Good morning!
Quiet overnight grain trade... Corn and soybeans tried to work higher on corrective buying at points overnight but are near unchanged this morning. Wheat posted modest corrective gains overnight. As of 6:30 a.m. CT, corn futures are trading around a penny lower, soybeans are 1 to 2 cents lower and wheat futures are unchanged to a penny higher. The U.S. dollar index is around 130 points higher and front-month crude oil futures are modestly firmer.
Trump reiterates BRICS tariffs coming ‘pretty soon’... President Donald Trump said on Tuesday the U.S. would “pretty soon” charge a 10% tariff on imports from BRICS countries, reiterating a threat he made on Sunday, without providing a specific date. Trump said, “BRICS was set up to degenerate our dollar and take our dollar ... take it off as the standard. And that’s okay if they want to play that game, but I can play that game too.” Trump said losing the dollar’s role as the world’s reserve currency would be like “losing a war, a major world war. We would not be the same country any longer.”
Canada on Trump’s trade playbook: No rules, just power plays... Tony Keller of The Globe and Mail warns Canada that Trump’s hardball tariffs signal the end of win-win deals and a new era of “I win, you lose” — with Canada next in line. Keller said Trump is “replacing international trade law with sketches on the back of a wet cocktail napkin.” The new approach is all about raw leverage and punishing tariffs, with little regard for established rules or relationships. Keller writes that, despite some Canadians’ belief that Prime Minister Mark Carney exaggerated the threat from Trump during the last election, Trump “continues to prove that he really does mean to break eggs, make omelets and eviscerate the rules of global trade.” This, he warns, could hit Canada harder than any other country because of its geographic and economic ties to the United States. Keller warns, “International trade law is being rewritten with sketches on the back of a wet cocktail napkin… Nobody can say for sure how far Mr. Trump will go. But there’s no denying which way his compass is pointing.”
Rollins: ‘No amnesty’ for migrant farm workers... USDA Secretary Brooke Rollins made clear during a press conference on Tuesday there will be “no amnesty” for undocumented migrant farm workers. She stated that mass deportations of undocumented farm laborers would continue but emphasized these would be conducted in a “strategic and intentional way” to avoid jeopardizing the nation’s food supply. Rollins reiterated that Trump has been “unequivocal” on this point, and that the administration is committed to ensuring a transition toward a 100% American workforce in agriculture. Rollins also addressed the role of Medicaid recipients in the future agricultural workforce. She pointed to the 34 million able-bodied adults enrolled in Medicaid as a potential labor pool, particularly as new work requirements under the recently enacted One Big Beautiful Bill Act begin to take effect. Rollins suggested that these individuals could help fill the labor gap created by the deportation of undocumented workers.
Rush of Argentine soymeal exports to China not likely... Argentina’s first 30,000 MT shipment of soymeal to China is seen as a test for potentially more exports. However, there are major headwinds before it could be turned into a meaningful trade. “If they’re buying from Argentina, it’s a good sign,” analyst Lorena D’Angelo based in farm hub city Rosario told Reuters. “However, it’s more political than market-related.” China is a small buyer of soymeal, instead opting to import large volumes of soybeans and crush them domestically.
Ukraine’s grain/oilseed exports expected to rise... Ukraine’s combined grain and oilseed crop production is expected to reach 83.1 MMT this year, Ukrainian grain traders union UGA said. That would allow the country to export a combined 50 MMT of grains and oilseeds in 2025-26, up from 46.7 MMT in the just completed 2024-25 marketing year.
Red Sea shipping insurance costs surge... Ship insurance prices in the Red Sea have jumped sharply after Houthi militants carried out their first assault since December. The renewed attack, which took place on Sunday, has reignited concerns over maritime security and the potential for escalating conflict in the region. Insurers responded by raising war risk premiums for vessels transiting the area, adding to operating costs for shipping companies already under strain from previous disruptions. Industry analysts warn that further attacks could lead to more rerouted traffic and higher costs, impacting global supply chains. The move underscores the fragile security environment in the Red Sea corridor, a crucial route for global trade.
EPA hears wide-ranging testimony on RFS volume proposals... During a full-day hearing on Tuesday, stakeholders from across the energy, agriculture and environmental sectors voiced strong and often divergent opinions on EPA’s proposed Renewable Volume Obligations (RVOs) for 2026 and 2027. Leaders from the Renewable Fuels Association (RFA), Growth Energy, and the American Coalition for Ethanol (ACE) praised the proposed RVOs, particularly the maintenance of 15 billion gallons for conventional renewable fuels. They argued these targets would provide market certainty, support U.S. farmers, bolster rural economies, and encourage further investment in biofuel infrastructure. Industry representatives also welcomed provisions to reallocate volumes lost to small refinery exemptions and to reduce credits for imported fuels, which they say will reinforce domestic agriculture. The Clean Fuels Alliance America highlighted the growth in domestic biodiesel and renewable diesel production, urging EPA to maintain strong volume targets, citing substantial industry investments and the need for consistent policy to support continued expansion. Environmental organizations, including Earthjustice, criticized EPA’s approach, warning that higher mandates for crop-based biofuels could drive large-scale land conversion, harm biodiversity and potentially increase greenhouse gas emissions. EPA will consider the testimony and written comments before finalizing the RVOs later this year.
Expiring federal EV tax credits... The federal tax credits that have helped millions of Americans afford electric vehicles (EVs) are set to expire after Sept. 30, 2025, under the One Big Beautiful Bill Act. The $7,500 credit for new or leased EVs and the $4,000 credit for used EVs will both end, raising costs for consumers and sparking warnings from climate advocates about stalled progress on clean energy. Industry experts expect a rush to purchase EVs ahead of the deadline, but warn that prices will rise significantly once the credits are gone — potentially slowing EV adoption.
China’s factory-gate deflation worsens... China’s producer prices shrank 3.6% from year-ago in June, marking the 33rd consecutive month of factory-gate deflation and the steepest fall since July 2023, driven by uncertainty over U.S. tariffs and persistently weak domestic demand. China’s consumer prices inched up 0.1% from year-ago in June, the first annual increase in consumer inflation since January. Food prices declined 0.3%, the fifth straight monthly decline. Pork prices plunged 8.5% after rising 3.1% in May, driven by growing domestic supply and weak consumer demand.
Cash cattle expectations perking up... The combination of surging cattle futures and strong packer margins are building hopes cash cattle prices may be steady at worst this week following three straight weeks of decline. Despite the strong margins and light purchases the past two weeks, packers have been slow to establish bids this week, suggesting any significant cash trade won’t come until late in the week.
Cash hog fundamentals weaken... The CME lean hog index is down another $1.00 to $107.33 as of July 7. Pork cutout fell $1.48 to $112.01 on Tuesday as all cuts declined, led by a $5.27 drop in butts. Packer margins are solidly in the red, suggesting the pullback from seasonal highs in the cash and product markets will continue as slaughter supplies gradually start build.
Overnight demand news... South Korea passed on a tender to buy up to 69,000 MT of corn from the U.S., South America or South Africa. Iran tendered to buy 60,000 MT each of corn (sourced from Brazil, Europe or the Black Sea region) and soymeal (sourced from Brazil or Argentina).
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS