Good morning!
Corn and wheat rise overnight, soybeans weaken... Corn and wheat futures were supported overnight by lower-than-expected crop condition ratings from USDA, while soybeans faced light pressure. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are around 3 cents lower and wheat futures are 4 to 8 cents higher, with spring wheat leading gains. The U.S. dollar index is more than 100 points higher and front-month crude oil futures are about 50 cents higher.
India offers U.S. ‘deep’ tariff cuts but shields grain and dairy... India has proposed significant tariff reductions to the U.S. to avert a looming 26% reciprocal tariff threatened by President Donald Trump, set to take effect on July 9. While New Delhi is open to lowering duties on various goods, it is steadfast in maintaining high tariffs on critical agricultural sectors, particularly foodgrains and dairy products, according to the Financial Times. Currently, tariffs on U.S. rice range from 70% to 80%, and dairy products face duties between 30% and 60%. In exchange for tariff reductions, India is requesting the U.S. to lower its tariffs on Indian exports from labor-intensive sectors such as textiles, leather and handicrafts. Additionally, India seeks exemptions from U.S. social security payments for its workers on short-term visas, similar to provisions secured in its recent agreement with the UK. Both nations aim to finalize the first phase of a bilateral trade agreement by fall, with a shared goal of doubling their trade volume to $500 billion by 2030. However, negotiations are complex, given contrasting priorities and the political sensitivities involved, particularly concerning agriculture in India and manufacturing in the U.S.
Trump hails EU’s swift response after tariff threat... Trump said Tuesday he was “encouraged” by the European Union’s move to accelerate trade negotiations with the United States, following his threat to impose steep 50% tariffs on EU goods. The latest development suggests renewed urgency in U.S./EU trade diplomacy as tariff escalation looms.
Japan scrambles as U.S. tariff talks stall... Japan is launching a multi-pronged effort to counter the fallout from stalled trade negotiations with the U.S., as steep tariffs — especially on autos — threaten a vital pillar of the nation’s economy. With summer elections looming and public discontent rising, Prime Minister Shigeru Ishiba’s government is injecting a ¥900 billion ($6.3 billion) emergency stimulus package and offering strategic concessions, including advanced shipbuilding cooperation, to regain traction with Trump ahead of the G7 summit.
HRW crop ratings decline, corn and spring wheat CCIs start lower than year-ago... USDA rated the winter wheat crop as 50% “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 dropped 5.4 points to 323.0, as all states except Colorado and South Dakota declined. The SRW CCI rating slipped 0.1 point to 374.7. Click here for details. USDA initially rated the spring wheat crop as 45% “good” to “excellent” and 18% “poor” to “very poor.” On our weighted CCI, that equated to a 328.9 rating, far below last year’s first rating of 378.6, which came one week later. USDA initially rated the corn crop as 68% “good” to “excellent” and 5% “poor” to “very poor.” The corn crop started the growing season with a 373.7 CCI rating, 11.8 points below last year’s initial rating that came one week later.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of May 25:
- Winter wheat: 50% good/excellent (52% last week); 75% headed (70% average).
- Corn: 68% good/excellent; 87% planted (85% average); 67% emerged (60% average).
- Soybeans: 76% planted (68% average); 50% emerged (40% average).
- Spring wheat: 45% good/excellent; 87% planted (80% average); 60% emerged (53% average).
- Cotton: 52% planted (56% average); 3% squaring (4% average).
India limits wheat holdings but avoids imports... India has imposed limits on wheat stocks traders can hold to help boost availability and moderate prices. Traders can hold 3,000 MT of wheat, while retailers can stock up to 10 MT, according to a government notification. India’s wheat harvest has exceeded expectations, allowing the country to avoid imports in 2025 despite widespread market speculation to the contrary. State-run Food Corporation of India has already purchased nearly 30 MMT of wheat from domestic producers — the highest in four years — and is on track to surpass 32 MMT. India also raised the prices at which it will buy new-season common rice paddy and other crops from farmers.
Australia wheat plantings near steady with year-ago... Australian farmers are set to plant a similar area to wheat as last year, while increasing barley and reducing canola plantings. The median estimate for Australia’s wheat planting shows no change from last year, according to a Reuters poll, as high fertilizer costs and prices near five-year lows discourage more acreage. Barley seedings are expected to rise by 2% and canola to decline by 5%, although some forecasts suggest much larger shifts for both crops. Eastern and some western cropping areas of the country have received ample rain but there is a lack of soil moisture in South Australia, Victoria and parts of Western Australia.
USDA expands screwworm eradication efforts with major investment in Mexico... USDA Secretary Brooke Rollins announced a significant escalation in efforts to fight the New World Screwworm (NWS) through a strengthened bilateral strategy with Mexico. USDA will invest $21 million to modernize a fruit fly facility in Metapa, Mexico, which will be converted to produce 60 million to 100 million sterile NWS flies per week — dramatically expanding current capacity and enhancing the reach of the sterile insect technique (SIT). The flies will complement current operations from the COPEG facility in Panama, which is already operating at full capacity with 44 weekly release flights. USDA will continue to evaluate the current suspension of live animal imports from Mexico every 30 days.
Brazil finds HPAI in wild bird, investigates potential commercial outbreak... Brazil identified a fresh outbreak of highly pathogenic avian influenza (HPAI) in wild birds in the city of Mateus Leme, Minas Gerais. The ag ministry also said authorities were investigating a potential new case on a commercial flock in the city of Anta Gorda, Rio Grande do Sul, the same state where a previous outbreak happened. Brazil is currently investigating about a dozen of potential outbreaks of HPAI, but only two, including the one in Anta Gorda, are on commercial farms. Brazil is negotiating with the U.S. and EU to limit animal disease trade bans to affected regions, its chief veterinarian said on Tuesday, expressing strong confidence in reaching deals as HPAI disrupts Brazilian poultry exports.
USDA beefs up state’s meat, poultry inspection — with a warning... USDA will distribute $14.5 million in reimbursements to state-run meat and poultry inspection programs. Rollins emphasized the Trump administration’s commitment to supporting the nation’s food supply chain. However, USDA also issued a warning: “This is not a sustainable path forward. Policymakers across the federal government should come together to think through ways to continue these critical state meat and poultry inspection programs.” While the immediate funding boost will help states maintain vital inspection services, USDA and Rollins are calling on Congress and policymakers to find a lasting solution for the future of state meat and poultry inspection programs.
Cash cattle continue historic rise... Cash cattle averaged a record $226.97 last week. That was the sixth straight weekly increase and the fifth consecutive record price. Wholesale beef prices were mixed on Tuesday, with Choice up 30 cents to $361.85 and Select down 49 cents to $350.83. Packer margins have improved but remain deep in the red.
Cash hog fundamentals continue seasonal climb... The CME lean hog index is up another 11 cents to $93.05 as of May 23, extending the seasonal climb. Pork cutout also firmed $2.27 to $103.73 on Tuesday, fueled by a $7.48 rise in primal bellies, rising to the highest level since early November.
Overnight demand news... Taiwan purchased 65,000 MT of corn expected to be sourced from Brazil.
Today’s reports
- 1:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS