Good morning!
Corn and wheat firmer, soybeans lower to start the week... Wheat futures firmed overnight, pulling corn mildly higher this morning, while soybeans weakened. As of 6:30 a.m. CT, corn futures are trading fractionally to 2 cents higher, soybeans are mostly 4 cents lower and wheat futures are 5 to 7 cents higher. The U.S. dollar index is down nearly 550 points and front-month crude oil futures are around $2.50 higher.
Rains expected across central U.S. this week... Most of the Midwest and central two-thirds of the Plains will receive rains this week, with amounts of one to three inches common, according to World Weather Inc. The Delta and Southeast will be drier this week. World Weather anticipates some northward shifting of the greatest rainfall in the second week of June, reducing the rain frequency and significance in the Delta and Tennessee River Basin as well as a part of the Southern Plains.
Trump to double steel tariffs on June 4... President Donald Trump announced the U.S. will double its steel import tariff from 25% to 50% as of Wednesday. The move is designed to further shield the domestic steel industry as the U.S. finalizes a high-profile deal between Japanese-owned Nippon Steel and Pittsburgh-based U.S. Steel. The European Commission swiftly condemned the decision.
Japan, U.S. to hold additional tariff talks before G7 summit... Japanese and U.S. officials have agreed to hold another round of trade negotiations ahead of the G7 summit later this month, after wrapping up their fourth round of tariff talks in Washington on Friday without a final deal. Treasury Secretary Scott Bessent reaffirmed the importance of “addressing tariffs and nontariff measures, increasing investment, and working together to address economic security.” The goal is to secure an agreement that could be jointly announced by Prime Minister Shigeru Ishiba and President Donald Trump during a sideline meeting at the upcoming G7 summit in Canada. On economic security, Japanese Economic and Fiscal Policy Minister Ryosei Akazawa highlighted mutual interest in semiconductors and rare earths, saying both countries are working toward a resilient, complementary supply chain. Japan is also weighing increased imports of U.S. soybeans, corn and defense equipment, while considering technical cooperation to revive the U.S. shipbuilding industry — an initiative backed by President Trump. A joint shipbuilding fund is also under discussion.
U.S., China accuse each other of violating Geneva agreement... Trump on Friday accused China of violating an agreement with the U.S. to mutually roll back tariffs and trade restrictions for critical minerals. China said Trump’s accusations were “groundless,” and promised to take forceful measures to safeguard its interests. In a sharp statement issued Monday, China’s ministry of commerce condemned new U.S. restrictions — ranging from AI chip and software export controls to student visa revocations — as a breach of recent agreements. The flare-up comes amid uncertainty over a leadership-level call Trump says he hopes to hold with Chinese President Xi Jinping.
Soy crush, corn-for-ethanol use expected to decline from March but exceed year-ago... Soybean crush is expected to total 202.0 million bu. in April, according to a Bloomberg survey. That would be down 4.6 million bu. (2.2%) from March but up 24.4 million bu. (13.7%) from last year. Corn-for-ethanol use is expected to total 434.4 million bu., down 19.8 million bu. (4.4%) from March but up 11.8 million bu. (2.8%) from last year.
Ukraine grain exports well behind year-ago... For the first 11 months of 2024-25, Ukraine’s grain exports totaled 38.31 MMT, according to the ag ministry, down 8.65 MMT (18.4%) from the same period last year. That included 20.58 MMT of corn (down 22.6%), 14.86 MMT of wheat (down 14.8%) and 2.31 MMT of barley (down 3.3%).
OPEC+ agrees to another big output hike... OPEC+ announced another big oil production increase totaling 411,000 barrels per day (bpd) for July. Since April, OPEC+ has made or announced increases totaling 1.37 million bpd, or 62% of the 2.2 million bpd the group aims to add back to the market. Higher summer oil demand favors increasing output at this time, OPEC+ officials said.
The week ahead in Washington... Congress is back in session and all eyes will be on the Senate as it starts work on the reconciliation measure passed by the House. Several Republican senators have expressed opposition to President Trump’s “One Big, Beautiful Bill,” citing concerns over its fiscal implications and policy provisions. The economic focus will be Friday’s jobs report highlighting the number of non-farm payrolls added in May. USDA will update ag trade data for April on Thursday, with the trade deficit expected to widen. Still awaited is USDA’s updated ag trade forecast for fiscal year 2025, which was originally scheduled for last week.
China’s manufacturing sector improves in May but still contracts... China’s official manufacturing purchasing managers index (PMI) rose to 49.5 in May from the 16-month low of 49.0 in April, though that still marked the second consecutive month of contraction in factory activity. Output rebounded, while new orders, foreign sales and employment all declined at a slower rate. The private Caixin survey of manufacturing PMI for May will be released this evening.
Cash cattle prices, wholesale beef continue to strengthen... Last week’s official average cash cattle price won’t be released by USDA until later this morning, though all signs point to a higher price for a seventh consecutive week with six of those being record highs. Wholesale beef prices also continued to strengthen, rising 25 cents for Choice to $366.34 and $3.01 for Select to $356.65 on Friday.
Cash hog fundamentals picking up steam... The CME lean hog index is up another 71 cents to $94.84 as of May 29, marking the largest daily gain in the seasonal price increase. Pork cutout firmed $2.60 to $107.22 on Friday. The cash index and pork cutout are both trading at their highest levels since August 2023.
Weekend demand news... Exporters reported no tenders or sales.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 10:00 a.m. Food Expenditure Series — ERS
- 2:00 p.m. Cotton System Consumption and Stocks — NASS
- 2:00 p.m. Fats and Oils: Oilseed Crushings — NASS
- 2:00 p.m. Grain Crushings and Co-Products Production — NASS
- 3:00 p.m. Crop Progress — NASS