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In a significant shift, Brazil is considering pushing for a partial trade agreement between the Mercosur bloc and China, Reuters reported, citing senior Brazilian government officials.
Brazil had previously vetoed formal talks with Beijing due to fears a surge in Chinese imports would harm domestic manufacturers. But with Beijing seeking deeper commercial ties and Washington imposing waves of tariffs, the government of President Luiz Inacio Lula da Silva is now reconsidering its stance, the report said. Mercosur is made up of Brazil, Argentina, Uruguay and Paraguay, with Bolivia soon to become a full member.
- The report noted that a joint statement issued during Uruguayan President Yamandu Orsi’s visit to Beijing to meet with President Xi Jinping this week said they hoped free trade negotiations between China and Mercosur could begin “as soon as possible.”
- While a formal, comprehensive deal remains a long way off, two Brazilian government officials told the news agency that a partial Mercosur-China deal is now viewed as a plausible longer-term outcome, spurred by U.S. tariffs on goods from trading partners that have disrupted global commerce and reshaped trade alliances.
- Brazil over the past decade has pushed aside the U.S. as China’s top soybean supplier, a move that was accelerated after the 2018 trade war during President Donald Trump’s first term. Brazil was the primary beneficiary of China’s temporary 2025 boycott of U.S. soybean purchases.
‘Ducks in a row’: The clock is ticking on House Republicans as a Feb. 15 deadline for legislative proposals to authorize the year-round sale of E15, a 15% ethanol blend, draws near. So far, they’ve shut out Democrats from the dealmaking, news reports said.
Rep. Randy Feenstra, an Iowa Republican and co-chair of the E15 Rural Domestic Energy Council, said Wednesday that he feels on track to meet the deadline after a second meeting of the council on Tuesday night, Bloomberg reported. It remains unclear what would follow the legislative proposal, the report said. Republicans aim to consider the plan by a subsequent Feb. 25 deadline for a vote, while trying to square competing interest from ethanol-backing farm groups and small refiners fearful of losing exemptions from annual biofuel blending requirements.
Farm and biofuel groups were livid last month when language authorizing the year-round sale of E15 wasn’t included in must-pass government funding legislation. Opposition from small refiners, who pressed lawmakers with refineries in their states, has been cited as the reason. House Republican leadership instead established the energy council to propose legislation. It’s seen as much more difficult to win passage for a stand-alone bill.
“We’re just trying to get our ducks in a row on how we move things forward,” Feenstra said, according to Bloomberg, when asked if the council would send legislation to the House Energy and Commerce Committee for a formal markup.
HRW wheat drought to ‘expand and intensify’: The U.S. central and southern Plains are due to see another week of drier weather after seeing limited to no precipitation over the past week, said World Weather Inc. on Friday. “Drying rates will be much higher compared to the past week and drought is expected to expand and intensify,” the forecaster wrote. “The need for significant rain and milder temperatures will be high later this month and early March to support better long-term development conditions.”
- There’s potential for increased precipitation in the Feb. 14-20 period, World Weather said, which could provide minor relief for some, but not enough to improve long-term soil conditions.
Dow 50K: Break out the commemorative hats! The Dow Jones Industrial Average on Friday topped the 50,000 milestone for the first time ever, with gains for Nvidia and Caterpillar shares fueling a gain of more than 1,100 points, or over 2%. Bloomberg noted that gains for Caterpillar and Goldman Sachs shares have been the primary driver of a 31% rally over the last six months.
- Big, round numbers are fun. But the more meaningful move to note may be in the Dow Jones Transportation Average, which rose 1% to also hit a new all-time high. Dow Theory, a strategy identified by Wall Street Journal and Dow Jones co-founder Charles H. Dow in the early 1900s, holds that the broader stock market is likely headed higher if two averages, typically the Dow industrials and the Dow transports, hit new highs around the same time. After all, gains for transportation stocks would seem to signal a healthy underlying economy.
World food prices fall: World food prices fell for a fifth straight month in January, with declines in dairy, sugar and meat products leading the way, more than offsetting increases in cereals and vegetable oil, the United Nations’ Food and Agriculture Organization said on Friday.
The FAO’s food price index, which tracks monthly changes in a basket of internationally traded food commodities, averaged 123.9 points in January, down 0.4% from December and 0.6% from a year earlier, and 22.7% from the peak reached in March 2022, the agency said.
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