Good morning!
Corn and beans weaker, winter wheat rebounds... Corn and soybeans faced price pressure during the overnight session, while winter wheat futures have firmed this morning. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 2 to 3 cents lower, winter wheat markets are 2 to 4 cents higher and spring wheat is 5 to 6 cents lower. The U.S. dollar index is around 300 points higher and front-month crude oil futures are more than $1.00 lower.
Bessent: China must act to ease trade tensions; negotiations smoother with others... Treasury Secretary Scott Bessent in a CNBC interview said it’s up to China to de-escalate trade tensions, citing the 5-to-1 U.S. trade deficit and warning current 145% (China) and 125% (U.S.) tariff levels are unsustainable. Bessent described U.S./China talks as unclear and slow, noting no confirmed communication between presidents Donald Trump and Xi Jinping. However, progress is faster with other countries. Bessent highlighted strong advances with India, Japan and South Korea, with a U.S./India trade deal possibly just weeks away.
China vows to stand strong against ‘bully’ Trump... China’s top diplomat warned countries against caving to U.S. tariff threats, as the Trump administration hints at the possible use of new trade tools to pressure Beijing. Chinese Foreign Minister Wang Yi said appeasement will only embolden the “bully” at a BRICS meeting on Monday, rallying the group of emerging-market nations to fight back against U.S. tariffs. The stern remarks show China intends to resist pressure to enter trade talks even as Bessent suggested Washington could ban certain exports to China to gain leverage.
Trump administration eases auto tariffs to protect U.S. manufacturing... Adjustments were made to recently imposed automotive tariffs, aiming to lessen their impact on U.S. car manufacturers. Key changes include easing duties on foreign parts assembled domestically, preventing the “stacking” of tariffs on vehicles and raw materials, and offering partial reimbursement — up to 3.75% of a vehicle’s value — for tariffs already paid. While the 25% tariff on imported cars and parts remains, the modifications are designed to prevent supply-chain disruptions, avoid sharp consumer price increases and give automakers time to expand U.S. operations.
HRW CCI rating jumps on Kansas improvement, SRW crop slips... USDA rated the winter wheat crop 49% “good” to “excellent” and 19% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 9.2 points to 325.0, fueled by a 5.4-point jump in top producer Kansas. The SRW rating dropped 1.5 points as slight declines in Michigan, Ohio, North Carolina and Arkansas offset modest improvements in the other states. Click here for more details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 27:
- Winter wheat: 49% good/excellent (45% last week); 27% headed (22% average).
- Corn: 24% planted (22% average); 5% emerged (4% average).
- Soybeans: 18% planted (12% average).
- Spring wheat: 30% planted (21% average); 5% emerged (5% average).
- Cotton: 15% planted (14% average).
Cordonnier raises Argentine crop forecasts... South American crop consultant Dr. Michael Cordonnier raised his Argentine soybean and corn production forecasts 1 MMT each to 50 MMT and 49 MMT, respectively. Soybeans yields are increasing and coming in stronger than expected. Corn yields declined over the past week but are expected to improve on later-harvested acres. Cordonnier left his Brazilian production forecasts at 169 MMT for soybeans and 125 MMT for corn, though he has a higher bias toward the corn crop as weather is favorable for safrinha production.
China aims to slash grain, soymeal use in livestock feed... Grain use in China’s total feed consumption is expected to fall to around 60% by 2030, with soybean meal usage reduced to about 10%, the ag ministry said, as part of a broader push to reduce reliance on soybean imports. The ministry also expects a more than 7% drop in feed consumption per kilogram of animal products in standardized large-scale farming by 2030, compared to 2023. China will push to reduce and replace feed grains, aiming to lower feed use in livestock production, cut costs and boost efficiency. China plans to expand the use of non-grain feed resources, such as microbial protein, food waste, insect protein and animal-based protein, aiming for over 10 MMT of capacity by 2030. The ministry also pledged to continue optimizing pig production, develop efficient poultry systems and promote integrated dairy farming projects led by family farms and cooperatives.
U.S. secures water deal with Mexico, easing crisis for Texas farmers... USDA Secretary Brooke Rollins announced a major breakthrough with Mexico to meet immediate water needs for Texas farmers under the 1944 Water Treaty. Following high-level negotiations backed by President Trump, Mexico agreed to transfer water from international reservoirs and boost U.S. water shares in six Rio Grande tributaries through October 2025. The deal includes monthly transfers and consultations to enforce compliance.
U.S., Mexico reach agreement to combat screwworm outbreak... The U.S. and Mexico reached an agreement on the handling of New World screwworm, Rollins said late Monday. Rollins noted the two countries reached “a good solution” and promised details soon. Through a social media post, Mexico’s Secretary of Agriculture, Julio Berdegué, also confirmed that measures to contain and eradicate screwworm were satisfactorily addressed.
Euro zone economic sentiment declines in April... The economic sentiment indicator for the euro zone fell to 93.6 in April, down from a revised 95.0 for March and the lowest reading since December, reflecting a broad-based decline in confidence across all sectors. Consumer sentiment dropped sharply (-16.7 vs. -14.5 in March), alongside declines among service providers (1.4 vs. 2.2), retailers (-8.9 vs. -7.0), manufacturers (-11.2 vs. -10.7) and construction firms (-4.3 vs. -3.7).
Pork demand, packaged meat fuel Smithfield’s Q1 results... Smithfield Foods posted higher first-quarter sales and profit, helped by strong demand for its packaged meats and pork businesses. The company’s fresh pork sales increased 4.9% from year-ago in the first quarter, while packaged meat sales rose 1.2%. Smithfield has kept a tight lid on its expenses through workforce reduction and exiting certain farm operations to reduce its hog production business at a time of higher input costs.
Record cash cattle prices, historically low slaughter... Cash cattle prices averaged a record $216.32 last week, topping the previous high from the week ended March 21 by $3.56. Last week’s 555,000 head slaughter was the smallest for that week except for Covid in modern history. Packers are expected to keep slaughter levels historically low, despite May typically being one of the larger slaughter months of the year, as they deal with highly negative margins.
Cash hog index continues to rise, pork cutout slips... The CME lean hog index is up another 64 cents to $88.18 as of April 25, the eighth straight daily rise. Pork cutout slipped 42 cents to $97.62 on Monday as all cuts except hams and picnics weakened.
Overnight demand news... South Korea purchased 66,000 MT of corn to be sourced from the U.S., South America or South Africa and up to 65,000 MT of optional origin feed wheat. Taiwan tendered to buy 65,000 MT of U.S. corn.
Today’s reports
- 1:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Meat Animals - Prod., Disp., and Income — NASS
- 2:00 p.m. Milk - Prod., Disp., and Income — NASS
- 2:00 p.m. Poultry - Production and Value — NASS