Good morning!
Corrective buying in grains overnight... Corn, soybeans and wheat firmed amid corrective buying overnight as traders covered some short positions in preparation for next Monday’s Acreage and Grain Stocks Reports from USDA. All three markets are still poised for sharp losses for the week. As of 6:30 a.m. CT, corn futures are trading 5 to 6 cents higher, soybeans are mostly a nickel higher and wheat futures are 3 to 5 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly firmer.
Details ironed out on U.S. rare earths deal with China... Washington reached an agreement with China on how to expedite rare earth shipments to the United States. Commerce Secretary Howard Lutnick said, “They’re going to deliver rare earths to us” and once they do that “we’ll take down our countermeasures.” China confirmed details of a trade framework with Washington, echoing Lutnick’s comments. Officials from both countries have maintained close contact after holding trade talks in London earlier this month, a spokesperson for China’s commerce ministry said.
Lutnick: 10 trade deals imminent... Lutnick told Bloomberg Television that President Donald Trump is prepared to finalize a series of trade deals within the next two weeks. “We’re going to do top 10 deals, put them in the right category, and then these other countries will fit behind,” Lutnick stated. While he didn’t specify which countries would be part of this initial wave, Trump had previously said a “very big” trade deal could be signed soon that would “open up” India’s market to American business, as negotiators meet in Washington to break a recent deadlock over key issues. The White House signaled the July 9 deadline for trade negotiations is “not critical,” emphasizing Trump’s authority to unilaterally set tariff rates if U.S. trading partners do not present acceptable agreements.
EU weighs lower tariffs on U.S. goods to secure Trump trade deal... The European Union is actively considering cutting tariffs on a range of U.S. imports as part of a strategy to quickly clinch a trade deal with President Trump, according to reports. EU leaders met in Brussels on Thursday evening to debate how far they are willing to go to win over the Trump administration, with options including reducing nontariff barriers, increasing purchases of American goods like liquefied natural gas and cooperating with the U.S. on economic concerns about China. The pace of negotiations has accelerated following Trump’s threat in May to impose 50% tariffs on the EU, a move he paused to allow talks to continue until July 9. Many European officials now believe Trump’s 10% baseline tariffs are likely to remain and are seeking product-specific exemptions to limit the economic impact. Germany and Italy are leading a push for a rapid preliminary agreement that could be expanded in future negotiations, focusing especially on relief for industries hardest hit by existing tariffs — such as cars, chemicals, machinery and steel. However, some member states are wary of signing an agreement seen as overly favorable to the U.S., and differences persist over U.S. demands for changes to EU digital and environmental regulations. The EU is also preparing potential countermeasures, with an approved package of tariffs targeting $24 billion in U.S. imports and a second list in development that could reach $102 billion if negotiations collapse. Bottom line: Whether a deal is reached will likely hinge on Trump being able to declare a political victory and EU member states agreeing on the scope and substance of the final compromise.
Canadian planted acreage estimates out this morning... Statistics Canada will release acreage estimates for Canadian principal crops at 7:30 a.m. CT. Analysts expect spring wheat plantings of 19.2 million acres, which would be up 300,000 acres from last year but 200,000 acres less than March intentions. Canola acreage is expected to be 21.7 million acres, down 300,000 acres from last year but up 100,000 acres from spring intentions.
India’s monsoon rains arriving earlier than normal... India’s annual monsoon rains are set to cover the entire country within the next three to four days, over a week ahead of their typical schedule, two senior weather officials said. In a typical year, rains hit the southwestern coastal state of Kerala around June 1 and move northwards to cover the entire country by July 8. After stalling for two weeks, the monsoon regained momentum last week and rapidly covered central India and most northern states, the India Meteorological Department (IMD) said. India is likely to see above-average monsoon rains for the second straight year in 2025, according to an IMD forecast released last month.
Senate parliamentarian clears key SNAP and cost-share reforms... The Senate parliamentarian has approved the Ag Committee’s revised provisions for state cost-share and SNAP eligibility for non-citizens, confirming they comply with the Byrd rule and may proceed as part of budget legislation. The updated plan gives states flexibility to use either their fiscal year (FY) 2025 or 2026 payment error rate to determine their cost-share requirement starting in FY 2028, shifting in later years to a rolling formula based on the rate from three years earlier. States with payment error rates above 6% will be required to contribute a set share of SNAP benefit costs, with error rates published annually each June. The reforms aim to incentivize states to improve program accuracy and ensure resources are directed to those most in need. Of note: The Senate Ag Committee’s updated farm bill plan would reduce federal agriculture spending by about $186 billion — most of it from SNAP. This figure is less than the initial $211 billion proposed cut but still far exceeds the committee’s original $1 billion savings target. Meanwhile, the House Ag Committee is pursuing even deeper reductions, totaling $295 billion. The Senate is awaiting a final cost estimate from the Congressional Budget Office to determine the exact savings impact.
House members press Senate to align 45Z credit with its version... A bipartisan group of seven House lawmakers from Iowa, Minnesota and Ohio is urging the Senate Finance Committee to revise its Clean Fuel Production Credit (45Z) language in the reconciliation package to match provisions passed by the House. In a letter obtained by Politico, the lawmakers call for the Senate to prevent the 45Z credit from being claimed for fuel produced using imported feedstocks from outside USMCA countries, and to add a bonus for sustainable aviation fuel (SAF). “The House-passed provisions strike the right balance by upholding U.S. trade and energy interests, supporting rural economies and domestic producers, and prioritizing investment in emerging technologies like SAF that can keep America at the forefront of global energy leadership,” the letter states.
Japan’s tariffed rice imports surge in May... Private sector Japanese tariffed rice imports totaled 10,605 MT in May, 3.5 times the total volume brought in during all of fiscal year 2024. The U.S. accounted for 7,894 MT (74.4%) of the total. Japan imports 770,000 MT of rice annually tariff-free under its World Trade Organization commitment. Of that, up to 100,000 MT is used for human consumption. Rice imports outside this quota are subject to a tariff of 341 yen per kg.
Euro zone economic sentiment weakens in June... The euro zone economic sentiment indicator edged down to 94 in June from a 94.8 reading the previous month. The decline was primarily driven by reduced confidence in the industrial sector, though confidence was also weaker among retailers and consumers. Sentiment improved for the services sector and contractors.
U.S. hog herd unexpectedly expands... The combination of slightly bigger-than-expected spring pig crop and revisions to market hog inventories from the previous two quarters pushed the June 1 hog herd up 0.3% from year-ago. Analysts expected a 0.4% contraction. The data was mildly negative compared to pre-report expectations, though more psychological than fundamentally changing. But there could be some profit-taking and long liquidation given the strong seasonal runup in futures. Click here for details.
Cash cattle trade at lower prices... Cash cattle trade got underway late Thursday, with prices reported in a wide range from as low as $222.00 in the Southern Plains to as high as $232.00 in the northern market. Cash prices will be down for the week, but sales volume and the average price remain uncertain given the wide range and varied level of interest from both packers and feedlots.
Overnight demand news... South Korea purchased 82,000 MT of U.S. milling wheat via two separate tenders.
Today’s reports
- 7:30 a.m. Canadian Acreage — STATSCAN
- 1:00 p.m. Livestock and Meat Domestic Data — ERS
- 2:00 p.m. Agricultural Prices — NASS
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC