Good morning!
Followthrough selling in grains overnight... Corn, soybeans and wheat faced followthrough selling from Monday’s sharp losses during the overnight session. As of 6:30 a.m. CT, corn futures are trading 2 to 3 cents lower, soybeans are 2 to 6 cents lower and wheat futures are mostly 3 cents lower. The U.S. dollar index and front-month crude oil futures are both modestly weaker this morning.
Corn, soybean CCI ratings improve, spring wheat crop declines... USDA rated the corn crop as 74% “good” to “excellent” and 5% “poor” to “very poor,” the soybean crop 66% “good” to “excellent” and 7% “poor” to “very poor” and the spring wheat crop 50% “good” to “excellent” and 15% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop inched up 0.6 point to 382.0 and the soybean crop improved 1.9 points to 363.7, while the spring wheat crop declined 3.8 points to 351.6. The corn crop is now rated 6.7 points above year-ago, while soybeans are still 1.7 points below last year at this time. Spring wheat is 31.9 points below last year. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of July 6:
- Corn: 74% good/excellent (73% last week); 18% silking (15% average); 3% dough (2% average).
- Soybeans: 66% good/excellent (66% last week); 96% emerged (98% average); 32% blooming (31% average); 8% setting pods (6% average).
- Spring wheat: 50% good/excellent (53% last week); 61% headed (58% average).
- Winter wheat: 48% good/excellent (48% last week); 53% harvested (54% average).
- Cotton: 52% good/excellent (51% last week); 48% squaring (49% average); 14% setting bolls (15% average).
Trump’s trade moves... President Donald Trump signed an Executive Order (EO) that extends the effective date on the tariffs announced April 2 to Aug. 1. The tariffs initially were to take effect July 9. The brief order formalizes what Trump and other officials had signaled over the weekend. However, it is not yet clear that Aug. 1 will be a hard and fast deadline. Asked if Aug. 1 was now a firm deadline, Trump again indicated it may not necessarily be the final date. “I would say firm but not 100% firm. If they call up and they say we’d like to do something a different way, we’re going to be open to that.” Reciprocal tariff letters were sent Monday to 14 countries, outlining new tariffs ranging from 25% to 40% set to take effect on Aug. 1 if agreements aren’t finalized. Those facing 25% tariffs include Japan, South Korea, Malaysia, Kazakhstan and Tunisia. Those facing tariffs of 30% to 36% include South Africa, Bosnia, Indonesia, Bangladesh, Serbia, Thailand and Cambodia. Those facing 40% tariffs include Myanmar and Laos. Steel and aluminum tariffs, currently set at a 50% rate as part of the Section 232 sectoral rates, will remain in place but will not stack on top of the new rates. Several other sectoral tariffs are also under investigation but have not yet taken effect. Trump hinted on Truth Social that any retaliatory tariffs would be matched one-for-one.
China warns U.S. on tariffs, threatens retaliation on supply chain deals... China warned the Trump administration against reigniting trade tension by restoring tariffs on its goods next month and threatened to retaliate against nations that strike deals with the U.S. to cut China out of supply chains. China has until Aug. 12 to reach an agreement with the U.S. to avoid additional tariffs. “One conclusion is abundantly clear: dialogue and cooperation are the only correct path,” the official People’s Daily said in a commentary. The paper also took a swipe at regional economies that are considering striking tariff reduction deals with the U.S. that cut China out of their supply chains. “China firmly opposes any side striking a deal that sacrifices Chinese interests in exchange for tariff concessions,” the paper said. “If such a situation arises, China will not accept it and will respond resolutely to protect its legitimate interests.”
Thailand races to avoid 36% U.S. tariff with sweeping trade concessions... Thailand remains optimistic about avoiding a steep 36% U.S. tariff announced by Trump, with officials offering to slash import duties on 90% of American goods to zero. Thailand promised expanded market access for U.S. ag and industrial products, more energy imports and additional Boeing jet purchases — moves aimed at shrinking its $46 billion trade surplus with the U.S. by 70% within five years.
Taiwan dispatches delegation for last-minute U.S. tariff talks... Taiwan has sent a new, smaller team of officials to Washington, as last-ditch negotiations avoid 32% U.S. tariffs on Taiwanese exports if no agreement is reached by Aug. 1. According to Taiwan’s Liberty Times, the unannounced visit signals ongoing talks, but the government has declined to confirm specifics, citing the sensitive nature of discussions. The latest team is reportedly more technical and targeted than previous delegations, reflecting the high-stakes and complex nature of the remaining issues.
Indonesia warns of sharp decline in palm oil exports to U.S. amid tariff threat... Indonesian palm oil exports to the U.S. could drop by as much as 20% if Washington moves ahead with a proposed 32% tariff on Indonesian goods, an industry official told Reuters. Indonesia currently supplies 85% of U.S. palm oil imports. Indonesia’s top trade negotiator is in Washington this week for talks with U.S. officials. Meanwhile, Malaysia’s plantations minister argued that higher tariffs would ultimately be paid by American consumers, pointing out that palm oil has no direct substitute in oleochemical applications.
USDA delays SDRP signup, expects launch later this week... USDA has updated its timeline for the Supplemental Disaster Relief Program (SDRP), moving the expected start date for producer signup from July 7 to later this week. SDRP provides assistance for necessary expenses or crop losses in 2023 and 2024 due to adverse weather events. While enrollment for most losses is now slated to begin in the coming days, USDA continues to target Sept. 15 for signups covering “shallow losses.” including those affecting uninsured producers and losses related to crop quality.
Mexico to open sterile fly plant to combat screwworm in 2026... Mexico’s government said on Monday it has started to build a $51 million facility in the southern part of the country in an effort to combat screwworm. The plant, a joint project with the U.S., will produce 100 million sterile screwworm flies per week once completed in the first half of 2026. The U.S. is paying $21 million of the cost and Mexico is spending $30 million.
CDC ends HPAI emergency as infections subside... The U.S. Centers for Disease Control and Prevention said on Monday it has ended its emergency response for H5N1 highly pathogenic avian influenza (HPAI) due to a decline in animal infections and no reports of human cases since February. The emergency response was deactivated on July 2, the agency told Reuters, adding that surveillance and response for HPAI cases will continue under the purview of its influenza division.
Cash cattle prices don’t fall as much as feared... Cash cattle averaged $229.43 last week, down 8 cents from the previous week. If Monday’s strong gains in cattle futures are extended, cash sources say negotiated prices could be about steady again this week as packer margins are positive.
Cash hog decline accelerates... The CME lean hog index is down $1.18 to $108.33 as of July 3, the fifth straight daily decline during which it has dropped $3.69 from what appears to be the seasonal top of $112.02. Pork cutout rebounded $3.28 to $113.49 on Monday as all cuts firmed, led by an $11.18 jump in primal bellies.
Overnight demand news... Tunisia tendered to buy 50,000 MT of optional origin corn.
Today’s reports
· 1:00 p.m. U.S. Agricultural Trade Data Update — ERS