Good morning!
Risk-off trade overnight… Corn, soybeans and wheat followed the general marketplace lower in overnight trade. When markets are in risk-off mode, even safe-haven assets like gold and silver see liquidation selling, such as the selling pressure seen overnight. As of 6:30 a.m. CT, corn futures are trading 6 to 9 cents lower, soybeans are 21 to 23 cents lower, winter wheat is 10 to 13 cents lower and spring wheat is around 7 cents lower. Front-month crude oil futures turned sharper lower overnight and are trading about $4.00 lower. The U.S. dollar index is around 1800 points lower.
President Trump’s sweeping tariff announcement: Key details and implications... On Wednesday, April 2, President Donald Trump unveiled an extensive new tariff strategy during a Rose Garden ceremony at the White House. Dubbed “Liberation Day,” the announcement marks a significant shift in U.S. trade policy, intensifying global trade tensions and sparking concerns about inflation and economic disruption. They are the realization of a core pillar of Trump’s 2024 campaign. Link to White House fact sheet. Overall, the import tax rate has shot up to 22% in the past couple months, up from just 2.5% in 2024, reaching the highest levels since around 1910.
Two tiers of tariffs announced… President Trump announced two tiers of tariffs. Baseline tariff: A flat 10% tariff on all goods imported into the United States (except Canada and Mexico), effective Saturday, April 5 at 12:01 a.m. ET. The concept of the baseline tariff was to have a level imposed that will keep countries from trying to circumvent the tariffs by trans-shipping goods through other countries to avoid the higher tariffs. Reciprocal tariffs: Higher tariffs targeting nations with significant trade surpluses or restrictive trade practices against U.S. goods. These tariffs will be calculated at approximately half the rate imposed by those countries on American exports and will take effect on Wednesday, April 9, at 12:01 a.m. ET. These tariffs will be additive, meaning they will be imposed on top of existing tariffs already in place.
Trump announced separate tariff on autos… Additionally, a separate 25% tariff on imported automobiles is set to take effect at 12:01 a.m. ET on Thursday, April 3, though those tariffs were not part of the executive order signed by Trump at the White House April 2.
Special announcement for Mexico and Canada… Mexico and Canada would not be subject to any new tariffs beyond the levies the president had previously announced. Tariffs on Canada and Mexico over fentanyl and migration will continue while those conditions persist. As for goods covered by the U.S.-Mexico-Canada Agreement (USMCA), USMCA-compliant goods will continue to see exemptions relative to those products, and they will continue to see exemptions from the fentanyl-related tariffs.
Early implications of broad-sweeping tariffs… Markets were risk-off overnight, with nearly every asset except bonds lower. Copper was one of the big losers, despite tariffs not applying to the red metal. The selling in copper can be attributed to the implication of lower global economic growth that traders are anticipating. As it stands, tariffs are expected to reignite inflation in the short term while slowing growth, an occurrence known as ‘stagflation.’ The EU and China have both already announced the plan for countermeasures and many other countries are likely to follow suit. Until those announcements are made, a direct impact to agriculture, specifically agricultural exports, is hard to quantify.
Weekly Export Sales Report out this morning... For the week ended March 27, traders expect:
| 2024-25 expectations (in MT) | Last week (in MT) | |
| Corn | 800,000-1,600,000 | 1,039,634 |
| Wheat | (100,000)-300,000 | 100,325 |
| Soybeans | 250,000-800,000 | 338,469 |
| Soymeal | 100,000-300,000 | 165,592 |
| Soyoil | 5,000-40,000 | 44,493 |
U.S. dollar index making fresh lows… The U.S. dollar index plunged to the lowest mark since October of last year overnight. Interest rates rose to the lower level since the same time. Lower rates are expected to lessen demand for the dollar and have led to weakness in currency markets. While that is generally bullish for other assets, this year has seen a divergence from that norm, an occurrence that has not happened since 2008.
Producer prices in Eurozone climb… Industrial producer prices in the Euro Area increased by 0.2% month-over-month in February 2025, following a downwardly revised 0.7% rise and exceeding market forecasts of 0.1%. On an annual basis, producer price inflation surged to 3.0% in February, its highest level since March 2023.
Brazil sugar production to fall… Brazil’s center-south sugarcane crop in 2025-26 is forecast at 605 to 618 MMT, Jose Nogueira, the chief executive of producers’ group Orplana said on Wednesday. That is well below the prior year at 630 to 640 MMT, he said. The sugarcanes crop has been impacted by drought. Brazil crushes most of their sugarcane production, producing ethanol which challenges U.S. corn based ethanol on the world market.
Tariffs expected to raise beef prices… President Trump imposed a 10% tariff on Australian goods while singling out the country’s beef exports for criticism on Wednesday. Australian farmers, traders and industry groups said on Thursday they would pass on any extra costs from tariffs to American consumers, potentially pushing up the prices of hamburgers and steaks. Australia exports around $2.5 billion worth of beef to the U.S. annually, its biggest market.
Cash cattle trade remains slow… As has been the norm in recent weeks, cash cattle trade has had a slow start to the week as feedlots hold out for higher prices and packers kick the can down the road as cutting margins remain deep in the red. Wholesale beef gave up a portion of Tuesday’s big gains yesterday. Choice cutout fell $2.32 to $339.90 while Select sunk $3.24 to $318.83.
Pork cutout plunges… After trading in a range from $95 to $100 for a month and a half, cutout broke below that range Wednesday. Cutout fell $1.81 to $93.70 as all cuts posted losses on the day, though bellies and loins led the way lower.
Overnight demand news... None.
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
- 7:30 a.m. Weekly Export Sales — FAS
- 2:00 p.m. Slaughter Weekly — NASS