Good morning!
Corrective buying in grains overnight... Corn, soybeans and wheat rebounded from earlier weakness to post corrective gains early this morning. As of 6:30 a.m. CT, corn futures are trading mostly 2 cents higher, soybeans are 3 to 4 cents higher and wheat futures are 2 to 5 cents higher. The U.S. dollar index is trading just below unchanged and front-month crude oil futures are around 85 cents higher.
Active weather pattern to continue over Corn Belt... Regular rains will continue across the Midwest this week, with cooler temps likely, maintaining favorable conditions. However, some of the rainfall expected in the Southern Plains, central Delta, southern Tennessee River Basin and interior southeastern states will become lighter and may not counter evaporation rates very well leading to a gradual drying trend, despite some periodic showers, according to World Weather Inc. Drought will continue in the far western United States, including the Pacific Northwest.
Trump announces 30% tariffs on Mexico, EU... President Donald Trump sent letters to Mexico and the European Union threatening 30% tariffs on imports, effective Aug. 1, with higher levels threatened if negotiations on comprehensive trade deals remain stalled. The tariffs on Mexico are linked to concerns over fentanyl and border security, while the EU tariffs are justified by the administration as a response to the persistent U.S. trade deficit with the bloc. “Goods transshipped to evade a higher Tariff” will also face a higher rate, Trump added. European Commission President Ursula von der Leyen announced the EU will extend its suspension of planned countermeasures against U.S. tariffs through early August, buying more time for negotiations. The EU has prepared a list of tariffs worth 21 billion euros ($24.52 billion) on U.S. goods if they fail to reach a trade deal. Mexican officials stated they are working to secure an alternative to the tariffs before the Aug. 1 deadline. The EU and Mexico together account for about one-third of total U.S. goods imports.
U.S./Taiwan tariff talks reach critical juncture... Taiwan’s government says trade negotiations with the U.S. have entered a “crucial moment,” with both sides aiming to finalize a tariff agreement before the looming Aug. 1 deadline. Following a third round of in-person talks in Washington on July 8, Taiwanese officials led by Vice Premier Cheng Li-chiun and chief negotiator Yang Jen-ni reported significant progress, including consensus on key issues and an agreement on the schedule for the next round. Both sides emphasized that negotiations remain active, with the final tax rate to be set once a broader deal is reached. Taiwan stressed its commitment to a balanced trade partnership that protects national and industrial interests, as well as public health and food security.
Trump signals South Korea seeks trade agreement... South Korea is eager to strike a trade deal with the U.S., Trump said, highlighting ongoing negotiations and the broader context of his administration’s tariff policies. The Trump administration has imposed a 25% tariff on goods from South Korea, with a temporary pause in effect until Aug. 1 to allow for negotiations. South Korea’s top trade envoy, Yeo Han-koo, indicated it may be possible to reach an “in-principle” trade agreement before the Aug. 1 deadline, as Seoul races to avoid a 25% tariff on its exports threatened by Trump. Following high-level talks in Washington, Yeo said there has been “considerable progress,” particularly around industrial cooperation, but acknowledged that “twenty days are not enough to come up with a perfect treaty that contains every detail.” Yeo signaled South Korea’s willingness to allow greater U.S. access to its agriculture and livestock markets, though “sensitive” areas may still require protection. The U.S. is pressing for reductions or exemptions on tariffs in sectors such as autos and steel, which are crucial to South Korea’s economy.
China’s soybean imports slow but still a June record... China imported 12.26 MMT of soybeans in June. While that was down 1.66 MMT (11.9%) from the all-time high in May, it was a record for the month and up 1.15 MMT (10.4%) from last year. Through the first half of 2025, China imported 49.37 MMT of soybeans, up 1.8% from the same period last year.
China’s exporters rush to beat U.S. tariffs... China’s exports rose 5.8% from year-ago to $325.2 billion in June, accelerating from 4.8% growth in May as exporters pushed shipments out ahead of the August U.S. tariff deadline. Imports rose 1.1% to $210.4 billion, rebounding from a 3.4% decline in May and marking the first monthly increase this year. China’s trade surplus widened to $114.77 billion from $103.22 billion in May. China’s trade surplus with the U.S. expanded to $26.57 billion in June, up from $18.00 billion in May, even as both exports and imports with the U.S. declined, falling 16.1% and 15.5%, respectively.
India’s palm oil imports jump to 11-month high... India’s palm oil imports in June jumped more than 60% from May to 955,683 MT, the highest since July 2024, the Solvent Extractors’ Association of India (SEA) said. Refiners ramped up purchases due to a price discount compared to rival soyoil and sunflower oil and replenished depleted inventories. Soyoil imports decreased 9.8% to 359,504 MT, while sunflower oil imports rose 17.8% to 216,141 MT, SEA said.
Turkey sets zero tariff on corn imports through July... Turkey has set a zero tariff for 500,000 MT of corn imports until the end of July, the country’s Official Gazette said.
The week ahead in Washington... It’s an important work week in Congress as messaging wars over the new One Big Beautiful Bill Act are just beginning, with Democrats already attacking Republicans for social program “cuts,” especially to Medicaid, ahead of the 2026 midterms. A new government funding deadline for fiscal year 2026 is less than three months away and partisan gridlock continues. The Senate is locked in a high-stakes battle over Trump’s proposed $9.4 billion rescissions package, which aims to claw back previously approved funding for foreign aid and public broadcasting — specifically $1.1 billion from PBS and NPR and $8.3 billion in foreign assistance. With the House having narrowly passed the package, its fate now hinges on the Senate, where a rare fast-track process allows passage with a simple majority before a critical July 18 deadline. Key economic data includes consumer inflation data on Tuesday and producer prices on Wednesday.
China’s new loans surge in June... Chinese banks extended 2.24 trillion yuan ($312 billion) in new loans in June, more than triple May’s total, aided by stimulus measures and a trade truce with the United States. Annual growth of outstanding total social financing, a broad measure of credit and liquidity in the economy, rose to 8.9% last month, the largest increase since February 2024. Household loans jumped to 597.6 billion yuan in June from 54 billion yuan in May. Corporate loans rose to 1.77 trillion yuan from 530 billion yuan in May.
China’s meat imports rise in June... China imported 533,000 MT of meat in June, up 3.9% from May 3.5% from year-ago. Through the first half of this year, China imported 3.2 MMT of meat, down 2.7% from the same period last year.
Beef margins back in the red... The combination of higher cash cattle prices on Friday and sharply lower wholesale prices last week pushed beef packer margins back in the red after a short stint in positive territory. While negative margins may give packers pause on aggressively bidding for cash cattle this week, supplies remain tight relative to near-term needs.
Cash hog index weakens... The uptick in the CME lean hog index proved to be temporary, with it down 4 cents to $107.10 as of July 10. Pork cutout fell 68 cents to $113.47 on Friday, with primal bellies plunging $12.56.
Weekend demand news... Taiwan tendered to buy 89,650 MT of U.S. milling wheat. Algeria tendered to buy a nominal 50,000 MT of optional origin soft milling wheat.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 1:00 p.m. Season Average Price Forecasts — ERS
- 1:00 p.m. Wheat Data — ERS
- 2:00 p.m. Turkey Hatchery — NASS
- 3:00 p.m. Crop Progress — NASS