Good morning!
Beans firmer, corn and wheat weaker this morning... Soybeans firmed overnight, while the corn and wheat markets failed to sustain early modest price strength and have weakened and are trading on session lows this morning. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 1 to 3 cents higher, winter wheat markets are around a penny lower and spring wheat is 5 to 6 cents lower. The U.S. dollar index is down nearly 400 points and front-month crude oil futures are about 75 cents lower this morning.
U.S./China trade deal: Tariffs decline, but effective rates still high... Following last weekend’s trade breakthrough in Switzerland, the United States and China have agreed to sharply reduce headline tariffs for 90 days. But a South China Morning Post article says that while the move has eased immediate tensions, the real cost for exporters remains complex — and in many cases, still burdensome. Despite the headline tariff reductions, Chinese exporters are still looking at an average effective rate of about 50%, according to Huatai Securities and U.S. Treasury Secretary Scott Bessent. Some products — like steel and aluminum — remain subject to even higher total rates, with additional 25% duties layered on top. This environment is expected to drive continued workarounds: Transshipment through third countries, undervaluing or mislabeling goods and fulfilling U.S. orders from non-China-based factories. Unless further rounds of talks deliver deeper cuts — or remove cumulative legacy duties — the burden on cross-border trade remains heavy.
Trump set to announce next trade deal after Middle East Trip... President Donald Trump is poised to announce a new trade deal upon his return from the Middle East, according to National Economic Council Director Kevin Hassett. Speaking on Fox News, Hassett revealed there are more than 20 to 25 trade deals currently “really close” to being finalized, signaling a major push in U.S. trade policy as the administration continues its aggressive pursuit of bilateral and sector-specific agreements. Hassett has indicated that the administration’s strategy is to replicate and expand on successful past deals, such as the U.S./UK agreement, by tailoring new agreements to individual countries and sectors. The administration’s flurry of trade activity is being closely watched by industry analysts and markets, as the outcomes will shape the next phase of U.S. economic engagement worldwide.
Thailand optimistic on avoiding tariffs after U.S. praises trade proposals... Thailand is expressing confidence in securing a deal with the Trump administration to avert a looming 36% tariff, following positive remarks from U.S. Treasury Secretary Scott Bessent. Speaking from the Saudi/U.S. Investment Forum, Bessent said trade discussions with several Asian nations — including Thailand — were “going very well,” bolstering Thai hopes of formal negotiations. Finance Minister Pichai Chunhavajira confirmed that Thailand submitted a package of proposals on May 8 to the U.S. Trade Representative, aimed at narrowing its $46 billion trade surplus with the U.S. and deepening economic ties. The proposals include increased Thai imports of U.S. goods — particularly energy, agricultural products, and aircraft — as well as enhanced U.S. market access in Thai agriculture and commitments to deter trade rerouting.
Ruling party member: Japan won’t negotiate expansion of U.S. rice imports... A senior official of Japan’s ruling Liberal Democratic Party (LDP) has ruled out including talks on an expansion of U.S. rice imports in tariff negotiations between Tokyo and Washington, a source close to the matter told Kyodo News. His remarks came as some inside the Japanese government are considering offering to increase American rice imports as part of efforts to win concessions from U.S. tariffs. While increased purchases of U.S. corn and soybeans are seen as possible negotiating tools, some LDP members have voiced opposition to treating rice the same way as other products as it could affect the nation’s food self-sufficiency ratio. Japan has traditionally protected its domestic rice industry in trade negotiations.
Day 1 HRW wheat tour results... Crop scouts on the first day of the Wheat Quality Council’s annual HRW tour of Kansas found a higher yield from field samples than last year across northern areas of the state. The average yield for HRW wheat found in fields between Manhattan, Kansas, and Colby was estimated at 50.5 bu. per acre, up from 49.9 bu. on similar routes last year and the five-year average of 45.1 bu. per acre. That was the tour’s highest Day 1 yield estimate since 2021. Spring rains boosted growth in some of the areas surveyed but scouts observed marked variability, with some fields distressed from drought and others severely affected by wheat streak mosaic. Separately, the Nebraska Wheat Board estimated Nebraska’s average winter wheat yield at 40 bu. per acre and production at 34 million bushels. Officials from Colorado Wheat estimated the state’s yield at 35 bu. per acre and production at 65 million bushels. Scouts will sample fields in western and southern Kansas today on routes from Colby to Wichita.
India’s vegoil imports drop 32% in April on lower palm oil arrivals... India imported 321,446 MT of palm oil in April, down 24.3% from March, according to the Solvent Extractors’ Association of India. Imports of soyoil increased 1.6% to 360,984 MT, while sunflower oil arrivals fell 5.5% to 180,128 MT.
France raises wheat export forecast... France’s ag ministry raised it 2024-25 wheat export forecast outside the EU by 100,000 MT to 3.2 MMT, though would still be down 69% from last year. Wheat shipments within the bloc were raised 130,000 MT to 6.55 MMT. Even after the upward revisions, France’s wheat exports are expected to be the lowest in ag ministry records dating back to 1996-97.
Egypt looking to buy more Russian grain... Egypt is looking to buy more grain from Russia and is ready to broaden the list beyond wheat to include corn and soybean meal, Russia’s agriculture watchdog said. The statement followed talks between the head of the watchdog Sergei Dankvert and Egyptian Agriculture Minister Mostafa El-Sayyad in two-way government commission meetings in Moscow.
Reconciliation/farm bill update... The House Ag Committee kicked off debate Tuesday on its budget reconciliation package with a controversial proposal to require states to share in the cost of food stamps. The plan, which would start in fiscal year (FY) 2028, drew early GOP criticism but won support from at least one previous holdout after the cost-share was scaled down. The bill would reduce the deficit by $296 billion over 10 years — exceeding the $230 billion target in the budget resolution — largely by reshaping the Supplemental Nutrition Assistance Program (SNAP). The reconciliation package also includes new investments in farm policy and conservation programs. The committee will continue with amendment markups today. They will reconvene at 10 a.m. ET today to debate Democrats’ amendments and to vote whether to advance the text out of committee. Meanwhile, Senate Ag Chair John Boozman (R-Ark.) confirmed coordination with House Republicans to include risk management tools in the farm bill portion of the FY 2025 reconciliation package. However, Boozman warned that broader House provisions — such as partial rewrites of the farm bill — may not survive Senate Byrd Rule scrutiny. House Ag Chair GT Thompson (R-Pa.) acknowledged the Senate’s procedural constraints and said he’s worked closely with Boozman and Senate parliamentarians to minimize conflicts.
RFK Jr. to testify before Senate HELP Committee... Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. is scheduled to testify before the Senate Health, Education, Labor, and Pensions (HELP) Committee this afternoon. The hearing marks the first time in at least two decades that an HHS Secretary will appear before the HELP Committee specifically to discuss a presidential budget proposal. Kennedy’s testimony comes amid significant controversy over his sweeping restructuring of the HHS since taking office in February. Of note: The Wall Street Journal on Tuesday evening released an exclusive article that noted Trump administration officials were pushing back on RJK Jr.’s pesticide crackdown. While RFK Jr. last week told Bret Bair a Make America Healthy Again (MAHA) Commission report would be released this week, the White House says it will come May 22.
Choice beef tops $350... Wholesale Choice beef prices firmed $1.96 to $350.10 on Tuesday, topping that level for only the second time. Still, packer margins remain buried deep in the red – the worst in 10 years – as wholesale price strength hasn’t kept pace with surging cash prices.
Slide in cash hog index halted... The CME lean hog index is up 39 cents to $90.31 as of May 12, ending a three-day slide. May lean hog futures, which expire at noon CT today and are settled against the index on May 16, finished Tuesday 66.5 cents above today’s quote.
Overnight demand news... South Korea purchased 65,000 MT of corn (expected to be sourced from South America or South Africa), 60,000 MT of soymeal (to be sourced from the U.S., South America or China) and 64,000 MT of optional origin feed wheat.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Feed Grains Database — ERS
- 2:00 p.m. Cotton and Wool Outlook: May 2025 — ERS
- 2:00 p.m. Feed Outlook: May 2025 — ERS
- 2:00 p.m. Oil Crops Outlook: May 2025 — ERS
- 2:00 p.m. Rice Outlook: May 2025 — ERS
- 2:00 p.m. Wheat Outlook: May 2025 — ERS
- 2:00 p.m. Turkey Hatchery — NASS
- 2:00 p.m. Broiler Hatchery — NASS