly inferior to the long-term average of 117 mm,” APK-Inform consultancy quoted the Academy as saying. Scientists said the insufficient amount of precipitation during most of the winter period and very low reserves of moisture in the soil “cause special concern for grain producers.”
China slams Trump’s tariffs amid fentanyl dispute... China accused the U.S. of ignoring its cooperation on combating fentanyl after President Donald Trump imposed a 10% tariff on Beijing over the flow of illegal drugs. The tariffs, which took effect Tuesday, reignited a trade war between the two largest economies. In response, China imposed its own levies and launched an anti-trust probe into Google. Cooperation on fentanyl had been a rare bright spot in U.S./China relations, with former President Joe Biden previously brokering a deal to curb production. Trump hinted at a possible call with Chinese leader Xi Jinping but later downplayed its urgency. China called for dialogue over unilateral measures.
USPS suspends inbound parcels from China, Hong Kong... The U.S. Postal Service said it would temporarily suspend parcels from China and Hong Kong, after President Trump ended a trade provision this week used by retailers including Temu and Shein to ship low-value packages duty-free to the United States. USPS said the change will not impact the flow of letters and flat mail from China and Hong Kong. The Trump administration imposed an additional 10% tariff on Chinese goods and moved to close the “de minimis” exemption that allows U.S. shoppers to avoid paying tariffs for shipments below $800. Reuters reported that Chinese suppliers use the duty-free provision to export chemical materials for fentanyl by disguising them as gadgets and other low-cost goods.
China lodges complaints with U.S. over Panama Canal remarks... China’s foreign ministry said it had lodged complaints with the U.S. over “irresponsible” remarks regarding the Panama Canal and “attacks” on its cooperation with Panama over the waterway. “Currently, the cooperation between China and Panama under the framework of the Belt and Road Initiative is proceeding normally,” a ministry spokesperson said when asked about Panama’s decision to let its involvement in the infrastructure plan expire. “We hope that the relevant parties will remain confident, not be influenced by external interference, and make the right decisions based on the overall bilateral relationship and the long-term interests of the people of both countries.”
Federal unions sue Trump over ‘buyout’ plan... More than 20,000 federal employees have accepted the Trump administration’s “deferred resignation” program, prompting a lawsuit from worker unions. The suit, filed in Massachusetts federal court, argues that the Office of Personnel Management lacked the authority for the initiative, which offers months of full pay for those who voluntarily leave. Unions also highlight Elon Musk’s involvement, comparing the program to his controversial Twitter/X layoffs. The case raises concerns about workforce expertise loss and increased politicization of federal jobs.
USDA FSA employees face job uncertainty amid agency changes... Recent developments could impact USDA Farm Service Agency (FSA) employees in county and state field offices nationwide. A Jan. 21 memorandum from the acting USDA Secretary may introduce hiring and regulatory changes affecting job stability. Restructuring efforts may lead to office relocations or job role changes. Bottom line: These shifts could impact job satisfaction, retention and FSA’s ability to support farmers and ranchers effectively.
USAID employees face administrative leave amid spending cuts... Most U.S. Agency for International Development (USAID) employees will be placed on administrative leave starting Friday as the agency becomes a focal point in efforts by Trump and Elon Musk to reduce federal spending. Lawmakers on the House and Senate Agriculture Committees warn that President Trump’s overhaul of USAID is jeopardizing food aid deliveries and U.S. agricultural producers relying on federal contracts. USAID, which spends about $4 billion annually on international food assistance, has billions in commodity purchases stuck in limbo due to funding freezes and staff furloughs.
Fed officials signal patience on monetary policy... Federal Reserve officials have reiterated their cautious approach to monetary policy, emphasizing the strength of the U.S. economy. San Francisco Fed President Mary Daly stated that policymakers can take their time assessing economic shifts, including tariffs and immigration policies, without rushing decisions. Fed Vice Chair Philip Jefferson echoed this sentiment, acknowledging economic uncertainty while predicting a gradual easing of monetary policy over time. Both officials reaffirmed the Fed’s commitment to returning inflation to its 2% target but stressed there is no urgency to alter the current stance.
Egg producers push for urgent HPAI response... Members of the United Egg Producers (UEP) are meeting with lawmakers this week, urging swift action to combat the ongoing outbreak of highly pathogenic avian influenza (HPAI) , which has already led to the loss of 20 million birds in 2025. UEP is asking lawmakers to support a letter to USDA secretary nominee Brooke Rollins, pressing for immediate steps like developing an animal vaccination strategy, enforcing biosecurity measures and revising disaster assistance indemnity rates. Roughly 104 million egg-laying birds have been put down over the past two years, with 29 million culled just since October. Over the past 30 days, USDA data shows 80 commercial flocks and 43 backyard flocks have been affected with a total of 22.75 million birds. Rollins has signaled bird flu response will be a top priority under Trump’s USDA.
Waffle House adds egg surcharge amid ‘dramatic increase’ in prices... Restaurant chain Waffle House has added a 50-cent surcharge for every egg in a customer’s order, the company said. The temporary fee is in response to a “dramatic increase in egg prices” that has been triggered a supply shortage due to outbreaks of HPAI. Wholesale egg prices are record-high.
Beef plants cutting production amid deeply negative margins... Beef packer margins are deep in the red at well over $100.00 per head. As a result, packers have slashed production, with weekly estimated slaughter under 600,000 head. Highly negative packer margins, reduced slaughter runs and the availability of fresh contracted supplies may end the 11-week run of historic cash cattle prices.
Cash hog index, pork cutout continue to climb... The CME lean hog index is up another 31 cents to $84.08 as of Feb. 3, extending its rise from the seasonal low in early January. The pork cutout firmed 95 cents on Tuesday to $94.76, the highest since Dec. 27, as all cuts except bellies strengthened.
Overnight demand news... South Korea purchased 85,000 MT of U.S. milling wheat and tendered to buy up to 140,000 MT of corn from the U.S., South America or South Africa. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Iran passed on a tender to buy 120,000 MT of corn, 120,000 MT of feed barley and 60,000 MT of soymeal.
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
- 9:30 a.m. Weekly Ethanol Production — EIA
- 11:00 a.m. Weekly Weather: State Stories — NASS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Dairy Products — NASS