Good morning!
Heavy pressure on grains overnight... Corn, soybeans and wheat faced heavy selling overnight coming out of the holiday weekend. As of 6:30 a.m. CT, corn futures are trading 12 to 13 cents lower, soybeans are 19 to 20 cents lower, winter wheat markets are 11 to 12 cents lower and spring wheat is mostly 8 cents lower. The U.S. dollar index is nearly 200 points higher and front-month crude oil futures are trading just below unchanged this morning.
Favorable U.S. crop weather to continue... A ridge of high pressure over western North America will support timely rain and seasonable temperatures in the Midwest during the next 10 days, resulting in “nearly ideal” conditions for crop development, according to World Weather Inc. Hot and dry conditions will be seen across the Pacific Northwest and southwestern corner of Canada’s crop region.
Trump tariff implementation set for Aug. 1... President Donald Trump has said he will not extend the 90-day pause to tariffs that “expires” on Wednesday and will start sending letters to countries specifying the tariff rates they will have to pay, but the increased tariffs will not be implemented until Aug. 1, leaving more time for some countries to negotiate. Without a deal, tariffs currently set at a 10% baseline will go back to the 20% to 49% set on April 2, Treasury Secretary Scott Bessent said.
EU, U.S. near trade pact after Trump/Von der Leyen call... The European Union and U.S. are making headway toward a new trade agreement after a Sunday phone call between European Commission President Ursula von der Leyen and Trump, according to a commission spokesman. With the White House’s July 9 deadline looming, officials say negotiations are entering the “end game” and progress has been made, though final details are still being worked out. Von der Leyen remains in close contact with other EU leaders as talks continue.
South Korea seeks more time as U.S. tariff talks hit snags over tech, ag... South Korea is seeking to extend a 90-day suspension of 25% U.S. tariffs set to expire July 9, with talks slowed by disputes over tech regulation and agricultural market access. South Korea’s proposed regulations on big tech — seen as echoing the EU’s approach — have drawn U.S. criticism for potentially targeting firms like Google, Apple and Meta, while sparing Chinese competitors. Seoul may delay the law amid trade tensions. The U.S. is pressing for greater access to South Korea’s beef, apple and potato markets, but domestic resistance is strong. Seoul’s high rice tariff remains off the table.
Trump threatens extra 10% tariffs on BRICS... Trump said the U.S. will impose an additional 10% tariff on any countries aligning themselves with the “Anti-American policies” of the BRICS group of developing nations, whose leaders kicked off a summit in Brazil on Sunday. In a joint statement at the opening of the BRICS summit in Rio de Janeiro, the group warned the rise in tariffs threatened global trade, continuing its veiled criticism of Trump’s tariff policies. Trump wrote on Truth Social, “Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10% Tariff. There will be no exceptions to this policy. Thank you for your attention to this matter!”
Russia cuts wheat export tax to zero... Russia’s government cut its wheat export tax to zero, effective July 9, Interfax news agency reported on Friday, citing the Russian agriculture ministry. This is the first time the tax has been removed since it was introduced in 2021 to protect the domestic market from price spikes and to discourage excessive exports.
Red Sea attacks escalate as commercial vessel attacked... A commercial ship in the Red Sea was hit by multiple attacks in what appears to be a significant escalation in tactics by Yemen’s Houthi rebel group. This incident marks the first time since December that the Iran-backed group has successfully struck a commercial vessel, according to the Financial Times. The attacks targeted the bulk carrier as it transited a key shipping lane, intensifying concerns about maritime security in the region. The latest assault suggests the Houthis are renewing or evolving their strategy to disrupt global shipping and increase pressure on international trade routes. The incident underscores the persistent threat to commercial vessels operating near Yemen, even as international naval patrols have attempted to deter such actions.
The week ahead in Washington... The Senate will be in this week while the House will no longer be in session after the chamber lost two days of its expected break last week as they came back to vote on the One Big Beautiful bill. The lower chamber was originally to be in this week, but leadership canceled all votes for the week and most committee sessions that were on tap have been postponed. The Senate Appropriations Committee is poised to unveil its first FY 2026 spending bills this week, with less than three months remaining before the new budget year begins on Oct. 1. Among the first three bills scheduled for consideration on Thursday is the Agriculture appropriations measure, which provides funding for USDA and FDA. This week’s economic calendar is light, with Wednesday’s publication of the minutes of the Federal Reserve’s May monetary policy committee meeting being the spotlight. For agriculture, USDA’s July Crop Production and Supply & Demand Reports will be released Friday.
OPEC+ to complete big oil output cut unwinding in September... OPEC+ oil producers are set to approve another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members and the United Arab Emirates’ move to a larger quota, Reuters reported. OPEC+ began to unwind cuts of 2.17 million barrels per day (bpd) in April with a boost of 138,000 bpd. Hikes of 411,000 bpd followed in May, June and July. On Saturday, the group approved a 548,000-bpd jump for August. Five sources familiar with the discussions said the group is likely to approve an increase of around 550,000 bpd for September when it meets on Aug. 3.
China studies resuming chicken imports from Brazil... China is studying ways to soon lift its ban on imports of chicken meat from Brazil that have been in place since a case of highly pathogenic avian influenza was discovered on a commercial farm in mid-May, Brazilian Agriculture Minister Carlos Favaro said. While no timeline for lifting the embargo was discussed, officials from the two sides discussed the situation at the BRICS summit. Last Thursday, seven more countries lifted restrictions on Brazilian poultry, leaving bans in place for nine countries.
Cash cattle weakness to continue... Cash cattle traded lower for a third straight week, though last week’s average cash price won’t be published by USDA until later this morning. Cash sources expect the recent pullback in cash prices to continue this week.
Cash hog fundamentals continue to signal seasonal tops... The latest quote for the CME lean hog index is down another 71 cents to $109.51 as of July 2, the fourth straight daily decline. Pork cutout declined another 54 cents to $110.21 last Thursday, extending its pullback from recent highs.
Holiday weekend demand news... Exporters reported no tenders or sales.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 10:00 a.m. Livestock and Meat International Trade Data — ERS
- 3:00 p.m. Crop Progress — NASS