Good morning!
Grains mixed to open the week... Corn futures favored the downside overnight, while soybeans have firmed this morning and wheat is narrowly mixed. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are fractionally to 3 cents higher and wheat futures are mostly 2 cents lower to 2 cents higher. The U.S. dollar index is trading just above unchanged and front-month crude oil futures are around $1.40 lower. Asian and European stock markets were sharply lower and U.S. stock indexes are again pointed to a weaker open, though they have pared earlier declines.
Trump urges Americans to ‘hang tough’ as tariffs trigger market freefall... President Donald Trump took to Truth Social Saturday to defend his sweeping new tariff policy after global markets plummeted and bipartisan criticism mounted. The tariffs — announced on what Trump dubbed “Liberation Day” — have triggered one of the sharpest market downturns since 2020, erasing trillions in market value. Trump called on Americans to “hang tough,” promising that although the new levies “won’t be easy,” the end result would be “historic.” He blamed foreign nations — especially China — for decades of economic imbalance, calling the U.S. a “whipping post.” Trump claimed over “FIVE TRILLION DOLLARS OF INVESTMENT” has poured into the country under his leadership.
Rollins labels Trump trade policy part of a ‘new American economic strategy’... Sunday on CNN’s State of the Union, USDA Secretary Brooke Rollins highlighted the administration’s commitment to supporting farmers who may face economic hardships due to retaliatory tariffs from trade partners. She assured viewers that USDA is prepared to implement aid measures similar to those used during previous trade disputes under Trump’s prior administration, such as tapping into the Commodity Credit Corporation (CCC) fund for economic relief. However, she acknowledged that the agency is still assessing the potential impacts of the new tariffs and does not yet have a clear timeline for releasing aid. Rollins emphasized that while the administration is working on infrastructure for potential relief programs, the full economic consequences of the tariffs may not be evident until later in the year, particularly for row crop farmers currently in planting season. She reiterated the importance of protecting American agriculture and ensuring farmers are supported through these challenging times.
Possible trade war farmer aid package could take several forms... During the U.S./China trade war in Trump’s first term, USDA mostly tapped CCC for what turned out to be around $28 billion in farmer aid. It currently contains around $15 billion in funding, out of the $30 billion maximum borrowing authority. However, with farm program payments coming using CCC funds, the total remaining will be around $5 billion at the end of the fiscal year on Sept. 30. Congress usually replenished the CCC funds several months into a new fiscal year, but some lawmakers are already saying they may try to temper or oppose the refunding. That sets up other aid possibilities such as tapping farm and food support under USDA’s Section 32 account – a permanent funding mechanism aimed at supporting American agriculture. It provides direct support to producers of agricultural commodities not typically covered under broader farm programs — such as fruits, vegetables, meats, poultry and fish. With USDA getting 30% of tariff-related funds, those coming funds could be billions of dollars. However, a small share is available for maintaining farmer parity (appropriators in the past have limited it to $350 million) with as previously noted most of the funding flowing to the child nutrition programs administered by USDA. The other 70% flows elsewhere and farm-state lawmakers have never had success tapping it. Congress will or should debate how best to scale and direct the growing tariff-related funds, balancing farm support with nutritional and other needs. With more funding via tariff-related action coming into child nutrition programs, that frees up funding for other programs if appropriators so choose. Or appropriators could increase the amount of tariff-related funding going for farmer aid. We have previously discussed another potential avenue of farmer aid via a big boost in current reference prices for farm program crops that could be part of a coming budget reconciliation measure. Farmer aid outside of program crops could come from CCC funding and/or Section 32 funding if modified.
The week ahead in Washington... Tariffs will remain the focus in Washington amid growing bipartisan criticism. Some of the new U.S. tariffs announced last week went into effect Saturday, April 5 (base 10%) and higher reciprocal tariffs take effect on Wednesday. USDA’s Rollins and U.S. Trade Representative Jamieson Greer testify before Congress this week. Federal Reserve officials speak each day this week and what they say regarding the increased Trump tariffs will be key. On Wednesday, the Fed will release minutes from its latest monetary policy meeting. USDA will issue its first national crop progress and condition data of the spring this afternoon. USDA’s monthly WASDE report will be released on Thursday.
Extreme weather in U.S. winter wheat areas... Hard freezes occurred in the U.S. HRW wheat production region Sunday morning causing some minor crop damage. Widespread flooding occurred from the lower Ohio River basin through portions of the Tennessee River basin and into the lower Mississippi River basin, potentially damaging some low-lying SRW wheat areas. U.S. wheat areas will be drier than usual and warm biased during the next couple of weeks, according to World Weather Inc.
Vicentin shuts down activity at Argentine soybean crushing plants... Argentine conglomerate Vicentin shut down activity at its soybean crushing plants due to lack of contracts amid its bankruptcy proceedings, the company said Saturday. Vicentin, in bankruptcy proceedings since 2020, added that it aims to reverse the shutdown once the uncertainty of the judicial process is resolved.
China releases plan to strengthen agriculture industry... China will explore the production potential of oilseed crops such as rapeseed and peanuts as part of a government action plan to strengthen the country’s agricultural industry. The plan, released by state-run Xinhua news on Monday, said China will also implement projects on biotech cultivation and measures to develop the hog industry and enhance competitiveness of the dairy industry among others.
China discusses accelerating stimulus to counter tariffs... China’s policymakers discussed measures over the weekend to stabilize the economy and markets in the face of U.S. tariffs, including whether to accelerate plans to unleash stimulus to bolster consumption, people familiar with the matter told Bloomberg. The measures will focus on boosting consumer spending, birth rate and subsidies for some exports, said the people. The regulators also discussed details of a stabilization fund to shore up its stock market, one of the people said. For now, officials have concluded China has built up a sufficient arsenal of tools to support its economy and tide over the current turmoil. The scale and the timing of the stimulus are yet to be finalized and the plan could still be subject to change, the people added. Goldman said in a report on Sunday that the new U.S. tariff rates would lower Chinese GDP growth by at least 0.7 percentage point this year. Goldman in a separate report on Sunday kept its 2025 GDP growth forecast for China at 4.5% due to better-than-expected first-quarter data and increased policy easing expectations but trimmed its earnings growth forecast for the year to 7% from 9%.
China tells U.S. companies it will protect rights of foreign-funded firms... China’s Vice Commerce Minister Ling Ji told U.S. companies the country would always protect the rights of foreign-funded firms in China, including those from the United States. The comments from Ling, also China’s deputy trade negotiator, suggest Beijing has no plans to penalize U.S. companies even as President Trump escalates a tariffs war. Citing Ling, China’s Commerce Ministry said in a statement on Monday that it would protect the “legitimate rights and interests of foreign-funded enterprises in accordance with the law and actively promote the resolution of foreign-funded enterprises’ problems and demands.”
Expanded limits for cattle, hog futures... Due to Friday’s limit-down performances, CME Group livestock futures will have expanded trading limits today. The expanded limits will be $9.75 for live cattle, $12.25 for feeders and $6.00 for lean hogs.
Weekend demand news... Algeria tendered to buy a nominal 50,000 MT of optional origin durum 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
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. U.S. Agricultural Trade Data Update — ERS
- 3:00 p.m. Crop Progress — NASS