Good morning!
Grains firmer to open the week... Corn, soybeans and wheat traded higher overnight coming out of the extended holiday weekend. As of 6:30 a.m. CT, corn futures are trading around a penny higher, soybeans are mostly 13 to 15 cents higher and wheat is 3 to 6 cents higher. The U.S. dollar index is around 675 points lower and front-month crude oil futures are $1.85 lower.
Trump to delay tariffs, signals shift toward negotiation... President Donald Trump postponed imposing new tariffs and directed federal agencies to review trade relationships with China, Canada, and Mexico. A memo said trade officials will assess trade deficits, unfair practices and currency issues, easing concerns about abrupt trade actions. While Trump campaigned on steep tariffs, including a 60% duty on Chinese goods, the administration now favors a methodical approach. The administration will evaluate compliance with the 2020 China Phase 1 trade deal and review the U.S.-Mexico-Canada Agreement (USMCA) ahead of its 2026 assessment. On USMCA, Trump is set to direct his cabinet secretaries to assess its impact on American workers and businesses and make recommendations on whether the U.S. should continue participating in it, according to the document. Trump may enact 25% tariffs on Mexico and Canada on Feb. 1, he said Monday. Trump mentioned the possibility of introducing tariffs on China if it rejected an American-led deal to buy TikTok’s assets in the country but didn’t give a specific date for potential action.
Brazil’s soybean harvest, safrinha corn planting slowed by rains... Brazil’s soybean harvest reached 1.7% as of last Thursday, according to AgRural, the slowest pace since 2020-21. Harvest in Mato Grosso, Brazil’s top producing state, was the slowest in AgRural’s historical series that began in 2010-11. Safrinha corn planting, which follows soybean harvest, reached only 0.3%, the slowest start since 2021.
Cordonnier cuts Argentine crop forecasts... Crop damage from recent hot, dry conditions in Argentina caused South American crop consultant Dr. Michael Cordonnier to cut his Argentine production forecasts by 1 MMT each for soybeans and corn. He now forecasts production at 51 MMT for soybeans and 48 MMT for corn with a lower bias toward both crops. Cordonnier kept his Brazilian production forecasts at 170 MMT for soybeans and 125 MMT for corn.
Argentina gets temporary relief, but crop stress remains... Rains moved across Argentina as expected during last weekend. Scattered rains are expected during the next two weeks, though rainfall will be lighter than normal with a warm bias toward temps. Rains have not alleviated concerns that ongoing drought could further hurt crop yields, the Rosario Grain Exchange said. Rainfall in central Brazil lessened during the weekend, which was needed, though soybean harvest and safrinha corn planting will remain slowed without a period of drier weather. World Weather Inc. says there is potential for a short-term resurgence of La Niña’s strength in early February that could return drier and warmer conditions to Argentina, Uruguay, southern Paraguay and southern Brazil while greater rain to center- west and center-south Brazil.
Trump signs bevy of executive orders at post-inauguration rally... Trump signed multiple executive orders centered on government reform, energy policy, and immigration on Monday, marking a dramatic and public start to his administration. Trump rescinded 78 executive actions from the Biden era, froze federal hiring (excluding the military) and initiated a regulatory freeze to halt bureaucratic rulemaking. He also ordered federal agencies to address cost-of-living concerns and formally withdrew the U.S. from the Paris Climate Accord.
The week ahead in Washington... President Donald Trump will meet with House and Senate GOP leadership at the White House today to discuss the new administration’s legislative agenda. The week will also include some Cabinet nominee votes and more nominee hearings, including USDA Secretary-nominated Brooke Rollins on Thursday. Marco Rubio was Trump’s first Cabinet pick to be approved, confirmed as Secretary of State with a unanimous 99-0 Senate vote. The House this week will consider the Fix Our Forests Act, a bipartisan piece of legislation that aims to improve forest management and reduce the threat of catastrophic wildfires in the United States. The bill passed the House last September, but not the Senate. The economic focus will be the World Economic Forum in Davos, Switzerland, where global leaders convene to address key global and regional economic challenges. Key agricultural data includes USDA’s food price outlook on Friday, along with the monthly Cattle on Feed and Cold Storage Reports.
Vilsack criticizes EPA report on biofuels as uncertain future looms... Former USDA Secretary Tom Vilsack, in one of his final actions, criticized an EPA report asserting that the Renewable Fuel Standard may have had a “modest but negative” environmental impact. In a Jan. 17 letter to House Speaker Mike Johnson (R-La.), Vilsack argued the report contained significant omissions and overreached in its analysis, failing to consider greenhouse gas effects. As the Trump administration begins, Vilsack’s pushback highlights uncertainty over the future of biofuel policies, critical to rural economies. Whether Trump and the Republican-led Congress will sustain or alter policies supporting renewable fuels remains to be seen.
China holds lending rates unchanged amid yuan concerns... China’s central bank maintained its benchmark lending rates for the third consecutive month to stabilize the weakening yuan. The one-year loan prime rate (LPR) remained at 3.1%, while the five-year LPR stayed at 3.6%. The decision comes amid potential risks of further yuan depreciation, particularly if Trump follows through on his threats to increase tariffs on Chinese imports.
India allows 1 MMT of sugar exports... India will allow mills to export 1 MMT of sugar through September, the food ministry announced. The ministry allocated mills a uniform export quota of 3.174% of their three-year average production, which they can export directly or via merchant exporters. India did not allow sugar exports during 2023-24.
U.S., Canada ease ban on French poultry imposed after HPAI vaccination... The U.S. and Canada have lifted embargoes on certain French poultry imports imposed after Paris decided to vaccinate ducks against highly pathogenic avian influenza (HPAI) in October 2023, the French ag ministry said. The U.S. also lifted its ban on imports of ducks and duck products from other EU member states, the French ministry said. While French poultry exports to the U.S. and Canada are minimal, shipments of avian genetics are more common.
China’s hog farmers recover, cattle and dairy still struggling... China’s hog farms have recovered from a period of losses, while declines in cattle and dairy farming have been partially alleviated, an ag ministry official said. However, the meat and dairy sectors are struggling with oversupply challenges due to a slowing economy and declining consumption. China will continue to implement policies to address challenges in the beef and dairy sectors and stabilize production capacity. Authorities are investigating beef imports as part of efforts to protect domestic producers. China is also considering trade restrictions on imports of dairy and pork from the European Union.
China’s pork imports rise in December... China imported 200,000 MT of pork in December, up 20,000 MT (11.1%) from November and 7.7% above year-ago. In 2024, China imported 2.28 MMT of pork, down 15.7% from the previous year.
Cash cattle post another record high... Cash cattle averaged a record $203.67 last week, up $1.09 from the previous week. Cash cattle prices have risen for nine straight weeks, surging $18.88 during that span. February live cattle futures finished last Friday $6.92 below the average cash price, suggesting traders sense a short-term top is near.
Cash hog index, pork cutout show signs of stabilizing... After pressure in early January, the CME lean hog index and pork cutout showed recent signs of stabilizing. The cash index has firmed for a week, while the pork cutout rose $1.71 on Monday amid gains in all cuts except hams.
Holiday weekend demand news... Egypt purchased a “significant” amount of wheat from Russia, though no specific tonnage was announced. Japan is seeking 126,893 MT of milling wheat via its weekly tender. Algeria tendered to buy up to 240,000 MT of corn from Brazil or Argentina and 50,000 MT of optional origin soymeal. Iran tendered to buy up to 120,000 MT of corn sourced from Brazil, Europe or the Black Sea region, 120,000 MT of feed barley sourced from the EU, or Black Sea region and 60,000 MT of soymeal from Brazil or Argentina. Mauritius tendered to buy 8,000 MT of optional origin long-grain white 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
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. Chickens and Eggs — NASS