Good morning!
Beans strengthen amid eased trade rhetoric with China... Soybeans built on Tuesday’s gains during overnight trade, while corn faced light followthrough selling and wheat chopped around unchanged. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 4 to 5 cents higher, winter wheat markets are 1 to 3 cents lower and spring wheat is unchanged to a penny higher. The U.S. dollar index is up around 300 points, front-month crude oil futures are about 60 cents higher and gold is more than $70.00 lower.
Trump floats ‘substantial’ China tariffs cuts... President Donald Trump said the current 145% tariffs on China “will come down substantially, but it won’t be zero.” Treasury Secretary Scott Bessent said earlier on Tuesday he believes a trade deal with Beijing can be reached. China’s foreign ministry signaled Beijing is willing to discuss tariffs with the U.S. but won’t do so under continued threats from the Trump administration. “China’s attitude towards the tariff war launched by the U.S. is quite clear: we don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open,” a foreign ministry spokesperson said.
White House nears tariff frameworks with Japan, India... The White House is preparing to unveil non-binding trade frameworks with Japan and India to delay steep tariffs and show diplomatic progress before a looming July deadline. These are not comprehensive trade deals, but memorandums of understanding designed to signal momentum while leaving core issues unresolved, Politico reports. The U.S. and India agreed to a negotiation roadmap, but specifics remain unclear. Failure to progress could trigger tariffs up to 26%. Talks with Japan are progressing cautiously; Tokyo resists rushed concessions, with more meetings scheduled.
U.S. will push UK to relax rules on ag imports, including beef... The U.S. is preparing its terms for trade negotiations with the United Kingdom, the Wall Street Journal reported, citing people familiar with the plans, aiming for London to reduce levies and other non-tariff barriers on a variety of U.S. goods. Washington will push the UK to relax rules on agricultural imports from the U.S., including beef, and revise rules of origin for goods from each nation, the people said. The U.S. also will aim for the UK to reduce its automotive tariff from 10% to 2.5%.
Trump says he has ‘no intention’ of firing Powell... President Trump said he is not planning to fire Federal Reserve Chair Jerome Powell. “I would like to see him be a little more active in terms of his idea to lower interest rates… but, no, I have no intention to fire him,” Trump said. Trump’s softer tone on Powell came after he recently lashed out at the Fed chair. Trump has privately raised the possibility of firing Powell to advisers in recent months. Last week, he expressed confidence that he had the authority to oust Powell.
PP issues amid the $10 billion ECAP program... If farmers have a question regarding why USDA did not or may not release the Emergency Commodity Assistance Program (ECAP) payments on some prevent-plant (PP) acres, it is because the policy is still under USDA review. Talks with government officials point to a complex process in deciding which PP acres qualify for ECAP payouts, involving reviews of crop insurance claims, FSA reporting and compliance with program rules. Another issue is that if all pending PP inquiries are paid out (unlikely), the additional 15% ECAP payments would be called into question.
India boosts palm oil imports after price drop makes it cheaper than soyoil... India, the world’s largest palm oil importer, has resumed significant buying after a five-month lull, as falling prices made palm oil more attractive than rival soyoil. Crude palm oil is now offered at about $1,050 per metric ton CIF for May delivery, versus $1,100 for soyoil. With inventories depleted, imports are set to rebound above 500,000 MT in May and could surpass 700,000 MT monthly from July to September.
CME Group force majeure for CBOT wheat stations on Ohio River... CME Group said on Tuesday that force majeure was no longer in effect at Chicago Board of Trade wheat shipping stations along the Ohio River. Loading was possible at a majority of Ohio River delivery points after recent flood waters receded.
Japan auctions more rice reserves... Japan auctioned another 100,000 MT of 2022-crop rice from state reserves in an attempt to stabilize prices. The Japanese government pledged to release additional stockpiles until July to ease prices, which have risen for 15 consecutive weeks.
Hong Kong suspends some U.S. poultry meat imports due to HPAI... Hong Kong suspended imports of poultry meat from Franklin County, Pennsylvania after an outbreak of highly pathogenic avian influenza (HPAI). The country also suspended poultry meat imports from the Rawicki District of Wielkopolskie Region in Poland due to HPAI.
Beef plants continue to slow slaughter runs... Beef packers are expected to slaughter roughly 565,000 head of cattle this week, the fourth straight week of historically low numbers for April and the smallest for this week since 2015. Cattle feeders have also slowed turnover rates to a record low, pushing up slaughter weights as they try to take advantage of high cash prices by adding more pounds to carcasses.
Cash hog index continues to strengthen... The CME lean hog index is up another 37 cents to $86.08 as of April 21, marking the fourth straight daily rise. Following Tuesday’s strong gains, May hogs finished $6.145 above today’s quote, while June hogs held a $14.195 premium.
Overnight demand news... South Korea tendered to buy 50,000 MT of U.S. milling wheat. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Livestock Slaughter - Annual — NASS