Good morning!
Grains mostly weaker this morning... Corn, soybeans and winter wheat futures are mildly favoring the downside this morning following two-sided trade overnight, while spring wheat is modestly firmer. As of 6:30 a.m. CT, corn and futures are trading fractionally to a penny lower, winter wheat markets are 1 to 3 cents lower and spring wheat is around a penny higher. The U.S. dollar index is around 700 points lower and front-month crude oil futures are trading just above unchanged.
Memorial Day weekend schedule... Grain and livestock markets will observe normal trading hours today. All markets and government offices are closed on Monday, May 26, for Memorial Day. There will be no Pro Farmer updates on Monday. Grain markets reopen with the overnight session at 7:00 p.m. CT on Monday. Livestock markets resume trade at 8:30 a.m. CT on Tuesday, May 27. Pro Farmer salutes those who lost loved ones serving our great country.
Farm groups blast MAHA report... Several U.S. farm commodity groups and the American Farm Bureau Federation did not hold back in criticizing portions of the Make America Healthy Again (MAHA) Commission report. The groups broadly called on the commission and the Trump administration to make scienced-based decisions in future actions.
Senate eyes overhaul of Trump’s House-passed tax bill... After the House narrowly passed President Donald Trump’s sweeping tax and spending bill, Senate Republicans quickly signaled they intend to rewrite major sections. Key Senate Republicans raised concerns about provisions including Medicaid cuts, a broader state and local tax (SALT) deduction, and steep rollbacks of clean energy credits. Some senators want deeper deficit reductions, while others warned against moves that could harm rural hospitals and reduce health coverage. While the House bill poses a significant threat to the Inflation Reduction Act’s climate provisions, analysts expect Senate revisions to soften the blow.
Russia removes minimum wheat price recommendation for grain exporters... Russia has removed a minimum wheat price recommendation for its grain export traders until the end of 2024-25 on July 1, four market sources told Reuters. The minimum price recommendation for May and June had been $250 dollars a metric ton. Russia exported 38.6 MMT of wheat from July 2024 through April, according to estimates from the Rusagrotrans rail carrier, which forecasts total exports for the current season at 42.2 MMT. The removal of the minimum price implies that grain traders can sell the estimated 3.6 MMT of wheat at a price below the recommendation. But Russian wheat exports may not jump as much as some think on this news due to a lack of supplies and limited global demand.
China issues ag disaster funding... China recently disbursed 1.4 billion yuan ($194.42 million) of central government funds earmarked for agricultural production disaster prevention and relief, according to a statement from the ag ministry. The funds will support 30 provinces, including Heilongjiang, Jiangsu, Anhui and Henan, with a focus on providing appropriate subsidies for pesticides, equipment and unified services for disaster prevention and control.
Waiver allows Iowa, Indiana to bar junk food from SNAP... USDA Secretary Brooke Rollins signed waivers from Iowa and Indiana that would allow the states to bar the purchase of some processed foods and sugary drinks with Supplemental Nutrition Assistance Program benefits. This follows the recent approval of a similar waiver for Nebraska. The Trump administration has encouraged states to submit such waivers to the Department of Agriculture as part of its MAHA initiative led by Health Secretary Robert F. Kennedy, Jr.
Japan pledges immediate rice relief for consumers... Japan’s new ag minister pledged to quickly move rice from government stockpiles to store shelves where they would be offered at prices significantly lower than current levels, seeking to stem a consumer shift to cheaper, foreign brands. Soaring rice prices have become a major concern for Japanese consumers, making it a hot-button topic for the government. “We’re already seeing supermarkets buying directly from the United States despite having to pay tariffs... We have to quash this abnormal situation and speed is of the essence,” said new Ag Minister Shinjiro Koizumi. Japan has historically been reluctant to encourage imports of rice, seeking self-sufficiency for its staple food and putting up high tariffs to protect local farmers from competition.
Japan’s core inflation hits more than 2-year high... Japan’s annual consumer inflation rate remained at 3.6% in April, the lowest level since December, even as rice costs jumped 94.8% from year-ago. But core inflation, minus food and energy costs, jumped to 3.5% above year-ago, the highest reading in over two years and reinforces expectations that the Bank of Japan will continue tightening monetary policy in response to sustained inflationary pressures.
China lowers bank deposit rate ceilings... China has lowered the ceilings on deposit rates, three banking sources with direct knowledge of the guidance told Reuters, as authorities seek to protect banks’ profit margins and discourage savings. Under the latest guidance, the ceilings for some banks’ time deposit rates have been slashed by 30 to 40 basis points, according to the sources. Every 10 basis-point cut in deposit rates could reduce overall borrowing costs by roughly 5 basis, the source added. China’s major banks reduced baseline deposit rates by up to 25 basis points for some tenors on Tuesday.
SCOTUS weighs new challenge to California’s Prop 12... The U.S. Supreme Court is actively considering whether to rehear a legal challenge to California’s Proposition 12, the state law that bars the sale of pork from animals not raised under strict welfare standards. The latest petition, Iowa Pork Producers Association v. Bonta, asserts that Proposition 12 unlawfully discriminates against out-of-state pork producers and violates the dormant Commerce Clause. The case has been relisted for discussion at an upcoming Supreme Court conference, signaling heightened interest among the justices. Of note: On the legislative front, at least one bill — the Ending Agricultural Trade Suppression (EATS) Act — was introduced in Congress as a potential solution, and on the Prop 12 issue there was language in the House farm bill version that would have addressed it.
Brazil hopes to be HPAI-free in 28 days... Brazil began a 28-day bird flu observation period on Thursday which it hopes will show the country’s chicken farms are free of highly pathogenic avian influenza (HPAI). Eleven active investigations into potential bird flu cases in Brazil are ongoing, including two on commercial chicken farms in Santa Catarina and Tocantins states. Preliminary tests showed the Tocantins case was not HPAI, as we reported yesterday.
OMB clears ELRP, details imminent... The Office of Management and Budget (OMB) has completed its review of the Emergency Livestock Relief Program (ELRP) for 2023/2024, clearing the way for USDA to publish full program details. USDA’s Farm Service Agency (FSA) is expected to release specifics on aid eligibility, the signup process and benefit disbursement by publishing the program in the Federal Register next week. The agency has set a target date of May 30 to begin certifying payments for eligible livestock producers. ELRP is part of a broader $21 billion disaster aid package passed by Congress Dec. 21, with $2 billion specifically allocated to support farmers and ranchers recovering from qualifying livestock-related disasters.
FDA, USDA take cautious path on bird flu vaccination... In a unified message to Congress, FDA Commissioner Marty Makary and USDA Secretary Brooke Rollins stated that HPAI vaccines will not be mandated for poultry at this stage. Speaking during a Senate hearing on the FDA budget, Makary warned against intervening too soon, noting that “we need to wait until we see human-to-human transmission” before pursuing strain-specific vaccines. Rollins echoed this caution, emphasizing that vaccination is “off the table” for now. Instead, USDA is directing its $1 billion response strategy toward biosecurity, surveillance and limited vaccine research — with $100 million earmarked for that effort. USDA’s strategy focuses on containment and prevention through farm-level defenses and farmer support. Officials worry vaccines could obscure viral circulation, disrupt trade or accelerate viral evolution.
Lower feedlot inventory, placements expected in Cattle on Feed Report... Analysts polled by Reuters expect USDA’s Cattle on Feed Report this afternoon to show the May 1 feedlot inventory declined 1.5% from year-ago to 11.381 million head. A focal point will remain placements, which are expected to have declined 3.2% from year-ago levels. Placements at 1.603 million head would represent the smallest total for April since 2020. Marketings are anticipated to have declined 3.3% in April since packers slowed slaughter runs amid struggles to source supplies and poor margins.
Cold Storage Report also out this afternoon... USDA will detail frozen meat stocks at the end of April. The five-year average is a 16.5-million-lb. decline in beef stocks and a 21.7-million-lb. increase in pork stocks during the month.
Overnight demand news... Taiwan tendered to buy up to 65,000 MT of corn from the U.S., Argentina, Brazil or South Africa.
Today’s reports
- 8:00 a.m. Food Price Outlook — ERS
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Cattle on Feed — NASS
- 2:00 p.m. Chickens and Eggs — NASS
- 2:00 p.m. Cold Storage — NASS
- 2:00 p.m. Poultry Slaughter — NASS
- 2:30 p.m. Commitments of Traders — CFTC