Good morning!
Risk aversion ebbs a bit overnight... Grain and soy futures firmed overnight, led by soybeans. As of 6:30 a.m. CT, corn futures are trading 2 cents higher, soybeans are 8 to 10 cents higher and wheat is 3 to 5 cents higher. The U.S. dollar index is around 150 points lower and front-month crude oil futures are about 25 cents higher. Asian and European stock markets were mostly higher overnight, while U.S. stock indexes are pointed to sharply higher openings today.
Greer to highlight trade policy agenda today... U.S. Trade Representative Jamieson Greer is to present the administration’s 2025 trade policy agenda to the Senate Finance Committee today, where he is likely to face tough questions about the tariffs’ impact. President Donald Trump has argued that tariffs are crucial for restoring the U.S. as a manufacturing power, reducing trade deficits and raising government revenue. Greer plans to argue that Trump’s tariff strategy is “already bearing fruit,” according to a copy of his prepared remarks. “Nearly 50 countries have approached me to discuss the president’s new policy and explore how to achieve reciprocity,” he plans to say. Of note: Sen. Thom Tillis (R-N.C.) told reporters markets need to see specific trade negotiations for things to calm down. “The markets are not going to cease in voting no-confidence until they begin to see that,” said Tillis, who’s up for re-election in 2026. Tillis has warned that the tariffs could even undermine Republicans’ reconciliation bill.
EU plans 25% tariffs on U.S. goods, spares bourbon and dairy; soybeans delayed to year-end... The European Union is preparing to impose tariffs of up to 25% on select U.S. goods, but will notably exclude high-profile items like bourbon, wine and dairy products, according to the Financial Times. Under the proposed plan, products such as orange juice, poultry and soybeans will be targeted, though with varying rates: 10% instead of 25% for some, and a delayed implementation for others. Tariffs will be staggered between April 15 and Dec. 1, with soybean levies postponed until the latter date. EU Trade Commissioner Maroš Šefčovič emphasized a strategic approach: “We are not in the business of tit-for-tat or penny for penny,” noting that the list was shaped in consultation with EU member states. Final approval is expected Wednesday.
Trump dismisses last-gasp EU push to stop U.S. tariffs... President Donald Trump rejected a European Union proposal to drop tariffs on all bilateral trade in industrial goods with the United States. His 20% tariff on all EU imports is due to come into force on Wednesday. Trump said the offer from European Commission President Ursula von der Leyen is not enough to reset the transatlantic trading relationship, accusing the EU of maintaining other barriers to trade.
China vows to ‘fight to the end’ in burgeoning tariffs war... China refused to bow to what it called “blackmail” from the U.S. amid a global trade war ignited by President Trump’s sweeping tariffs. Beijing’s rebuke came after Trump threatened to ratchet up tariffs on China. “The U.S. side’s threat to escalate tariffs against China is a mistake on top of a mistake, once again exposing the American side’s blackmailing nature,” China’s commerce ministry said. “If the U.S. insists on having its way, China will fight to the end.” The Chinese response came after Trump threatened a further 50% tariff on all Chinese goods unless Beijing withdraws its tit-for-tat retaliation against his earlier “reciprocal” levies. That takes the cumulative tariff rate announced this year to 104%.
China state firms pledge to boost share purchases to calm markets... Chinese state holding companies vowed on Tuesday to increase share investment while a slew of listed firms announced share buybacks as Beijing stepped up efforts to stabilize a stock market rocked by U.S. tariff woes. The announcements by companies including China Chengtong Holdings Group and China Reform Holdings Corp come a day after state fund Central Huijin said it would increase share holdings to steady markets. China’s retail dominated stock market “is vulnerable to irrational pull-backs when hit by unexpected, negative news,” China International Capital Corp (CICC). Meanwhile, a growing number of listed companies – many controlled by the government – unveiled plans to buy back shares. China’s state-owned asset regulator said it would guide state-owned companies to contribute to market stability, while the country’s financial watchdog unveiled plans to raise stock investment limits for insurers.
Chinese agricultural stocks surge amid escalating trade war... Chinese agricultural stocks rose sharply on Tuesday as investors bet tariffs would limit U.S. agricultural imports and boost domestic producers, defying a broader market crash sparked by the escalating U.S./China trade war. Shares of Dabeinong Tech, a seed and animal feed producer, rose 6.45% and shares of Wens Foodstuff, one of the country’s largest pig breeders, were up 5.1%. Stocks of other key agricultural firms Wellhope Foods and New Hope Liuhe rose by 6.3% and 2.45%, respectively. A Hang Seng index of agricultural products stocks listed in mainland China is up 8.6% in April. Yang Tingwu, vice general manager of asset manager Tongheng Investment, told Reuters China’s retaliatory tariffs benefit domestic farm products, and the sector is also seen as strategically vital in the escalating trade war. “In the short term, fewer imported agriculture products is a boon to the domestic farming industry,” said Yang. “In the long term, China needs self-sufficiency in grain production in an intensifying rivalry with the U.S.”
Fitch raises China major state banks ratings... Global ratings agency Fitch revised outlooks for China’s five major state banks and China Merchants Bank to stable from negative, despite the downgrade of China’s sovereign rating last week. The Chinese government still retains financial flexibility to support the sector including the six banks, even during higher deficits and rising debt, Fitch said.
Winter wheat CCI ratings deteriorated from last fall... USDA rated the winter wheat crop 48% “good” to “excellent” and 21% “poor” to “very poor” in the initial ratings of the spring. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop opened spring at 324.7, down 14.6 points from last fall and 20.5 points below year-ago. The SRW crop declined 13.1 points from last fall to 366.4, down 7.4 points from last year. Each of the HRW states aside from Montana showed deterioration in crop conditions during winter. For SRW, conditions declined in each of the states during winter except for Indiana and North Carolina. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 6:
- Winter wheat: 48% good/excellent (55% end of November); 5% headed (5% average).
- Corn: 2% planted (2% average).
- Spring wheat: 3% planted (3% average).
- Cotton: 4% planted (6% average).
Cordonnier keeps South American crop forecasts unchanged... South American crop consultant Dr. Michael Cordonnier kept his Brazilian crop production forecasts at 169 MMT for soybeans and 122 MMT for corn. He has a neutral/lower bias toward the corn crop, noting the southern half of safrinha corn areas will enter reproduction later in April and the crop will need rainfall through May. In Argentina, Cordonnier left his production estimates at 48 MMT for soybeans and 46 MMT for corn, noting yields are expected to decline for both crops as harvest progresses.
Ag imports plunge, but trade deficit persists in February... Agricultural exports fell to $13.59 billion in February, down $830 million from January, while imports dropped $2.81 billion to $17.86 billion. That narrowed the monthly trade deficit to $4.27 billion, a notable improvement from January’s record shortfall of $6.25 billion. Through the first five months of fiscal year (FY) 2025, the U.S. has racked up an ag trade deficit of $16.25 billion, with $77.56 billion in exports and $93.81 billion in imports. That’s nearly four times larger than the $4.24 billion deficit seen at the same point in FY 2024, which ended with a record $31.78 billion gap. As new tariff policies come into focus, U.S. ag trade flows could shift. But with inflationary pressures and geopolitical tensions in the mix, the magnitude and direction of these changes remain uncertain.
Goldman warns of bear market, BlackRock downgrades U.S. stocks... BlackRock Inc. strategists Jean Boivin and Wei Li downgraded U.S. equities on Monday to neutral from overweight on a three-month horizon, saying they expect “more pressure on risk assets in the near term given the major escalation in global trade tensions.” A strategy team at Goldman Sachs Group Inc. said the equity selloff could well turn into a longer-lasting cyclical bear market as recession risks mount. Several international equity benchmarks have sustained losses that technically meet the definition of a bear market, including the S&P 500 Index. Cyclical bear markets typically last about two years and take five years to rebound to their starting point. Unlike one-off event-driven shocks, they are a function of the economic cycle, the Goldman strategists said. For now, they view the selloff as an event-driven bear market. Goldman economists have raised the probability of a U.S. recession to 45%. BlackRock Chief Executive Officer Larry Fink has said most CEOs he talks to think the US is already in a recession.
Livestock markets in liquidation mode... Cattle and hog traders have turned a blind eye to cash market fundamentals, with price action instead being driven by long liquidation amid concerns of longer-term impacts to demand from the trade war. While cattle and hog futures are short-term oversold, that won’t be enough on its own to ease selling pressure. Traders’ nerves need to be calmed for markets to stabilize, though the general ebb in risk aversion overnight, suggests corrective rebounds in livestock futures may be seen at the start of today’s trade.
Overnight demand news... South Korea purchased 65,000 MT of optional origin feed wheat, excluding Russia, Argentina, Pakistan, Denmark and 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
· No reports scheduled.