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CRF lowers Canadian wheat production due to lack of moisture across southern Prairies... Canadian wheat production was lowered by 3% to 35.3 MMT by LSEG Commodities Research & Forecast (CRF), as soil moisture conditions continue to deteriorate across core crop areas of Saskatchewan and Manitoba. CRF estimates planted area at 11.2 million hectares, up 3.4% from last year, but slightly less than the 11.1 million hectares estimated by Stats Canada.
Current soil moisture levels are hovering around at least six-year lows in the top producers Saskatchewan and Manitoba, warranting attention CRF said, though Alberta’s conditions are relatively healthy, providing some relief. LSEG Weather Research team’s June-August forecast calls for warmer- and drier-than-normal conditions across key wheat production areas of western Canada.
Mike Jubinville with MarketsFarm told us spring wheat seeding is nearing completion in the Prairies. He said crop potential at this early stage should be largely unfazed by any threat of irreversible yield damage due to drying of topsoil because many earlier planted crop roots will be into subsoil.
Fed officials fell well positioned but note rising inflation, jobless risks... Federal Reserve officials discussed the “unusually elevated” uncertainty with the U.S. economic outlooks at the May 6-7 Federal Open Market Committee meeting. “Overall, participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increase,” minutes from the meeting said.
Officials noted potential “difficult tradeoffs if inflation proves to be more persistent while the outlooks for growth and employment weaken.” Given the elevated uncertainty, participants agreed it was “appropriate to take a cautious approach until the net economic effects of the array of changes to government policies become clearer.” Still, officials said they felt “well positioned” to wait on clarity for the outlook before making the next monetary policy move.
USDA sending team to Mexico to evaluate NWS situation... A team from USDA will travel to Mexico soon to evaluate the New World Screwworm (NWS) situation, Mexico’s ag ministry said. No new cases of screwworm have been found farther north than one detected two weeks ago about 700 miles from the U.S./Mexican border, USDA’s chief veterinary officer, Rosemary Sifford, told Reuters.
“We want to make sure that we’re comfortable that the way that they’re doing surveillance gives us a good picture of what our risk level is for the fly continuing to move north,” Sifford said. “It’s hard to say exactly when, but (imports will resume) for sure before the end of the year, unless something really dramatically changes.”
Means defends MAHA Commission’s outreach to ag sector... Calley Means, a lead figure behind the Trump administration’s “Make America Healthy Again” (MAHA) initiative, pushed back against criticism from agricultural groups alleging they were sidelined in the drafting of the MAHA Commission’s initial report. In a post on X, Means emphasized that the White House explicitly directed the commission to examine pesticide impacts when it was established. “There is ZERO plan — and in fact it would be insane — to do anything rash to hurt the American farmer,” he wrote. “Again — there was no effort to keep ag stakeholders out of the initial assessment.”
The commission’s preliminary report last week outlined possible contributors to chronic illness, including environmental chemical exposure. Means noted the report “would have no credibility if it didn’t address concerns over the cumulative chemical load.”
Looking ahead, the MAHA Commission is preparing to draft formal policy recommendations aimed at curbing chronic disease — promising, according to Means, deeper consultation with the agricultural community during the development stage.
Sen. Chuck Grassley (R-Iowa) said the MAHA Commission’s initial assessment appeared “a little less strong on pesticides” than expected — a possible signal, he added, that Health and Human Services Secretary Robert F. Kennedy Jr. is taking farmer concerns seriously. “It is in tune with what I’ve been telling [Kennedy]: that he shouldn’t be fooling around with the way we do farming in the United States,” Grassley told reporters. “Maybe that relaxed approach that he used is some indication he’s listening.”
What is TACO trade and why it matters to you... In a recent analysis from The Sevens Report, Tom Essaye breaks down the logic and performance behind a bullish Wall Street acronym now circulating widely: the TACO trade — short for “Trump Always Chickens Out.”
The TACO trade is based on a clear behavioral pattern: President Trump often makes extreme tariff threats, only to walk them back days or weeks later. As Essaye puts it: “Trump has proven to investors that he won’t actually follow through with draconian tariffs... So, any sell-off following a dramatic tariff threat should be bought.” How Has the TACO Trade Performed? According to Essaye, the strategy has worked consistently in 2025:
- S&P 500 rose 2% after March 4 tariffs on Canada, Mexico and China.
- It rebounded nearly 10% from the post-“Liberation Day” April 2 lows.
- It gained 11% after Trump’s 145% tariff threat on China (April 11).
- It’s now trading higher than before the 50% tariff threat on the EU last Friday.
These results, Essaye notes, support the thesis: “Buy the Trump tariff dip.” He argues Trump uses tariff threats as part of his broader strategy: “Threaten an absurdity to achieve a more moderate goal… and that negotiation strategy is working.” But that doesn’t mean tariffs don’t matter. In fact, current tariff levels remain at multi-decade highs:
- 35% on Chinese goods
- 25% on steel and non-USMCA imports
- 10% on energy products
Even if less than initially feared, Essaye warns: “Just because something isn’t as bad as feared, it doesn’t mean it isn’t bad.” Essaye’s conclusion is clear: “Ignore TACO in the long run.” The real drivers of the market, he concludes, will be fundamentals: growth, inflation, interest rates and consumer behavior. TACO may offer short-term trading advantages — but won’t decide the market’s next 20%.
OPEC+ agrees to 2027 baseline production plan ahead of talks... OPEC+ agreed to establish a mechanism for setting baselines for its 2027 oil production. A 22-member group tasked OPEC headquarters with developing a mechanism to assess countries’ maximum production capacity, to be used as reference for 2027 output baselines for all countries, OPEC+ said.
Baselines and quotas are controversial because some members such as the United Arab Emirates and Iraq have increased their production capacity, pressing the case for higher quotas, while others such as African members have seen declines.
Separately, OPEC+ sources told Reuters that talks on Saturday could result in an agreement to further accelerate oil output hikes in July. Eight OPEC+ members who are in the process of gradually raising output are set to meet and may agree to an output hike for July of 411,000 barrels per day, the same as in May and June, two delegates said.