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President Donald Trump’s threat Monday to impose 25% tariffs on imports from any country doing business with Iran sparked fears of a renewed trade tiff with Beijing. As a result, it got some of the blame for Tuesday’s weakness in soybean futures on worries about the U.S.-China trade truce.
China is Iran’s top trading partner, according to the Observatory of Economic Complexity, an open-source data visualization platform that was spun out of the Massachusetts Institute of Technology. But Brazil could also find itself in the crosshairs, according to Reuters, which noted government data that showed the country ran a $2.9 billion trade surplus with Iran last year. Brazilian exports to Iran consisted mainly of corn and soybeans, making up 67.9% and 19.3% of the country’s total exports to the nation in 2025, the report said. Iran was the main destination for Brazilian corn last year, with imports of 9.1 million metric tons, according to trade data.
Beef prices running hot… Investors received mostly positive inflation data Tuesday, but surging beef prices may remain a potential political target after another big jump in year-over-year figures.
The consumer price index rose 2.7% in December from a year earlier, unchanged from November and in line with the average estimate in a Wall Street Journal survey of economists. Stripping out volatile food and energy costs, the so-called core CPI rose 2.6% year over year, unchanged from November and cooler than the 2.8% expected by economists.
President Donald Trump celebrated the figures on social media. “Great (LOW!) Inflation numbers for the USA. That means that Jerome “Too Late” Powell should cut interest rates, MEANINGFULLY!!! If he doesn’t he will just continue to be, “TOO LATE!””, he wrote on Truth Social, taking a dig at Federal Reserve Chair Jerome Powell.
The inflation rate remains above the Fed’s 2% target, however, and food costs continue to run hot. The Trump administration has appeared increasingly concerned with affordability. Trump has called for a mortgage-buying plan to bring down rates and a cap on credit-card interest rates. And it was high beef prices in October that prompted Trump to declare he’d move to get them down. The administration subsequently expanded the tariff-free quota on Argentine beef imports, viewed as a drop in the bucket, and lifted punitive tariffs on Brazil, a much bigger deal.
Cattle futures plunged from record levels in mid-October as the president turned his focus to beef prices. Live and feeder cattle futures have since clawed back nearly three-quarters of that decline and are entering 2026 with a firm tone.
The attention on beef prices – and resulting market volatility – frustrated cattle producers, who noted that demand has held up strong in the face of high prices and worried that government intervention could mess with market signals. Rebuilding a herd that is the smallest in a half-decade will take time, after all.
Nevertheless, the food components of the CPI report were getting a lot of attention. Beef and veal prices were up 16.4% year-over-year, while ground beef rose 15.5% and roasts and steaks were each up over 17% from December of last year.
Meanwhile, the Trump administration’s recent overhaul of dietary guidelines, including the flipping of the food pyramid to put proteins at the top is seen as another factor likely to boost meat demand. “The food groups now being emphasized generally sit at higher price points,” David Ortega, a professor of food economics and policy at Michigan State University, told Bloomberg. While animal proteins are available at different price points, “the overall category is still costlier than many other alternatives,” he said.
Yen watch… Global investors are paying close attention to the Japanese yen, which fell sharply versus the U.S. dollar Tuesday. One dollar fetched just over 159 yen, after the Japanese currency traded at its weakest versus the greenback in a year-and-a-half. The latest bout of weakness is tied to speculation Japanese Prime Minister Sanae Takaichi will call a snap election in a bid to secure a parliamentary majority for her party. That’s seen boosting Takaichi’s big-spending agenda. As a result, the yen has weakened, Japanese government bond yields have jumped and stocks have rallied. Yen weakness, however, has been a concern, with Japan’s finance minister hinting at the potential for currency market intervention.
Evening Report has highlighted the yen as a potential source of volatility for financial markets. A sudden reversal by the yen could threaten what’s known as the “carry trade,” in which traders borrow in cheap yen to buy higher-yielding assets, such as U.S. Treasuries and equities, elsewhere. A sharp move could force asset liquidation, roiling global markets. A bigger concern, however, would be a sustained rise in Japanese government bond yields, which could make them more attractive to domestic investors who have parked large sums in U.S. Treasuries and other U.S. assets.
No ‘Turnaround Tuesday’… Corn, soybeans and wheat saw further pressure Tuesday, a day after USDA’s largely bearish data dump. March corn fell 1 3/4 cents to $4.19 3/4, hitting a 4 ½ month low. March soybeans sank 10 1/4 cents to $10.38 3/4, hitting a three-month low, while March SRW wheat ticked down 3/4 cent to $5.10 ½ and March HRW shed 7 1/4 cents to $5.19 ½.
Don’t miss: Here’s where USDA found more corn acres in its January report