First Thing Today | Trade deal deadline arrives, metals tariffs doubled

Ag part of trade deals that could be announced ‘soon.’

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Pro Farmer First Thing Today
(Lindsey Pound)

Good morning!

Grains firmer overnight... Corn and soybean futures built on Tuesday’s gains during the overnight session, while wheat also rebounded from recent losses. As of 6:30 a.m. CT, corn futures are trading mostly 3 cents higher, soybeans are 3 to 4 cents higher and wheat futures are fractionally to 2 cents higher. The U.S. dollar index and front-month crude oil futures are both tethered near unchanged.

Trump laments China talks stalemate... President Donald Trump said Chinese President Xi Jinping is tough and “extremely hard to make a deal with,” days after he and other U.S. officials accused China of violating an agreement to roll back tariffs and trade restrictions. “I like President Xi of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH,” Trump said in a post on Truth Social. Trump’s comments suggest growing frustration within the White House as China’s top trade official, Vice Premier He Lifeng, delays the implementation of key export reforms promised under the Geneva framework. The deal, struck in mid-May, was supposed to unlock mineral export licenses and smooth trade in critical sectors — but has seen little follow-through from Beijing.

U.S. tariffs on steel and aluminum double to 50%... The U.S. officially imposed 50% tariffs on steel and aluminum imports, doubling the previous 25% rate. The sweeping measure affects all countries except the United Kingdom, significantly intensifying trade tensions with major allies and trading partners. The move, aimed at reviving domestic metals production and reducing reliance on foreign supply, drew swift criticism from trade partners in the European Union, Japan, South Korea and India — many of whom are now considering retaliatory measures. The UK has been given a five-week deadline by Trump to finalize a broader trade agreement, following a last-minute reprieve from newly imposed 50% tariffs on steel and aluminum. A key U.S. demand involves the ownership of British Steel, which is currently controlled by China’s Jingye Group despite the UK government’s de facto management. The Trump administration appears to be pressing Starmer to accelerate the process of removing Chinese control — potentially through a full nationalization or new private buyer.

Trade deals could come ‘soon’ as deadline arrives... White House Press Secretary Karoline Leavitt on Tuesday said the administration expects to announce new trade deals “soon,” as the Office of the U.S. Trade Representative has set a deadline of today for countries negotiating over threatened U.S. tariffs to submit their final and best offers. The deadline affects multiple ongoing talks, including with close allies and top trading partners such as the UK, Japan, India and the European Union. According to officials, failure to meet USTR’s terms could trigger a new round of tariffs. Administration sources suggest some countries are scrambling to finalize agriculture access, digital trade and industrial goods terms before the U.S. imposes duties.

China faces steep wheat decline amid drought... China’s wheat production may shrink by as much as 5% in 2025, reaching the lowest output in seven years, as persistent drought scorches major growing regions in the north, Bloomberg reported. Citing a survey of five traders and analysts, Bloomberg said production is expected to fall to between 133 MMT and 135 MMT, compared with last year’s record 140 MMT. That would mark the smallest harvest since 2018’s 131 MMT. Drought has parched fields in Henan and Shaanxi, two of China’s most vital wheat provinces. Despite the projected decline, Bloomberg notes that “ample stockpiles and relatively weak domestic demand are likely to cushion the impact and prevent a supply shock.” However, concerns persist about food security, especially given China’s 15% tariff on U.S. wheat imposed in March, and broader efforts to shield agriculture from geopolitical volatility. State support has increased, with emergency funds and crop nutrition aid deployed, but “the additional expense is a heavy burden to many farmers surviving on already low margins,” Bloomberg said.

Ukrainian corn exports likely to be halved this month amid strong U.S. competition... Ukrainian corn exports are set to fall to 1 MMT in June from 2 MMT last month, as Ukraine-origin corn is uncompetitive compared to its U.S. equivalent, producers’ union UAC said. “In the current conditions, we cannot compete with American suppliers on the European market,” UAC said in a statement, adding that U.S.-origin corn was traded at $230 per MT versus $256 to $260 per MT for Ukrainian corn. UAC noted Ukraine already had limited volumes of corn available for exports in remaining months of 2024-25.

Update on USDA stripping commentary from ag trade forecast... As we reported Tuesday morning, USDA released its Outlook for U.S. Agricultural Trade report this week without the usual accompanying commentary that explains the economic drivers behind its forecasts. According to a Politico report, the omission followed internal disagreements over forecast language, particularly the projected trade deficit. The report maintained a steady outlook for ag exports at $170.5 billion, unchanged from February, while imports are now forecast at a record $220 billion. This results in a projected $49.5 billion agricultural trade deficit for FY2025, up slightly from earlier estimates. Sources told Politico the stripped-down version was due to concerns over how the increasing deficit would be perceived, though USDA confirmed the underlying data remains unchanged.

Senate Ag Committee advances whole milk bill... The Senate Ag panel on Tuesday approved its version of the Whole Milk for Healthy Kids Act, marking a major step toward restoring whole milk as a reimbursable option in federally funded school meal programs. The bipartisan bill mirrors the House-passed version, which aims to reverse Obama-era regulations that removed whole milk from cafeterias in favor of lower-fat options. The bill now heads to the full Senate for consideration.

Wholesale beef prices pull back but remain elevated... Wholesale beef prices weakened 56 cents to $365.44 for Choice and $1.59 to $356.52 for Select on Tuesday. Both are trading just below their recent highs, which were only topped during the historic surge in 2020. Beef movement has slowed but still averaged 116 loads over the past five days.

Strong retailer pork demand... Pork cutout dropped 64 cents to $106.11 on Tuesday, as all cuts except ribs weakened. However, movement improved to 348.5 loads, suggesting strong retailer demand. With wholesale beef prices at the second highest level ever, pork is a value buy at current levels.

Overnight demand news... Bangladesh tendered to buy 50,000 MT of optional origin milling wheat.

Today’s reports