Good morning!
Grains mostly firmer this morning... Grain and soy markets traded on both sides of unchanged overnight, but have turned mostly firmer early this morning. As of 6:30 a.m. CT, corn futures are unchanged to 2 cents higher, soybeans are trading within a penny of either side of unchanged and wheat futures are 1 to 3 cents higher. The U.S. dollar index is around 660 points lower, gold surged to a record high and front-month crude oil futures are around 50 cents higher.
U.S. seeks to isolate China through tariff negotiations... The Trump administration is leveraging global tariff talks to pressure trading partners into limiting economic ties with China, according to the Wall Street Journal. The strategy, led by Treasury Secretary Scott Bessent, is aimed at undercutting Beijing’s global influence by requiring countries to choose between deeper access to the U.S. market or continued engagement with China. Bessent’s plan calls for over 70 nations to: Block Chinese companies from setting up operations to bypass U.S. tariffs; prevent transshipment of Chinese goods through their territories; and avoid absorbing cheap Chinese industrial output into their economies. China is also working diplomatic channels, with President Xi Jinping signing economic deals with Vietnam this week.
China unexpectedly appoints new trade negotiator amid U.S. tariff war... China unexpectedly appointed a new trade negotiator key in any talks to resolve the escalating tariff war with the U.S. replacing trade tsar Wang Shouwen with its envoy to the World Trade Organization. Li Chenggang, a former assistant commerce minister during the first Trump administration, takes over for Wang. The shift within the top leadership at the commerce ministry comes as Beijing pursues a hardline stance in an intensifying trade war with Washington triggered by Trump’s steep tariffs on items imported from China. The abrupt change also took place in the middle of President Xi Jinping’s tour of Southeast Asia to consolidate economic and trading ties with close neighbors. Xi called for support for the international system centered on United Nations trade rules as he continued his Southeast Asian tour.
Trump pledges new support for farmers amid China trade war... President Donald Trump addressed U.S. farmers directly on Tuesday, acknowledging the growing strain from the intensifying trade conflict with China. In a Truth Social post and public remarks, Trump said American farmers are “always put on the Front Line” during trade disputes, and once again find themselves bearing the brunt of retaliatory tariffs. “Our farmers are GREAT and EXCEPTIONAL,” Trump wrote, but added that their importance often means they become central players in global economic standoffs. Referencing his previous administration’s $28 billion aid package issued during the last trade war with China, Trump claimed the compensation was “all resulting from the China agreement,” and criticized President Biden for failing to uphold its benefits. He said similar support is now under White House consideration, as prices for key crops fall and inventories rise. A senior White House official confirmed that the administration is actively evaluating relief measures for the ag sector. Possible options include new subsidies or targeted payments to offset the impact of Chinese retaliatory tariffs and slowing export demand. USDA Secretary Brooke Rollins said lawmakers should consider raising the $30 billion borrowing cap for the Commodity Credit Corporation (CCC), the fund that could be used to aid farmers in another trade war.
Pakistan looks to appease Trump with soybean, cotton purchase offer... Pakistan will offer to buy more soybeans and cotton from the U.S. as it looks to escape Trump’s tariffs, people with knowledge of the situation told Bloomberg. Pakistan wants to reduce this surplus to below $2 billion from about $4 billion in the year ended in June, the people said. Pakistan is already the second-largest buyer of U.S. cotton by value after China and mainly sells garments and textiles to America, which is its largest export market.
Trump to attend high-stakes U.S./Japan tariff and security talks... The talks in Washington today will center on contentious issues including tariffs, U.S. military cost-sharing, and broader concerns about trade fairness. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick will also attend, underscoring the stakes. Japan currently faces a 10% baseline tariff, plus a 25% duty on automobiles, steel and aluminum. An additional 24% tariff on exports to the U.S. is suspended for 90 days. Japan’s team, led by Economic Revitalization Minister Ryosei Akazawa, wants a full tariff rollback without deep concessions; the U.S. wants increased defense payments and broader trade adjustments. Observers are watching closely as this may set a precedent for other countries navigating U.S. tariffs.
Recent cold spell decreases Russian wheat production potential... Recent cold weather and heavy hailstorms slightly decrease Russia’s wheat production potential to 79.5 MMT, including 54.1 MMT of winter wheat and 25.4 MMT of spring wheat, according to LSEG Commodities Research & Forecast. The past two weeks featured cold weather conditions with snow precipitation, causing some localized cold damage. Soil moisture levels have improved in Volga, Siberian and North Caucasian Districts, but heavy hailstorms in Krasnodar and Stavropol may have caused some damage to the already emerged crops. Government authorities are currently assessing the extent of damage to wheat fields in that region. Forecasts indicate warm and dry conditions over the next two weeks, especially in the European parts of Russia, benefiting re-growth of winter wheat crops coming out of dormancy.
U.S. triggers sugar import safeguards on high-sugar products... USDA’s Foreign Agricultural Service activated safeguard measures on imports of sugar-containing products with over 65% sugar by dry weight, after determining the safeguard trigger of 1,252 MT for fiscal year (FY) 2025 has been reached. A special duty will apply from April 16 through September, according to a Federal Register notice. Imports from Canada, Mexico and 15 other U.S. trading partners – including Chile, Australia, Korea and the Dominican Republic – are not subject to the safeguard duty. Goods en route under contracts settled before April 16 are also exempt.
China’s Q1 GDP tops expectations, though tariffs shock looms... China’s economy grew 5.4% annually in the first quarter, maintaining the same pace as the fourth quarter of last year and the strongest growth rate in 1.5 years amid ongoing stimulus. China’s statistics bureau said the Chinese economy was “off to a good and steady start” and highlighted the growing role of innovation. However, intensifying trade tensions with the U.S. have darkened the outlook, increasing pressure on Beijing to roll out additional support measures.
Chinese industrial output, retail sales and fixed asset investment rise in March... China’s industrial production rose 7.7% from year-ago in March, accelerating from the 5.9% growth recorded in the January–February period. It was the strongest expansion in industrial output since June 2021. China’s retail sales increased 5.9%, the strongest annual growth rate since December 2023. Fixed-asset investment grew 4.2% in the January–March period, despite a 9.9% decline in real estate investment. Excluding the property sector, fixed-asset investment increased 8.3% during the first three months of the year.
China’s Q1 pork output rises 1.2%... China’s pork output rose 1.2% from year-ago in the first quarter to 16.02 MMT. A total of 194.76 million hogs were slaughtered from January to March, a 0.1% increase from the same period last year. Typically, pork output rises in the first quarter due to increased hog slaughter ahead of the Lunar New Year holiday. But the sector remains under pressure, with oversupply and slow demand continuing to weigh on prices and profits. Authorities have taken steps to curb oversupply, as Beijing in 2024 lowered the national target for normal retention of breeding sows to 39 million head from 41 million.
Retailer beef demand stays strong... Wholesale beef prices declined 20 cents for Choice to $335.43 and 61 cents for Select to $315.24 on Tuesday. Movement totaled 147 loads, signaling strong underlying retailer demand. Beef movement has picked up recently as retailers gear up for the end of Lent and start of the grilling season.
Cash hog index continues to fall... The recent decline in the CME lean hog index extended to a tenth straight day, with the index down another 63 cents to $85.37 as of April 14. The pork cutout weakened $1.05 to $91.73 on Tuesday, pressured by a $6.26 decline in primal bellies.
Overnight demand news... Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Tunisia tendered to buy 75,000 MT of optional origin soft milling wheat. Iran tendered to buy up to 120,000 MT of corn from Brazil, the EU or the Black Sea region, 120,000 MT of feed barley from the EU or Black Sea region and 120,000 MT of soymeal from Brazil or Argentina.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: April 2025 ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: April 2025 ERS
- 2:00 p.m. Broiler Hatchery — NASS