Good morning!
Varied tone in light grain trade overnight... Corn and winter wheat markets were supported by light corrective buying overnight, while soybeans and spring wheat faced light followthrough selling. As of 6:30 a.m. CT, corn futures are trading fractionally to 2 cents higher, soybeans are 1 to 2 cents lower, SRW wheat is 3 cents higher, HRW wheat is a penny higher and HRS wheat is 2 to 3 cents lower. The U.S. dollar index is around 250 points lower and front-month crude oil futures are about $1.20 higher.
Carney heads to White House for high-stakes USMCA, tariff talks... Canadian Prime Minister Mark Carney will meet President Donald Trump in Washington today for critical talks on the future of the U.S.-Mexico-Canada Agreement (USMCA) and escalating U.S./Canada tariff disputes. This is Carney’s first official U.S. visit since taking office. Talks are expected to be tense but pivotal. Trump seeks swift concessions; Carney says he’s willing to wait for a deal “on our terms.” The result may reshape North American trade ahead of the 2026 USMCA review.
Bessent signals optimism as U.S./China trade talks stall in public... Treasury Secretary Scott Bessent, in an interview with CNBC, expressed optimism that “substantial progress” in U.S./China trade negotiations could be achieved in the coming weeks. However, the overall status of talks remains uncertain, with public statements from both sides highlighting a lack of formal engagement and continued strategic posturing. Bessent placed responsibility for progress on Beijing, stating that China’s export-dependent economy cannot sustain the current U.S. tariff levels. He emphasized that the U.S. is open to de-escalation and has already buffered potential supply chain disruptions through advance retail orders. Importantly, he reiterated that negotiations will not be conducted through the media and that real engagement requires China to take tangible steps first. Bessent outlined a multi-phase process: starting with tariff de-escalation, followed by broader negotiations on non-tariff barriers and intellectual property protections. China maintains publicly that no formal talks are happening, despite Bessent’s claims. Chinese officials say they are “evaluating” U.S. overtures but warn against “coercion,” demanding that Washington revoke unilateral tariffs before any serious negotiations begin. Quiet exemptions on select U.S. goods suggest flexibility, but the official line remains firm.
U.S. rejects Japan’s request for full tariff exemptions... The U.S. has denied Japan’s push for full exemption from both “reciprocal” and country-specific tariffs, according to Kyodo. In recent talks, U.S. officials informed Japan’s chief negotiator Ryosei Akazawa that only a reduction — not elimination — of the 14% Japan-specific tariff on certain goods (currently suspended through early July) is under consideration. Japan had sought the removal of these duties, as well as tariffs on cars, steel and aluminum. USDA Secretary Brooke Rollins plans to visit Japan, India and Vietnam in the coming weeks to discuss Trump’s tariffs, according to Kyodo. Japan’s Finance Minister Katsunobu Kato said the country won’t use the sale of its U.S. Treasury holdings in trade talks with Washington, clarifying his previous remarks that suggested they could be used as a negotiating tool.
EU trade chief says bloc will not be pressured into unfair deal... The European Union does not feel pressure to accept an unfair trade deal with the U.S., the bloc’s trade chief Maros Sefcovic said, as other trading partners were keen to accelerate trade talks. “The EU has made clear that we are ready to discuss and we are ready to find mutually beneficial solutions,” he said. However, he added that officials are still preparing in case both sides can’t reach a deal. “The commission stands ready, if necessary, to use all available tools in our trade defense instrument toolbox in a rapid manner to protect the EU single market, EU producers and EU consumers,” Sefcovic said. He is engaging with the Trump administration and will present proposals this week aimed at lowering trade barriers, increasing EU investment in the U.S., purchasing more American goods and coordinating on global competition challenges.
HRW CCI rating improves again, SRW crop rebounds... USDA rated the winter wheat crop 51% “good” to “excellent” and 18% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop improved 2 points to 327.0, despite a 1.3-point decline in top producer Kansas. The SRW crop improved 2.1 points to 369.3, driven by a 1.9-point increase in top producer Illinois. The HRW crop is rated 9.5 points above year-ago, while the SRW crop is 23.4 points below last year at this time. Click here for full details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of May 4:
- Winter wheat: 51% good/excellent (49% last week); 39% headed (33% average).
- Corn: 40% planted (39% average); 11% emerged (9% average).
- Soybeans: 30% planted (23% average); 7% emerged (5% average).
- Spring wheat: 44% planted (34% average); 13% emerged (9% average).
- Cotton: 21% planted (20% average).
China’s Henan province issues risk warning for wheat growth... China’s Henan province, which produces about one-third of the country’s wheat, issued a risk warning for the wheat crop. From May 11-13, temperatures are expected to exceed 35 degrees Celsius (95°F), heightening the risk of dry, hot wind damage, especially in areas like Anyang, Puyang and Zhengzhou, which could disrupt wheat development. The warning follows an alert from China’s water resources minister last week, who cautioned about worsening drought conditions in the northern wheat belt.
Cordonnier raises Brazilian corn production forecast... Heavy rainfall in April provided Brazil’s safrinha corn crop with ample soil moisture as the crop moves through pollination and grain fill. As a result, South American crop consultant Dr. Michael Cordonnier raised his Brazilian corn crop forecast 1 MMT to 126 MMT, while maintaining a higher bias. Cordonnier left his Brazilian soybean crop estimate at 169 MMT. He also left his Argentine crop forecasts at 50 MMT for soybeans and 49 MMT for corn, with a neutral-to-higher bias toward both.
Brazil’s corn-based ethanol production expected to maintain sharp upward trajectory... Brazilian corn ethanol industry group UNEM expects production of the fuel will reach 9.9 billion liters in 2025-26 crop, up 20% from 8.24 billion liters in 2024-25. Production in 2024-25 will be up 30.9% from the previous year. As more corn goes to ethanol production, Brazil will have less supplies to export.
IKAR raises Russian wheat production, export forecasts... Russia’s IKAR agriculture consultancy raised its 2025 wheat production forecast by 1.5 MMT to 83.8 MMT. Its 2025-26 Russian wheat export forecast was raised 1.3 MMT to 40 MMT.
Thailand hopeful of reaching rice export target despite slow start... Thailand is hoping to achieve its rice export target of 7.5 MMT this year, despite a sharp fall in first-quarter shipments, as sales to the U.S. have increased, a commerce ministry official said. The ministry will ensure rice shipments can continue by seeking government-to-government deals, including with China, and will push for exports to African markets. Thailand’s rice exports fell 30% annually in the first quarter of 2025 following the resumption of exports from India. The Thai Rice Exporters Association said full-year rice exports could fall below the 7.5 MMT target.
Euro zone business activity slows in April... The final composite euro zone purchasing managers index (PMI) compiled by S&P Global came in at 50.4 in April, up from the “flash” estimate of 50.1 but down from 50.9 in March. The expansion was carried by the services sector, which unexpectedly avoided contraction, while the manufacturing sector contracted at a softer pace. New orders fell for an 11th straight month amid the weak economic backdrop and headwinds from the trade war. Export orders also declined, but at the slowest pace in nearly three years.
Mixed cash cattle opinions... Cash cattle averaged a record $220.97 last week, up $4.65 from the previous week. Cash prices have surged $13.27 the past three weeks, with the last two setting records. Many cash sources expect prices to be higher again this week, though some believe the market will retreat after packers purchased the most cattle of the year last week and they have May contracted supplies available.
Cash hog index continues to climb, pork cutout stays range bound... The CME lean hog index is up another 18 cents to $89.87 as of May 2, the 13th consecutive daily gain. Pork cutout fell $1.72 to $96.66 on Monday as all cuts except ribs weakened.
Overnight demand news... South Korea purchased 65,000 MT of optional origin corn.
Today’s reports
- 1:00 p.m. Milk Cows and Production by State and Region (Annual) — ERS
- 2:00 p.m. Dairy Products — NASS