Good morning!
Grains firmer overnight... Corn and soybeans extended this week’s corrective rebounds overnight, while wheat followed to the upside. As of 6:30 a.m. CT, corn futures are trading mostly 6 cents higher, soybeans are 12 to 13 cents higher, winter wheat markets are 8 to 11 cents higher and spring wheat is around 4 cents higher. The U.S. dollar index is around 450 points lower and front-month crude oil futures are about 65 cents higher.
Heat to build over the next week, some crop stress likely... Changes are coming to the weather pattern that will produce hotter temps and high relative humidity across areas of the U.S. through next week, inducing some crop stress. World Weather Inc. says hot temperatures are likely in the Central and Southern Plains, Delta, lower Midwest and interior southeastern states from this weekend through the end of next week, with heat indices of 95 to 115 likely. A westward shift in the heat and dryness is likely in the last days of July, allowing some cooling and rainfall back into the lower Midwest and southeastern states. Northern and eastern Midwest crop areas will be sufficiently moist to carry on normal crop development during the next two weeks.
Indonesia, U.S. still hammering out trade deal details... Indonesia and the U.S. are still negotiating the specifics of a bilateral trade agreement, despite both sides confirming a deal has been reached in principle. According to Susiwijono Moegiarso, a senior official at Indonesia’s economic ministry, talks are ongoing over potential exemptions from the 19% U.S. tariffs on Indonesian goods such as cocoa, rubber, crude palm oil, coffee and nickel. In return, Indonesia has agreed to exempt U.S. tech products from local content rules. However, the treatment of U.S. exports to Indonesia remains partly unclear. Susiwijono noted that alcoholic beverages and pork would no longer benefit from a zero-tariff status, though he did not specify what new tariff levels would apply. Some U.S. goods will also be exempt from Indonesia’s import quota rules, though specific products and quota levels were not disclosed. One emerging detail is that U.S. cotton shipped to Indonesia may face a quota, but would remain tariff-free. A key aspect of the agreement entails Indonesia’s commitment to boost its annual purchases of U.S. wheat. No timeline has been provided for finalizing full terms of the agreement.
China doesn’t want trade war with U.S. but isn’t afraid of one... China wants to bring its trade ties with the U.S. back to a stable footing, its commerce minister said. China is facing an Aug. 12 deadline to reach a durable tariff agreement with the U.S. after Beijing and Washington reached a preliminary deal last month to end escalating tit-for-tat tariffs. Commerce Minister Wang Wentao aid the current overall tariff level imposed by the U.S. on China was “still high” at 53.6%. “Both sides have come to understand that they need each other, as lots of the goods and services that we exchange are irreplaceable, or at least difficult to exchange in the short-term,” Wang said. “China does not want a trade war, but it is not afraid of one,” he reiterated.
Lula won’t bow to Trump, calls tariffs ‘unacceptable blackmail’... Brazilian President Luiz Inacio Lula da Silva said he would not take orders over tariffs from a foreigner and later called President Donald Trump’s threatened duties “unacceptable blackmail.” Trump attributed the tariffs, set to start Aug. 1 to Brazil’s treatment of former President Jair Bolsonaro and to trade practices against U.S. companies that he said are unfair. Brazil’s government has been holding discussions with industry groups and companies that will be affected by the U.S. tariffs, while also readying potential retaliatory measures if a deal isn’t reached.
China expects bumper grain production... China achieved a bumper summer grain harvest this year despite severe drought in some regions. Total grain output is expected to reach 149.74 MMT, which would be the second highest on record behind last year, according to the ag ministry. Acreage for fall-harvested crops is expected to rise slightly and they are generally in good condition.
LanzaJet’s pioneering ethanol-to-jet fuel plant set to launch by fall... The world’s first commercial-scale ethanol-to-jet fuel plant, owned by LanzaJet Inc., is expected to begin operations in Soperton, Georgia by the end of September, after multiple delays due to equipment issues. The $200 million project, funded in part by the U.S. government, will initially use Brazilian sugar-cane ethanol to produce sustainable aviation fuel (SAF), even though it won’t qualify for the U.S. 45Z tax credit due to feedstock origin rules. CEO Jimmy Samartzis said the company is pushing to start with available low-carbon ethanol and transition to qualifying American sources once they become more viable. The Georgia facility is projected to produce 10 million gallons of SAF and renewable diesel annually.
House GOP passes $9 billion in cuts, delivering win to Trump... House Republicans late Thursday approved a sweeping $9 billion spending cut package, marking a major political victory for President Donald Trump. The legislation slashes $8 billion from the U.S. Agency for International Development (USAID) and $1.1 billion from the Corporation for Public Broadcasting, which supports NPR and PBS. It now heads to Trump’s desk for signature. Public media outlets have begun layoffs and program cuts in anticipation of reduced funding. Trump and Republican allies have long criticized public broadcasters as “biased.”
WSJ: Union Pacific eyes Norfolk Southern in potential megamerger... Union Pacific is in early-stage discussions to acquire Norfolk Southern, according to the Wall Street Journal (WSJ). The potential merger would mark a massive consolidation in the railroad industry, combining Union Pacific’s $140 billion market value with Norfolk Southern’s $60 billion footprint. WSJ sources familiar with the matter cautioned that the talks are preliminary, and there’s no certainty a deal will materialize—or clear regulatory hurdles. The possibility remains that other suitors could emerge. If completed, the deal would reshape North America’s freight rail landscape.
China’s pork imports steady... China imported 90,000 MT of pork during June, unchanged from the previous month and year-ago. Through the first half of 2025, China imported 540,000 MT of pork, up 4.9% from the same period last year.
Canada and New Zealand resolve dairy trade dispute... Canada and New Zealand have reached a “mutually satisfactory” resolution to a long-running dispute over access for dairy products, the Canadian government said. New Zealand launched a claim against Canada in May 2022, arguing that Ottawa’s implementation of dairy tariff rate quotas under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement were against its rules. Under the new agreement, Canada has committed to make commercially meaningful changes to the way it administers its dairy quotas under CPTPP, according to the New Zealand government. The Canadian government added that this means there are technical policy changes but these are limited to quotas administered under the terms of CPTPP and does not amend Canada’s market access commitments.
Light cash cattle trade at firmer prices... Cash cattle lightly traded in both the Southern Plains and northern market at higher prices on Thursday, though many packers were reluctant to actively bid for cattle given negative margins. Wholesale beef prices were mixed with Choice up 43 cents to $373.28 and Select down $4.07 to $353.84. Beef movement was 139 loads on Thursday and has averaged 135 loads the past five days.
Cash hog fundamentals picking up steam... The CME lean hog index is up 43 cents to $107.63 as of July 16, marking the first back-to-back rise and the biggest daily gain since late June. Pork cutout firmed $1.58 to $116.32 on Thursday, the highest level in three weeks.
Overnight demand news... Exporters reported no tenders or sales.
Today’s reports
- 2:00 p.m. Peanut Prices — NASS
- 2:30 p.m. Commitments of Traders — CFTC