Good morning!
Grains supported by hopes of trade war de-escalation... Soybeans led a round of modest gains in the grain and soy complex overnight amid signs of de-escalation of tensions on the trade front. As of 6:30 a.m. CT, corn futures are trading near unchanged, soybeans are 4 to 6 cents higher and wheat futures are 2 to 3 cents higher. The U.S. dollar index is nearly 450 points higher and front-month crude oil futures are around $1.00 higher.
U.S., UK expected to announce trade deal... President Donald Trump posted on Truth Social the deal that will be announced at 10 a.m. ET will be a “full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.” He added: “Many other deals, which are in serious stages of negotiation, to follow!” The Associated Press reported the agreement is likely to fall short of a full free trade deal but will provide tariff relief to certain sectors.
Perspective on weekend trade talks between U.S. and China... China watchers Trivium China note the planned talks between top U.S. and Chinese trade officials this weekend are only the start of what’s likely to be a long and bumpy negotiation. They said: “Unlike recent negotiations between the U.S. and its trading partners — which have been held in Washington — this meeting was set in a third country to avoid the optics of one side bending to the other. Trump’s ‘maximum pressure’ playbook and unpredictable decision-making could easily upend fragile progress. We’ll be looking for the following two deliverables, which will generate momentum for more detailed negotiations down the line: 1) Both sides agreeing to broaden carve-outs for tariff exemptions; and 2) The U.S. clearly spelling out its demands to China.
Weekly Export Sales Report out this morning... For the week ended May 1, traders expect:
| 2024-25 expectations (in MT) | 2024-25 last week | 2025-26 expectations (in MT) | 2025-26 last week | |
| Corn | 700,000-1,400,000 | 1,014,424 | 0-300,000 | 244,704 |
| Wheat | (100,000)-150,000 | 72,005 | 200,000-400,000 | 238,300 |
| Soybeans | 200,000-500,000 | 428,227 | 0-150,000 | 50,000 |
| Soymeal | 200,000-400,000 | 323,063 | 0 | 5,156 |
| Soyoil | (5,000)-20,000 | 8,200 | 0 | 0 |
Brazil’s May soybean exports expected to decline as exporters eye long shipping season... Brazil’s soybean exports could fall to 12.6 MMT in May despite record supplies and China importing more amid a trade spat with the U.S., according to projections from grain exporters association Anec. AgRural analyst Daniele Siqueira told Reuters soybean shipments in March and April largely reflected front-loaded demand from Chinese buyers ahead of U.S. tariffs. She also noted many grain traders are bracing for a longer exporting season in the current marketing year in part to reduce logistics costs during peak shipping. China will need Brazilian soybeans and has bought large volumes for shipment in May, June and July, Siqueira said. She added Brazil could also ship higher monthly soybean volumes to China and other destinations in the second half of the year, including in the final quarter, depending on the state of tariff talks between Beijing and Washington.
China resumes shipments of Brazilian soybeans from five companies ahead of Lula visit... China has resumed shipments of Brazilian soybeans from five companies previously suspended over phytosanitary issues, a source familiar with the matter told Reuters. The source confirmed that the resumption of supplies began on April 25, weeks before a planned state visit to China by President Luiz Inácio Lula da Silva and at a time when Beijing is trying to form a global coalition against the trade war with the United States. In January that China had suspended imports from units related to Terra Roxa Comércio de Cereais, Olam Brasil, C.Vale Cooperativa Agroindustrial, Cargill Agrícola S.A. and ADM do Brasil. According to a Chinese customs database, all entities with the exact names of the five companies currently have “normal” registration status. The database does not specify a resumption date.
China seeks new rapeseed sources amid trade rift with Canada... China is turning to Australia and India for rapeseed and rapeseed meal imports as a trade dispute with Canada — its top supplier — threatens to disrupt a key feedstock for livestock and aquaculture, Bloomberg reports. Beijing imposed tariffs on Canadian rapeseed meal in March in retaliation for Canadian duties on Chinese goods. Chinese traders are seeking to resume purchases from Australia, the world’s second-largest rapeseed exporter. Shipments had previously dropped to zero due to quality concerns and diplomatic strains. India, the No. 2 global exporter of rapeseed meal, is sending trial shipments this month to test Chinese market reception. Challenges include past concerns over foreign matter and inconsistent protein content. Indian exporters are lobbying Beijing to ease import standards to enable growth beyond the current three approved companies.
Slightly lower Canadian wheat stocks, sharp drop in canola inventories expected... Statistics Canada is expected to report Canadian wheat stocks totaled 13.2 MMT as of March 31, down 460,000 MT (3.4%) from year-ago. Canola stocks are expected fall 3.49 MMT (36.4%) from last year.
USDA releases some info regarding ag disaster aid... USDA Secretary Brooke Rollins announced the agency will soon open applications for nearly $21 billion in disaster relief funding, aimed at helping farmers and ranchers affected by natural disasters over the past two years. Of this aid, $2 billion is specifically allocated for livestock producers, and funds may be distributed through block grants or direct payments. Click here for details.
Ukraine ratifies strategic minerals deal with United States... The Ukrainian parliament ratified a milestone minerals deal with the United States on Thursday. The agreement grants the U.S. preferential access to Ukrainian mineral resources and paves a path for possible new military aid for Kyiv, although it lacks clear security guarantees.
BOE cuts interest rates... The Bank of England (BOE) cut its main interest rate 25 basis points to 4.25%, though with an unexpected split vote. BOE said it thought the increase in tariffs by the U.S. and other countries would weigh somewhat on British economic growth and push down on inflation but stressed how unclear the outlook remained.
Cattle futures pull back despite higher cash trade... Live cattle futures faded from contract highs earlier in the session and finished sharply lower Wednesday, despite early cash trade at steady/higher prices. While this could be an early sign of a top, we view it as a healthy correction. With funds heavily loaded up on the long side, the market needs “pause” days.
Cash hog index gains slowing... The CME lean hog index is up another 3 cents to $90.16 as of May 6, though that’s the smallest daily gain during the extended price climb, suggesting it may be stalling. Pork cutout slipped 16 cents to $95.54 on Wednesday, holding within the choppy range of the past six weeks.
Overnight demand news... Taiwan purchased 99,200 MT of U.S. milling wheat. South Korea purchased two cargoes (65,000 to 70,000 MT each) of corn – one optional origin and one South American – and tendered to buy up to 60,000 MT of soymeal from the U.S., South America or China. Syria passed on a tender to buy 100,000 MT of optional origin milling wheat.
Today’s reports
- 7:30 a.m. Weekly Export Sales — FAS
- 1:00 p.m. U.S. Agricultural Trade Data Update — ERS
- 2:00 p.m. Slaughter Weekly — NASS