Cotton producers: Advance 2025-crop sales, initiate 2026 sales... Cotton futures surged late last week but have since ran into headwinds. Given cotton’s heavy dependence on exports and heightened uncertainty around trade policy, taking advantage of the rally is prudent. We advise cotton producers to sell another 20% of 2025 production, bringing total sales to 40%. Last week’s impressive export sales could be indicating an uptick in demand, which we will watch closely. Our next sales target is 67¢. We also encourage sales of 10% of expected 2026 production. New-crop futures are trading at a hefty premium to old-crop, prompting early sales.
The big takeaway from President Donald Trump’s reaction to the Supreme Court’s decision to strike down tariffs enacted under the International Emergency Economic Powers Act (IEEPA) is that trade uncertainty is back on the rise.
That was on display in outside financial markets Monday, with the Dow Jones Industrial Average falling over 800 points, or 1.7%, the S&P 500 and the Nasdaq Composite also posting sharp losses, while Treasury yields fell alongside the U.S. dollar (more on that below).
Meanwhile, soybeans, which have served as a symbol of the trade war, saw volatile trade, with May initially extending Friday’s losses, bouncing back to score a two-month high, and then ending the day down 3 ½ cents.
- “Just when we thought we’d have more clarity on tariffs after the Supreme Court ruling we of course do not,” said Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, in his widely followed Boock Report newsletter. “Still cloudy for small and medium sized businesses in particular (who make up most of US business in terms of number of companies, about half of the private sector workforce and import about 1/3 of their needed things) and certainly not for those countries we have new trade deals with where the new 15% blanket tariff is above what was agreed upon for some like the UK and for others it is below.”
Trump over the weekend said he would impose a 15% global tariff on imports using the so-called Section 122 authority under the Trade Act of 1974. That can remain in place for 150 days, but would require Congress to approve an extension. At the same time, the administration is pursuing numerous investigations under other mechanisms.
Trade deals that seemed settled now seem to be on shakier ground. And that means those clouds Boockvar pointed out hang over the farm sector, too.
China’s commerce ministry on Monday criticized the decision to implement a 15% levy, saying that unilateral tariffs “violate international trade rules and U.S. domestic law, and are not in the interests of any party.” The ministry said cooperation between the U.S. and China “is beneficial to both sides, but fighting is harmful.”
Implications for China’s soybean purchases remain unclear. Beijing may want to keep buying in a good will gesture ahead of a meeting between Trump and Chinese leader Xi Jinping in late February and early March. At the same time, the move has been characterized widely as a blow to U.S. bargaining power with Beijing. Meanwhile, strong crush demand, hedge fund buying and a slow start to Brazil’s harvest appear to be underpinning the market.
U.S. Trade Representative Jamieson Greer on Sunday brushed off worries the Supreme Court ruling and the administration’s response would undercut Chinese demand, telling Fox News the U.S.-China trade truce wasn’t predicated on the outcome of the tariff case and emphasizing a strong relationship between Xi and Trump.
Meanwhile, renewed weakness in the U.S. dollar is also worth watching. Generally, a weaker dollar is a positive for commodities priced in the currency, making them cheaper to foreign buyers.
- Says Thierry Wizman, global FX and rates strategist at Macquarie: Our weak USD (U.S. dollar) thesis for 2026 was predicated on the idea that US import tariffs are a reflection of US ‘disengagement’ from the US-based rule-based order that upheld free trade. Moreover, the tariff war itself is a source of uncertainty that emanates from the US specifically, and US-centered uncertainty would not be good for the USD. In that regard, the Supreme Court may have improved institutional effectiveness, yet increased uncertainty, since Trump will resume the tariff war under different (more legal) guises which are yet to be revealed. We certainly don’t feel compelled to change our overall view of the USD staying weaker in 2026.
As Boockvar observed, “Putting aside what I think or you think, as seen since April, the stock market seems to like low tariffs and not high ones. The US dollar feels the same.”
Weather rut: While the Northeast digs out from a Nor’easter, the central and southern U.S. Plains look set to remain dry over the next 8 to 9 days, World Weather Inc. said Monday. That includes hard red winter wheat areas and most Texas cropland.
- The forecaster said early season soil moisture for South Texas and northeastern Mexico corn, sorghum and cotton planting will be minimal heading into the first week of March, with rain needed soon thereafter in unirrigated areas.
- Next week’s precipitation will shift to the southern Rocky Mountain region and there may be some opportunity for precipitation from the southeastern Great Plains and Delta into the central and eastern Midwest; though confidence is low, World Weather said.
RFK Jr. defends glyphosate order: Health and Human Services Secretary Robert F. Kennedy Jr. took to social-media platform X on Sunday to defend President Donald Trump’s executive order last week prioritizing U.S. production of glyphosate, a move that angered advocates of the Make America Healthy Again, or MAHA, movement. Kennedy, in a lengthy post, described herbicides and pesticides as “toxic by design” and said that their use in the food system put Americans at risk.” But taking them away would risk a collapse of the agricultural sector, Kennedy said.
- He wrote: Unfortunately, our agricultural system depends heavily on these chemicals. The U.S. represents 4% of the world’s population, yet we use roughly 25% of its pesticides. If these inputs disappeared overnight, crop yields would fall, food prices would surge, and America would experience a massive loss of farms even beyond what we are witnessing today. The consequences would be disastrous.
Kennedy said that the administration is simultaneously “accelerating the transition to regenerative agriculture by expanding farming systems that rebuild soil, increase biodiversity, improve water retention, and reduce reliance on synthetic chemicals, including pre-harvest desiccation.”
Pro Farmer Podcast: What the SCOTUS ruling could mean for soybeans