Good morning!
Wheat posts corrective gains overnight... Corrective buying in wheat futures early this morning helped pull corn and soybeans off their overnight lows. As of 6:30 a.m. CT, corn futures are trading fractionally higher, soybeans are narrowly mixed and wheat futures are mostly 6 to 10 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly weaker.
Trump to impose 50% tariffs on Brazil, copper imports on Aug. 1... President Donald Trump warned Brazil he will impose a 50% tariff on all Brazilian exports to the U.S. starting Aug. 1 unless President Lula da Silva halts what Trump called a “witch hunt” trial against former president Jair Bolsonaro. Lula said the new tariffs would be met with reciprocal measures. Trump also announced a 50% duty on copper imports will begin Aug. 1.
U.S. ports warn of soaring costs as Trump eyes tariffs on Chinese cranes... U.S. port operators are sounding the alarm that proposed Trump administration tariffs of up to 100% on Chinese-made cranes and other cargo-handling equipment would drive up critical infrastructure costs by tens of millions of dollars. The Wall Street Journal Logistics Report’s Paul Berger notes these tariffs would be added to existing 25% duties imposed by the Biden administration, compounding costs for port authorities already facing limited alternatives — China accounts for more than 70% of global crane production. With Chinese cranes costing around $15 million — several million dollars cheaper than their closest rivals — shipping industry officials warn the extra fees would be devastating, especially given the scarcity of non-Chinese cranes. U.S. ports are urging the administration to exempt crane orders placed before the end of 2024 and to delay tariffs on new orders for three years, arguing that time is needed for domestic or allied manufacturing capacity to ramp up.
Taiwan weighs sharp U.S. auto tariff cut amid intense trade talks... Taiwan is considering slashing its tariff on U.S.-made cars from 17.5% to as low as 2.5% — or even zero — according to local reports, as part of ongoing trade negotiations with the United States. Washington is pressing for an immediate, one-time cut to match its 2.5% rate on imported cars, while Taipei’s negotiators have proposed a slower, 10- to 15-year phase-out. Alternative proposals from Taiwan, such as cutting commodity taxes or lowering tariffs on parts, have not satisfied U.S. negotiators, who insist on a direct reduction for complete vehicles. If Taiwan bows to U.S. demands, local consumers could see cheaper U.S. cars, but domestic manufacturers warn of severe consequences.
Weekly Export Sales Report out this morning... For the week ended July 3, traders expect:
| 2024-25 expectations (in MT) | 2024-25 last week | 2025-26 expectations (in MT) | 2025-26 last week | |
| Corn | 375,000-900,000 | 532,745 | 150,000-700,000 | 940,159 |
| Wheat | NA | NA | 200,000-600,000 | 585,989 |
| Soybeans | 300,000-600,000 | 462,435 | 50,000-400,000 | 239,046 |
| Soymeal | 75,000-400,000 | 306,203 | 50,000-550,000 | 397,357 |
| Soyoil | 0-22,000 | 11,764 | 0-8,000 | 0 |
China’s wheat production nearly unchanged despite drought... China’s wheat output dipped just 0.1% this year, official data showed, despite severe drought in key growing regions, including areas such as Henan and Shaanxi. Wheat production is estimated at 138.16 MMT by China’s National Bureau of Statistics, down 60,000 MT from last year. China’s total summer grain production (including barley, oats and buckwheat, as well legumes and tuber crops) also slipped 0.1% from a year ago to 149.74 MMT.
OPEC trims oil demand for next four years, but says no peak in sight... World demand will average 105 million barrels per day (bpd) this year, OPEC said. It expects demand to average 106.3 million bpd in 2026 and then climb to 111.6 million bpd in 2029. The forecasts for demand in 2026 through 2029 are all lower than last year, as Chinese growth slows. Compared with other forecasters, however, OPEC expects demand to grow for a longer period. The International Energy Agency expects oil use to peak this decade.
USDA closes southern border after new screwworm case detected in Mexico... USDA Secretary Brooke Rollins late Wednesday ordered an immediate shutdown of livestock trade through all southern border ports following the detection of a new case of New World Screwworm (NWS) in Veracruz, Mexico. The case was confirmed by Mexican authorities in Ixhuatlan de Madero — just 370 miles from the U.S. border, raising serious concerns about the effectiveness of Mexico’s containment efforts and forcing USDA to abandon a phased port reopening plan that was scheduled to run from July 7 through mid-September. USDA is maintaining strict animal movement controls, ramping up surveillance and trapping, and advancing plans to expand sterile fly dispersal capabilities in South Texas. USDA will continue to monitor conditions on the ground in Mexico and only consider reopening trade when it is confident the screwworm threat is contained.
Trump administration sues California over egg laws... The Trump administration filed suit against California in federal court, challenging the state’s laws mandating larger cage space for egg-laying hens and stricter egg standards. The Department of Justice (DOJ) argues California’s requirements — including Proposition 12 and AB 1437 — illegally encroach on federal authority under the Egg Products Inspection Act and are fueling a historic rise in egg prices by imposing “unnecessary red tape.” DOJ’s lawsuit, filed Wednesday in the Central District of California, seeks to block both laws, claiming California’s regulations “effectively prevented farmers across the country from using a number of agricultural production methods which were in widespread use — and which helped keep eggs affordable.” The administration further contends that California’s rules amount to an unlawful attempt to regulate the quality, inspection, packaging and labeling of eggs, which DOJ says is the federal government’s sole prerogative.
Wholesale beef prices drop sharply... Wholesale beef prices fell $6.59 to $386.45 for Choice and $5.19 to $373.27 for Select on Wednesday, though movement accelerated to 143 loads, suggesting strong underlying retailer demand. Cash cattle expectations have built through the week, though packers may be reluctant to actively raise bids as they seek to keep margins in the black after an extended period of red ink.
Cash hog index continues to slide, pork cutout inches higher... The CME lean hog index dropped another 29 cents to $107.04 as of July 8, though that’s the smallest daily decline since June 27. Pork cutout firmed a nickel to $112.06 on Thursday, despite weakness in four of the six cuts.
Overnight demand news... South Korea purchased 60,000 MT of optional origin soymeal.
Today’s reports
- 7:30 a.m. Weekly Export Sales — FAS
- 10:00 a.m. Food and Nutrition Assistance Landscape: Fiscal Year 2024 Report — ERS
- 2:00 p.m. Slaughter Weekly — NASS