Good morning!
Modest corrective buying in corn and beans overnight... Corn and soybeans modestly rebounded from recent pressure during the overnight session, while wheat traded narrowly on both sides of unchanged. As of 6:30 a.m. CT, corn and soybean futures are trading 1 to 2 cents higher, while wheat futures are a penny lower to a penny higher. The U.S. dollar index is around 350 points lower after falling to the lowest level since February overnight, while front-month crude oil futures are modestly firmer.
U.S./India trade talks stalled over tariff disputes... Trade negotiations between the U.S. and India have reached a major impasse, casting doubt on prospects for a bilateral agreement ahead of President Donald Trump’s July 9 deadline to impose new reciprocal tariffs, Reuters reports. Indian officials say both sides remain divided over import duties on auto components, steel and agricultural products. India is pressing for a rollback of the proposed 26% U.S. reciprocal tariff and seeking relief from existing U.S. duties on Indian steel and auto parts. However, U.S. negotiators have rejected these requests and are demanding deeper tariff cuts by India on U.S. farm goods — including soybeans and corn — as well as on automobiles and alcoholic beverages and are seeking eased non-tariff barriers. An Indian delegation is expected to travel to Washington before the deadline, but sources caution that negotiations may shift toward a broader deal rather than a rushed interim pact. Despite previous optimism — including Trump’s suggestion that India was open to a “no tariffs” arrangement for U.S. goods — progress has been minimal. Indian negotiators stress they are “keen, but not desperate” to conclude a deal before July 9. A breakthrough could still occur if Prime Minister Narendra Modi and Trump intervene directly.
Biodiesel makers warn of industry collapse without immediate tax credit extension... U.S. biodiesel producers are warning of a potential industry-wide collapse unless Congress acts quickly to extend the expired $1.00 per gallon biodiesel blenders’ tax credit (BTC), which lapsed at the end of 2024. Trade organizations — including the Sustainable Advanced Biofuel Refiners and the National Association of Truck Stop Owners — say a policy gap between the expiration of BTC and the delayed start of its replacement, the 45Z Clean Fuel Production Tax Credit, threatens to shutter much of the nation’s biofuel production. A bipartisan coalition in Congress is now pressing to extend BTC through at least 2025.
WSJ: Trump eyes early Fed chair announcement to undercut Powell... President Donald Trump is considering an unprecedented early announcement of his pick to succeed Federal Reserve Chair Jerome Powell, whose term expires in 11 months, the Wall Street Journal reports. The move is aimed at ramping up pressure on Powell and influencing monetary policy ahead of next year’s transition. Trump is weighing candidates including former Fed governor Kevin Warsh, National Economic Council director Kevin Hassett, Treasury Secretary Scott Bessent, former World Bank President David Malpass, and Fed governor Christopher Waller, according to WSJ, citing people familiar with the process. Trump has grown openly frustrated with the Fed’s cautious approach to rate cuts as his administration pushes what the White House describes as a “turbocharged” growth agenda.
Weekly Export Sales Report out this morning... For the week ended June 19, traders expect:
| 2024-25 expectations (in MT) | 2024-25 last week | 2025-26 expectations (in MT) | 2025-26 last week | |
| Corn | 500,000-1,200,000 | 903,792 | 100,000-350,000 | 154,998 |
| Wheat | NA | NA | 300,000-600,000 | 427,170 |
| Soybeans | 200,000-600,000 | 539,511 | 0-150,000 | 75,151 |
| Soymeal | 100,000-400,000 | 160,281 | 0-250,000 | 14,021 |
| Soyoil | (10,000)-22,000 | (1,473) | 0-12,000 | 0 |
China signs rare deal for Argentine soymeal... Chinese firms have booked a deal for 30,000 MT of Argentine soymeal for July shipment, marking the country’s first such purchase since China granted import approval for the product in 2019, four trade sources told Reuters. The cargo was jointly purchased by several Chinese feed makers and is expected to arrive in September in southern China’s Guangdong province, the sources said. A Singapore-based trader at an international trading company that sells soybeans to China said this is “a test case... If it goes through China’s inspection and quarantine, we expect more deals.”
IKAR raises Russian wheat crop forecast... IKAR agriculture consultancy raised its Russian wheat production forecast by 700,000 MT to 84.5 MMT, citing better crop conditions in the southern region of Stavropol as the main reason. It said crop conditions in central Russia have also improved. SovEcon earlier this week raised its Russian wheat production forecast to 83 MMT, noting improved conditions in central Russia.
India allocates record rice supplies for ethanol production... State-run Food Corporation of India (FCI) has allocated a record 5.2 MMMT of rice for ethanol in the 2024-25 marketing year. In the previous year, less than 3,000 MT of FCI rice went into ethanol. Using rice to produce ethanol is helping to reduce rice stocks and keeping India’s ambitious ethanol blending program on track despite a drop in supplies of traditional feedstock sugar cane. FCI buys nearly half of India’s rice crop and had record reserves, including unmilled paddy, of 59.5 MMT on June 1, more than four times the government’s target of 13.5 MMT for July 1. India aims to increase the ethanol blending rate to 20% by 2025-26. Last month, it nearly hit that target, reaching 19.8%.
AB Foods set to close bioethanol plant after U.S./UK trade deal... Associated British Foods said it would close its bioethanol plant in northern England by September if the UK government does not provide funding following Britain’s trade deal with the United States. Under last month’s trade deal, the UK’s 19% tariffs on U.S. ethanol will fall to zero, through a 1.4 billion-liter (370 million gallon) quota – a figure equal to the size of the UK’s entire ethanol market. AB Foods wants the government to level the regulatory playing field, increase the amount of ethanol in UK fuel from 10% to 15% and support the development of sustainable aviation fuel. It also wants the industry to have access to short-term financial aid of up to 150 million pounds ($202 million).
Slightly smaller U.S. hog herd expected... Analysts expect USDA’s Hogs & Pigs Report this afternoon to show the U.S. hog herd contracted 0.4% from year-ago as of June 1, based on a Reuters survey. The reduction is expected to be in the market hog inventory, while the breeding herd is anticipated to be near year-ago levels. The spring pig crop is anticipated to have expanded nearly 1% from last year due to a greater number of pigs saved per litter. Key will be any revisions USDA makes to past data.
Slow start to cash cattle trade... Cash cattle trade has been relatively inactive so far, with the limited sales recorded not heavy enough to represent a true market test. Lower cash prices are eventually expected, with a wide range between the low and high ends of the market.
Futures reflect July cash hog market top... The CME lean hog index is up another 97 cents to $111.41 as of June 24. July lean hog futures finished Wednesday $1.415 above today’s quote, while August hogs ended with a 18.5-cent discount. That suggest traders sense the seasonal runup in the cash index is nearing an end – or at least they don’t want to trade a premium beyond mid-July.
Overnight demand news... Exporters reported no tenders or sales.
Today’s reports
- 7:30 a.m. Weekly Export Sales — FAS
- 2:00 p.m. Hogs and Pigs — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:00 p.m. Slaughter Weekly — NASS