Good morning!
Grains quiet overnight... Corn, soybeans and wheat held in relatively tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are 1 to 2 cents higher, winter wheat futures are fractionally to 2 cents lower and spring wheat is narrowly mixed. The U.S. dollar index is around 135 points lower and front-month crude oil futures are modestly higher.
Global Times: U.S./China 90-day truce should be extended... The 90-day tariff truce agreed by the U.S. and China is too short, China’s state-backed Global Times said, as U.S. Trade Representative Jamieson Greer met Chinese trade envoy Li Chenggang on Thursday at an Asia-Pacific Economic Cooperation meeting on South Korea’s Jeju Island. “The window for mutually beneficial cooperation should extend far beyond a mere 90-day period,” said the Global Times, which is owned by the newspaper of the ruling Communist Party, People’s Daily. “Hopefully, the U.S. side will build on the outcomes of the recent talks and continue to meet China halfway.”
EU revises trade proposal ahead of key talks... The European Union is reportedly revising its trade offer to the U.S., adding specifics on lowering trade and non-tariff barriers while encouraging more EU investment in the U.S. and purchases of American goods. Though talks have been slow, EU trade ministers expressed cautious optimism.
Trump says new tariff rates coming soon for dozens of countries... President Donald Trump said he would set tariff rates for U.S. trading partners “over the next two to three weeks,” saying his administration lacks the capacity to negotiate deals with all of its trading partners, according to Bloomberg. Trump said Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick “will be sending letters out essentially telling people” what “they’ll be paying to do business in the United States.” He said, “I think we’re going to be very fair. But it’s not possible to meet the number of people that want to see us,” while noting there are “150 countries that want to make a deal.” Negotiations are ongoing with several countries, including Japan, South Korea, India and the European Union.
Chile, U.S. advance trade talks at APEC... Chile’s Undersecretary of International Economic Relations Claudia Sanhueza and USTR Greer held their second meeting at the APEC summit in South Korea. According to Chile’s government, technical teams are now defining topics for future negotiations, including the digital economy, economic security and non-tariff barriers.
China issues another weather risk warning for wheat crop... China issued a warning about a high risk of dry, hot winds from next Monday to Thursday that could damage winter wheat crops in major growing regions, according to the China Meteorological Administration (CMA). The extreme heat and dry winds could disrupt the grain filling process and cause the wheat to mature too quickly, the agency warned. Temperatures in parts of Henan – the country’s largest wheat-producing province – as well as Shaanxi, Shanxi and others, are expected to exceed 40 degree Celsius (104 F), potentially breaking historical records for this time of year, CMA said.
Japan confirms release of more rice stocks... Japan will sell another 300,000 MT of rice from emergency stockpiles through July to address shortages and rein in prices. It has already sold 310,000 MT of rice from government stockpiles since March. The government’s stockpiling policy requires it to purchase the same amount released within one year, though that timeframe has now been extended to five years. The government will also designate a portion of the release to bypass wholesalers so the rice can reach consumers more quickly.
Some Brazil sugar mills weighing switch to ethanol... Some sugarcane processors in Brazil are closely following the price gap between sugar and ethanol and could start making more of the biofuel if sugar prices continue to fall. An international sugar trader told Reuters that if sugar prices fall to around 16.5 cents per pound, Brazil would cut 1 MMT of sugar production as cane would be used to make ethanol instead. Mills with longer distances to ship sugar to ports for export would likely make the switch first.
USDA finalizes livestock relief rule... USDA sent its final rule on the Emergency Livestock Relief Program 2023/2024 (ELRP 2023/2024) to the Office of Management and Budget (OMB) for review, signaling the agency is getting closer to putting the relief effort in motion. ELRP 2023/2024 will be used to disburse the $2 billion in disaster aid earmarked for livestock producers via legislation approved by Congress Dec. 21 for a total of nearly $21 billion in disaster aid. USDA said earlier this month that affected farmers eligible to receive livestock relief for drought and wildfire in 2023 and 2024 “can expect to receive payments as soon as the end of this month.”
Brazil reports first HPAI outbreak on commercial farm... Brazil’s ag ministry reported the country’s first outbreak of highly pathogenic avian influenza (HPAI) on a commercial poultry farm. The outbreak occurred in the city of Montenegro in Brazil’s southernmost state of Rio Grande do Sul.
Brazil’s Marfrig moves to complete takeover of BRF... Brazilian beef processor Marfrig announced a plan to complete its takeover of poultry and pork processor, while teasing plans to eventually list shares of the combined entity in the United States. The move caps a long-running strategy by Marfrig, which already owns just over 50% of BRF, gaining scale to compete with Brazilian meatpacking giant JBS, which is nearing a move to list its shares in the United States. The move also entails creation of a company to be called MBRF, which will also control Marfrig-owned National Beef, a meat processor based in the U.S. that will also be integrated into the new corporate structure.
Key day for cattle futures... Cattle futures posted sharp losses and low-range closes on Thursday. That sets today up as potentially key in determining the near-term direction of the market. If buyers show up on the sharp price pullback, as they’ve consistently done on this historic price rally, another near-term run to the upside would seem likely. But more corrective selling would produce a weekly key reversal and suggest a deeper pullback is likely.
Cash hog fundamentals firm... The CME lean hog index is up 24 cents to $91.02 as of May 14, marking a for-the-move high in the climb to what will likely be a summertime high. Pork cutout firmed $2.58 to $99.92 on Thursday, led by a $7.66 jump in primal bellies, moving to the top of the extended sideways range.
Overnight demand news... Exporters reported no tenders or sales.
Today’s reports
- 2:00 p.m. Peanut Prices — NASS
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: May 2025 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: May 2025 — ERS
- 2:30 p.m. Commitments of Traders — CFTC