Good morning!
Followthrough buying in grains overnight... Corn, soybeans and wheat extended recent gains, with SRW wheat futures reaching a four-week high. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents higher, soybeans are 7 to 8 cents higher and wheat futures are 3 to 4 cents higher. The U.S. dollar index is about 525 points lower and front-month crude oil futures are around 50 cents higher.
China adopts multiple measures in response to scorching heatwave... A heatwave sweeping across northern China prompted authorities to issue alerts and roll out measures to ensure water supply and protect food production. The National Meteorological Center issued a yellow alert – the third highest – warning temperatures could exceed 40 degrees Celsius (104 F) in parts of Shaanxi, Shanxi, Henan and Hubei provinces and persist through Thursday. Technicians are deploying drones equipped with sensors to monitor fields, assessing leaf water content and soil moisture to guide efficient irrigation. Officials are also guiding farmers in using light, targeted irrigation techniques to water their crops effectively, closely monitoring reservoir storage levels and optimizing water allocation plans. Much of China’s winter wheat crop in these areas is in the peak grain-filling stage.
Argentina extends tax break on wheat, barley exports... Argentina will extend a tax break on wheat and barley exports that was set to expire at the end of June. The tax on wheat and barley will remain at 9.5% through March 2026. However, export tax breaks for corn, soybeans/soy products, sorghum and sunflowers will not be extended. Export taxes will return to 12% for corn (9.5% currently), 33% for soybeans (26%) and 31% for soyoil and soymeal (24.5%) as of July 1.
RFK Jr. says MAHA report won’t target ag practices... Health and Human Services Secretary Robert F. Kennedy Jr. told lawmakers Tuesday the forthcoming “Make America Healthy Again” (MAHA) report will not disparage American farmers or widely used agricultural chemicals such as glyphosate. Testifying before a Senate Appropriations subcommittee, Kennedy pushed back against Republican concerns that the MAHA Commission’s findings would unfairly criticize modern farming. Kennedy said, “The drafts that I’ve seen, there is not a single word in them that should worry the American farmer.” The MAHA Commission report is set for release on Thursday. Kennedy declined to preview recommendations, urging lawmakers instead to review the full document once published.
Deal pushes reconciliation bill closer to House floor vote... The House Rules Committee worked through the night and into Wednesday morning on a sweeping legislative package backed by President Donald Trump that includes a debt ceiling increase, tax cuts, Medicaid restrictions, and a decade-long path to spending reductions. Majority Leader Steve Scalise (R-La.) said just after midnight that negotiators had struck a deal with key Republican holdouts over changes to the 2017 cap on the federal deduction for state and local taxes (SALT) — a major sticking point. The last-minute compromises will be packaged in a manager’s amendment, which had not yet been released as of early this morning. Committee debate is expected to continue for several more hours before a vote on advancing the bill to the House floor. GOP leaders acknowledged the bill faces significant uncertainty in the Senate, where changes are likely.
NASS to scale back some granulated state/regional crop progress data... In Monday’s Crop Progress Report, NASS included this special note: “Beginning on May 30, 2025, NASS will no longer generate publications tailored specifically to individual states or regions. There is no impact on state-level data as it will continue to be available in the national releases and through NASS’s public online database, Quick Stats.” Anthony Prillaman, Acting Chief of the Crops Branch at NASS told us, “This would include the state and regional weekly Crop Progress reports historically released by our regional field offices. The only exception would be for situations where we have existing project agreement in place that requires us to publish state or regional reports as part of the agreement. This change does not impact the availability of the state or regional level data. National releases, and our Quick Stats database, will continue to contain comprehensive state and regional information.”
White House economist downplays tariff-driven inflation risks... White House Chief Economist Stephen Miran said the impact of rising tariffs on U.S. inflation is likely to be minimal and short-lived, countering warnings from Federal Reserve officials about potential price pressures. Speaking on Bloomberg Television, Miran emphasized that imports make up only 14% of the U.S. economy and suggested that the administration’s ongoing tariff regime has not produced meaningful inflationary effects. Miran, a former hedge fund strategist, noted that U.S. companies have options to source goods domestically or pivot to “countries that treat us better,” reducing inflationary risk. He acknowledged the potential for short-term volatility but insisted that over time the U.S. will “force the burden of the tariffs onto other countries.” Still, Fed officials remain cautious. Chair Jerome Powell recently said President Trump’s new tariffs could be “short lived” but might also prove “more persistent,” prompting the central bank to hold off on interest rate cuts for now.
UK inflation jumps to 15-month high... British consumer inflation jumped to a 3.5% annual gain in April, the highest since January 2024. The 0.9-point jump from March was the largest annual increase between two months since 2022. Core inflation, excluding energy, food, alcohol and tobacco prices, rose 3.8% annually from a 3.4% increase the previous month. The hotter-than-expected inflation is causing investors to bet on the Bank of England slowing its already gradual pace of interest rate cuts.
Senate to vote on blocking California gas car ban... The Senate is preparing to vote today on a bill to revoke federal waivers allowing California to enforce a ban on the sale of new gasoline-powered cars by 2035. The measure, already passed by the House on May 1 with bipartisan support, challenges California’s authority to impose vehicle emissions standards stricter than federal rules. While once supported by the auto industry, key manufacturers like General Motors have reversed course, citing sluggish electric vehicle sales, cost concerns and tight timelines. Industry groups warn the mandate could shrink consumer choice and raise vehicle prices, especially as trade tensions and tariffs strain global supply chains.
Genetic tests show Brazil’s HPAI outbreak on commercial poultry farm and zoo share same strain... Results of genetic tests suggested Brazil’s first outbreak of highly pathogenic avian influenza (HPAI) on a commercial poultry farm in the state of Rio Grande do Sul shares the strain with cases in zoo animals in the same state, an official told Reuters. But a director at the state’s agriculture department said is not yet possible to ascertain a direct relation between the two outbreaks.
Wholesale beef continues to firm... Wholesale beef prices rose another $3.94 for Choice to $358.75 and 85 cents for Select to $344.96 on Tuesday. With packers’ near-term inventory the best it has been in weeks, their focus will be on improving margins by halting the surge in cash prices while continuing to strengthen wholesale values.
June hogs chopping around $100 mark... June lean hog futures continue to chop in a roughly $5.00 band around the $100.00 mark, with Tuesday’s close just a tick above that level. The CME lean hog index is up another 39 cents to $91.85 as of May 19. While the cash index is climbing seasonally, traders are hesitant to build in too much premium.
Overnight demand news... Algeria tendered to buy up to 80,000 MT of optional origin corn.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Farm Labor — NASS
- 2:00 p.m. Milk Production — NASS