Good morning!
Grains under pressure to open the week... Corn, soybeans and wheat faced pressure overnight amid conflicting U.S./China remarks on trade talks and favorable weather forecasts. As of 6:30 a.m. CT, corn futures are trading 5 to 6 cents lower, soybeans are 5 to 7 cents lower and wheat futures are 7 to 10 cents lower. The U.S. dollar index is more than 200 points higher and front-month crude oil futures are around 30 cents lower.
China quietly de-escalating in tariff standoff, but deal could take months... China has quietly begun de-escalating its trade conflict with the U.S., reportedly exempting most U.S.-origin semiconductors from its 125% retaliatory tariffs, effective April 24. Domestic media outlet Caijing broke the story, citing chip industry insiders and importers, before the report was removed — though multiple sources have confirmed the exemption. Tariffs paid between April 10 and 24 will also be refunded. Additionally, a rumored tariff exemption list — circulating since last Thursday — includes pharmaceuticals, semiconductors and equipment, jet engines and other key U.S. industrial exports. The items reportedly account for about $45 billion, or 30%, of China’s 2024 imports from the United States. If verified, the rollback signals Beijing’s willingness to reduce tensions and opens the door for reciprocal moves from Washington. Treasury Secretary Scott Bessent on Sunday said a trade deal can take months, but a de-escalation and an agreement in principle can be achieved sooner and would keep tariffs from ratcheting back to the maximum level.
South Korea, U.S. agree ‘in principle’ on framework for trade talks... South Korean and U.S. officials agreed on a framework for future discussions on tariffs and will continue talks this week, the trade ministry in Seoul said, according to Bloomberg. Industry Minister Ahn Duk-geun requested the U.S. exempt South Korea from all new tariffs in the future. Ahn also asked for exemption from reciprocal and sectoral tariffs, including those on cars and steel. The discussions focused on achieving a “mutually beneficial” trade balance between two countries, trade ministry said.
U.S. sets staggered trade talks under new negotiation template... The Trump administration plans to conduct staggered trade negotiations using a standardized framework to accelerate deals with roughly 18 major trading partners, according to the Wall Street Journal (WSJ), citing people familiar with the plans. The U.S. Trade Representative (USTR) has prepared a template outlining five broad negotiation categories: Tariffs and quotas, non-tariff barriers (such as regulations on U.S. goods), digital trade, rules of origin and economic security and commercial issues. Negotiations are planned to occur in three waves — six countries each week — with a self-imposed July 8 deadline. Reciprocal tariffs could be imposed on countries that fail to reach an agreement, unless President Trump extends the current 90-day pause. While officials are moving quickly, WSJ notes that some partners — including the European Union — have complained they are still awaiting specific U.S. demands. Key countries like Mexico and Canada are not involved in this particular round since Trump’s reciprocal tariff order did not apply to them, and China appears to be on a separate negotiation track.
EPA eyes nationwide emergency waiver for E15 summer sales amid global conflicts... EPA is under pressure to issue a nationwide emergency waiver allowing E15 fuel sales during the 2025 summer driving season. While earlier this year EPA advanced permanent waivers for eight Midwest states — with South Dakota and Ohio granted a one-year delay — the agency has not yet confirmed if it will again issue a temporary nationwide waiver, as it did in 2023 and 2024. Those waivers cited the Ukraine war and Middle East unrest as justification. Emergency E15 waivers last 20 days but have historically been renewed through summer. If approved, the initial waiver is expected by the end of April with a May 1 effective date to avoid disruptions before the June 1 seasonal fuel change. So, an EPA is announcement is possible this week.
Trump demands free passage for U.S. ships through Panama, Suez Canals... President Donald Trump called for American ships to have “free of charge” access through the Panama and Suez Canals, escalating his push to expand U.S. influence over vital global waterways. In a Truth Social post Saturday, Trump claimed the canals “would not exist without the United States” and said he directed Secretary of State Marco Rubio to “immediately take care of” the matter. This follows Trump’s broader strategy of countering Chinese shipping dominance through tariffs, port fees and a revival of U.S. shipbuilding. Trump has already pressured Panama into guaranteeing free warship passage after raising concerns about Chinese control around the canal. Meanwhile, a CK Hutchison plan to sell its Panama port assets to a BlackRock-led group faces Chinese objections and financial hurdles.
The week ahead in Washington... Congress returns this week with a focus on key reconciliation and tax cut issues. Congress recently passed an amended budget resolution for fiscal year (FY) 2025, unlocking the reconciliation process. This allows Republicans to advance major tax and spending legislation with a simple majority in the Senate, bypassing the filibuster. The reconciliation bill is expected to include extensions of Trump-era tax cuts, and new tax cuts, significant increases in border security and defense spending, reforms to energy policy and substantial reductions in federal spending. If GOP leaders give the go ahead, some new farm bill language may be included in the reconciliation measure, such as higher reference prices and some positive crop insurance language. The Senate’s Byrd rule will not allow an entire farm bill via reconciliation. Key economic data this week will be Wednesday’s Personal Consumption Expenditures price index – the Fed’s preferred inflation gauge – for March and the initial estimate of first quarter GDP, along with Friday’s monthly conemployment report.
Cargill to handle higher grain volumes in Brazil this year due to big crops and U.S./China unrest... The Brazilian unit of U.S. grain trader Cargill expects to handle higher volumes of grains and other products in the country this year compared to 2024. The optimism expressed by Cargill President Paulo Sousa reflects a record 2025 soybean harvest and beneficial weather for Brazil’s safrinha corn crop. Sousa said he expects the company’s total volume originated, processed and sold this year in Brazil to equal or exceed the 51 MMT recorded in 2023 and 45 MMT last year. According to Sousa, the trade war may divert Chinese demand for products produced in Brazil.
Mostly favorable U.S. weather outlook... Most U.S. crop areas will get rain at one time or another during the next ten days to two weeks with periods of sunshine and warm weather also expected. World Weather Inc. says rains will be favorable for spring planting and winter crop development in the Plains, Midwest and Delta during the next 10 days because of greater rain in the drier areas and less rain in the wetter areas.
Japanese rice prices continue to rise... Japanese supermarket rice prices rose for the 16th straight week and doubled from a year ago, the ag ministry said, despite the government’s release of emergency stocks. With domestic prices showing no signs of falling, private companies are planning to import more foreign rice outside Japan’s tariff-free quota.
China’s Q1 industrial profits return to growth... Cumulative profits of China’ industrial firms rose 0.8% to 1.509 trillion yuan ($205.86 billion) in the first quarter from a year earlier, recovering from a 0.3% drop in the first two months of the year. In March alone, profits rose 2.6% from last year. However, industrial profits are likely to be pressured by the trade war with the United States.
USDA threatens Mexico livestock import ban over renewed NWS outbreak... USDA Secretary Brooke Rollins on Saturday wrote: “As the New World Screwworm (NWS) outbreak is escalating, unless Mexico removes restrictions on USDA aircraft and waives customs duties on eradication equipment by April 30, the U.S. will close ports of entry to cattle, bison and equine from Mexico to protect American agriculture due to the escalating New World Screwworm outbreak.” Mexico may impose restrictions on USDA aircraft and testing equipment for several interrelated reasons, primarily rooted in regulatory, biosecurity, and sovereignty concerns.
Cash cattle could challenge all-time high... Cash cattle traded generally $2.00 to $3.00 higher on Friday, meaning the average cash cattle prices for the week could challenge the record of $212.76. Despite efforts to limit slaughter runs amid highly negative margins, packers continue to actively bid for cash cattle as they must produce enough beef to meet rising retailer demand ahead of the grilling season.
Cash hog index continues to firm... The CME lean hog index is up another 27 cents to $87.54 as of April 24, the seventh straight daily gain. During that span, the index has risen $2.45. Pork cutout firmed $2.18 on Friday to $98.02, fueled by a $9.75 jump in primal bellies.
Weekend demand news... Taiwan tendered to buy up to 65,000 MT of corn to be sourced from the U.S., Brazil, Argentina or South Africa.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 3:00 pm Crop Progress — NASS