Good morning!
Grains face pressure overnight from trade tensions tied to metals tariffs... Corn, soybeans and wheat faced selling pressure overnight amid risk aversion. As of 6:30 a.m. CT, corn futures are trading 5 to 7 cents lower, soybeans are mostly 8 cents lower and wheat is 2 to 4 cents lower. The U.S. dollar index is up around 250 points and front-month crude oil futures are about 70 cents higher.
U.S. metals tariffs escalate global trade tensions, trigger swift EU retaliation... President Donald Trump imposed 25% tariffs on steel and aluminum imports, impacting all global suppliers. The European Union launched “swift and proportionate countermeasures,” planning to impose its own duties on up to €26 billion ($28.3 billion) worth of American goods, including poultry, beef, some seafood, nuts, eggs, sugar, vegetables and other goods. The EU action will involve two steps: On April 1, the European Commission will reintroduce what it calls “rebalancing measures,” which the EU had from 2018 and 2020 but were suspended under the Biden administration. On April 13, additional duties will target 18 billion euros ($19.6 billion) in U.S. exports to the bloc. Major Asian producers including South Korea, Taiwan, Japan and Australia held off on retaliating. The UK said it would focus on “rapidly negotiating a wider economic agreement.” China’s foreign ministry said it will take all necessary measures to safeguard its rights and interests, noting the U.S. move violated World Trade Organization rules. Ontario Premier Doug Ford held a call with Commerce Secretary Howard Lutnick on Tuesday, during which they agreed to scrap a Canadian electricity surcharge in exchange for a U.S. relaxation of the steel and aluminum tariffs.
U.S. tariff processing systems certified... The U.S. Department of Commerce Bureau of Industry and Security has filed a notice confirming that systems are in place to efficiently process and collect tariff revenue under the steel and aluminum tariffs effective today. This certification, required under the proclamation implementing the tariffs, will be published in the Federal Register on March 14.
Ethanol ‘absolutely on list’ of potential Canadian tariffs... Canada could impose non-tariff measures such as restricting its oil exports to the U.S. or levying duties on U.S. imports if the trade dispute escalates further, Canada’s energy minister Jonathan Wilkinson said. “When we are talking about non-tariff retaliation, it could be about restricting supply, it could be putting our own export duties on products. It could be energy and minerals, it could be broader than that,” Wilkinson said in an interview with Reuters. “Everything is on the table.” Wilkinson said Canada is considering imposing tariffs on U.S. ethanol as part of a second tranche of trade penalties if Trump continues to escalate the trade war, noting ethanol is “absolutely on the list of things” that could face tariffs.
House passes stopgap funding measure to keep gov’t open, Senate vote awaited... The House passed a funding bill to avert an end-of- -week government shutdown, clearing the continuing resolution (CR) in a largely party-line vote, with just one Democrat — Rep. Jared Golden (D-Maine) — bucking his party’s leaders to back the measure. Rep. Thomas Massie (R-Ky.) was the lone GOP “no” vote. It now heads to the Senate where it will need 60 votes to pass. Sen. Rand Paul (R-Kentucky) is the only Republican not expected to support the bill. The unknown is whether eight Democrats will cross the aisle to approve the bill. If the Senate can’t pass the stopgap prior to midnight Friday, when current funding expires, the government is likely to shut down.
Iowa biodiesel plants idled amid tax credit uncertainty... The expiration of the $1-per-gallon blenders tax credit on Dec. 31, 2024, has led to the shutdown of multiple biodiesel plants in Iowa. Industry leaders face uncertainty as the Treasury Department has yet to finalize rules for the replacement 45Z Clean Fuel Production Tax Credit. Five of Iowa’s 10 biodiesel plants are idled, with supply chains disrupted. Sen. Chuck Grassley (R-Iowa) criticized the Biden administration for the situation, calling for increased Renewable Volume Obligations.
Push to reinstate biodiesel blender credit gains momentum... Industry groups representing truckers, fuel marketers and convenience store operators are urging Congress to reinstate the expired 40A Biodiesel Tax Credit. In a letter to House Ways and Means Chair Jason Smith (R-Mo.) and Ranking Member Richard Neal (D-Mass.), they warned the credit’s expiration has led to volatility in diesel markets and could drive up costs for trucking, home heating and rail industries. They also criticized the Inflation Reduction Act’s (IRA/Climate Act) biofuel policies for lacking sufficient incentives to integrate advanced biofuels. Despite mounting pressure, Congress has yet to signal movement on reinstating the credit.
France cuts wheat export forecast... France’s ag ministry lowered its 2024-25 wheat export forecast outside the EU by 200,000 MT to 3.2 MMT, the lowest in the office’s records back to 1996-97. The ministry raised wheat exports within the bloc by 40,000 MT to 6.24 MMT, still 0.3% below last year.
Little change expected in Canadian planting intentions... Analysts expect Statistics Canada to show Canadian farmers intend to plant 26.9 million acres to wheat, according to a Bloomberg survey, which would be up 300,000 acres from last year. Canola seedings are expected to come in at 21.7 million acres, down 300,000 acres from year-ago. Little year-over-year change is also expected for barley, soybean and lentils planting intentions. Analysts expect oats plantings to rise 12.1% from year-ago, though total seedings are anticipated at only 3.3 million acres.
Argentine oilseed workers stage strike over wages... The SOEA union of Argentine oilseed workers kicked off a strike at Vicentin’s San Lorenzo and Ricardone plants in Rosario on Tuesday. That will expand across the country and the Federacion Aceitera organization will join in the indefinite strike due to a wage dispute. An internal document from Vicentin, seen by Reuters, said that the firm was “unable to pay the full amount of February’s accrued wages” and that employees were scheduled to be paid 30% of what was owed to them on March 10. Vicentin’s inability to fully pay is due to a “critical financial situation,” the document read. Vicentin has been in bankruptcy proceedings since 2020.
Chinese exchange alters rapeseed meal trading regs as Canadian tariffs spark price volatility... China’s Zhengzhou Exchange raised the trading margin requirements for some rapeseed meal futures contracts to 9% from 7% after Beijing’s 100% tariff on Canadian imports triggered a two-day rally that pushed prices to a five-month high. The new trading margin requirements will be effective from settlement on March 12. The exchange earlier increased the minimum order size for rapeseed meal futures contracts to curb small investor participation and stabilize prices.
Lagarde: Exceptional shocks amplify inflation risks... The euro zone economy is facing exceptional shocks from trade, defense and climate issues, possibly amplifying inflation volatility and raising the risk that price growth becomes more persistent, European Central Bank (ECB) President Christine Lagarde warned. These forces make it impossible for ECB to signal policy intent but make it imperative the bank doubles down on its 2% inflation target and outlines how it reacts to various shocks, Lagarde said. She noted inflationary forces react disproportionately more strongly to large shocks than small ones.
Choice beef continues to strengthen... Wholesale Choice beef prices firmed $3.62 to $321.20 on Tuesday while Select slipped 9 cents to $306.86. Movement strengthened to 146 loads, including 109 boxes of Choice cuts. Choice beef has firmed $10.43 since Feb. 21, which has improved packer margins, though they remain deep in the red.
Cash hog fundamentals continue to ease... The CME lean hog index is down a penny to $89.70 as of March 10, the fifth straight daily decline, though the total drop during that period is only 50 cents. The pork cutout fell 64 cents to $97.58 on Tuesday, led by losses in primal bellies.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Iran tendered to buy up to 120,000 MT of corn from Brazil, Europe of the Black Sea region, 120,000 MT of feed barley from the EU or Black Sea region and 120,000 MT of soymeal from Brazil or Argentina.
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. Meat Price Spreads — ERS
- 2:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Season Average Price Forecasts — ERS
- 2:00 p.m. Wheat Data — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Price Reactions after Crop Reports — NASS
- 2:00 p.m. Turkey Hatchery — NASS