How Did Traders/Analysts/Farm & Social Media Miss ‘Shocker’ USDA Report on Corn? 

Retaliatory tariffs… here we go again, this time on who is doing business with Iran

LINKS

Link: Video: Wiesemeyer’s Perspectives, Jan. 11 
Link: Audio: Wiesemeyer’s Perspectives, Jan. 11
 

Updates: Policy/News/Markets, Jan. 13, 2026

UP FRONT

 TOP STORIES 

— Trump’s new “Iran business” tariff threat: A sweeping 25% tariff warning tied to Iran dealings raises major uncertainty for global trade, with agriculture exposed if retaliation hits big U.S. farm buyers such as China, India, Turkey and hubs like the UAE.

— USDA dealt a blow to corn and soybean markets: Bigger-than-expected crop tallies slammed prices, deepening concern that any “bridge” support for soybeans could prove inadequate if USDA’s export forecast proves too optimistic.

— USDA absorbs Food for Peace: The long-planned transfer moves the major food-aid commodity program from USAID to USDA, preserving a key export outlet but raising questions about whether humanitarian goals get subordinated to farm/commodity priorities.

— Rollins flags narrowing ag trade deficit, teases wave of new deals: USDA Secretary Brooke Rollins touted a smaller projected 2026 deficit, promised a flurry of trade announcements, announced $80 million in Section 32 specialty crop purchases, and sharpened rhetoric on competition probes and Prop 12’s price impacts.

FINANCIAL MARKETS

— Equities today: Futures lower amid geopolitical tension and renewed “Fed independence” worries ahead of the inflation print; global stocks mixed as traders watch scheduled Fed speakers for any Powell/DOJ fallout signals.

— Equities yesterday: Major U.S. indices eked out gains (Dow, Nasdaq, S&P 500 all modestly higher) as markets looked past Washington noise.

— U.S. inflation holds steady at 2.7%: Headline CPI matched expectations, but shutdown-related data collection gaps and imputation may be distorting the read on underlying inflation — complicating the Fed path.

— CME shifts precious metals margin rules amid volatility surge: CME moves to percentage-of-notional margins for gold, silver, platinum and palladium to better scale collateral needs as prices swing.

— Why stocks didn’t drop on the latest policy shock: The Sevens Report argues investors discounted rhetoric as unlikely to become durable policy, leaned on “TACO,” and saw pro-growth policy tailwinds offsetting headlines.

— JPMorgan beats on trading strength: A solid Q4 print powered by trading revenue kicks off bank earnings, with focus shifting to 2026 guidance, consumer health and regulatory/political risk.

— Detroit déjà vu: auto industry weighs Trump’s mixed policy signals: Auto loan-interest deductibility and softer tariffs helped, but EV credit rollbacks and plant layoffs underscore policy whiplash ahead of Trump’s Detroit speech.

AG MARKETS

— USDA daily export sales (2025/26): New soybean sales reported to China and Mexico, offering a demand datapoint amid broader trade policy uncertainty.

— USDA’s corn shocker: January yield and (especially) harvested acre increases blindsided the trade, reviving the lesson that “big crops can get bigger” when late administrative/survey data reshapes final math.

— Sinograin clears state soybean stocks in latest auction: China’s full sell-through signals active reserve drawdowns and inventory management as recent U.S. soybean buying ramps up.

— Agriculture markets yesterday: Grains mostly lower while soybean oil and livestock were firmer; the tape reflected the post-USDA adjustment in row crops.

FARM POLICY

— Make America more ground beef: a voluntary dairy-to-beef proposal: A social-media-surfaced idea to channel more dairy-origin cattle into ground beef aims to boost supply and support dairy income, but faces steep authority, budget, and industry-pushback hurdles — making implementation unlikely.

TEXAS FARM POLICY

— Texas Ag chief seeks guardrails on data center boom: Sid Miller urges “Agriculture Freedom Zones” to protect prime farmland and water by steering data centers toward less-productive areas via incentives, not mandates.

ENERGY MARKETS & POLICY

— Tuesday: Oil prices climb as Iran unrest trumps supply fears: Crude extends gains on rising Iran risk premium and broader disruption worries, even as potential Venezuelan barrels loom.

— Monday: Oil prices climb on supply risk fears: Brent/WTI hit multi-week highs as traders priced potential Iran disruption, weighed oil-at-sea data, and monitored Venezuela’s return and other supply flashpoints.

— Indonesia’s B50 biodiesel push hinges on oil/palm spread: Jakarta says economics — crude vs. palm oil prices — will determine timing; current conditions favor sticking with B40 while officials prepare for a potential late-2026 B50 shift.

TRADE POLICY

— House backs three-year AGOA, Haiti trade preference extensions — White House stance unclear: Overwhelming House votes revive AGOA/HELP through 2028, but the Trump administration signals preference for a shorter renewal pending reforms.

WEATHER

— NWS outlook: Above-average warmth persists across much of the Lower 48 today, with colder air returning and wintry risks for parts of the Midwest/Great Lakes/Appalachians mid-week.

TOP STORIES— Trump’s new “Iran business” tariff threat: who it hits — and what it could mean for U.S. farm exportsA 25% tariff on any country “doing business” with Iran risks widening trade blowback — especially in key ag markets like China, India and Turkey  President Donald Trump said Monday (Jan. 12) the U.S. will impose a 25% tariff on “any and all business” a country does with the United States if that country is “doing business” with Iran, according to his Truth Social post and subsequent reporting. The White House has not yet published detailed implementing guidance — leaving open major questions about scope (what counts as “doing business”), coverage (goods only vs. services/finance), timing, and legal authority. Who are the countries most exposed? Because the policy is framed broadly, “who gets hit” depends on enforcement definitions. But if the target is countries with large trade ties to Iran and/or material involvement in Iranian oil flows, several stand out: Likely primary exposure (major Iran trade partners:• China• United Arab Emirates (UAE/a key trade hub for Iran)• India• Turkey• Pakistan• Iraq• Russia The 25% tariff threat lands squarely on China, the world’s largest buyer of Iranian oil and a central player in Tehran’s sanctions-evasion network. Analysts say even if the tariffs are never implemented, the rhetoric alone damages trust just as Washington and Beijing were attempting to stabilize relations.The October U.S./China truce, clinched between Trump and Chinese President Xi Jinping during talks in South Korea, eased tensions and secured U.S. access to Chinese rare earths — critical for technology and defense manufacturing. Following the deal, average U.S. tariffs on Chinese goods fell to 30.8% from 40.8%, according to Bloomberg Economics. Trump is now eyeing an April visit to Beijing, a trip that could be complicated by the latest escalation.Iran remains a persistent fault line. While the U.S. has long sought to choke off Tehran’s oil revenue, Beijing has deepened ties with Iran, quietly importing more than 1 million barrels per day through opaque channels beyond Western oversight. Nearly 90% of Iran’s oil exports are believed to flow to China, often at steep discounts that support China’s private refining sector.Complicating matters further, Trump himself surprised markets in June by signaling tolerance for continued Chinese purchases of Iranian oil — undercutting the administration’s renewed “maximum pressure” campaign. That mixed messaging now collides with the latest tariff threat, reviving uncertainty over U.S. strategy.Despite the geopolitical tension, China/Iran trade remains economically marginal for Beijing — less than 0.2% of China’s total trade—but strategically significant. Iranian crude, petrochemicals, and discounted raw materials remain vital inputs for parts of China’s economy, while Beijing serves as a financial and diplomatic lifeline for Tehran.Bottom Line: Trump’s Iran-linked tariff vow reopens a volatile front in U.S./China relations, threatening to unravel a delicate truce at a moment when both sides were seeking leverage without escalation. Even without formal action, the warning alone may reset the tone from cautious détente back toward confrontation.  Oil/shipping-related exposure (countries appearing as destinations outside China in official/analytic tracking): Beyond China, an EIA report citing tanker-tracking data lists destinations that have included Syria, the UAE, Oman, and Venezuela in recent years (outside-China Iranian crude/condensate flows are smaller but notable). Of note: The Wall Street Journal reported that Trump is expected to meet with senior aides Tuesday to decide how to proceed, with options including a potential military strike on the regime sites, cyberattacks, or sanctions. A communications shutdown imposed by authorities on Thursday has largely cut Iranians off from the outside world, further isolating the country during the unrest. Bottom Line: the “country list” is potentially long — but the flashpoints for U.S. agriculture are concentrated in big farm-goods markets that also have meaningful Iran ties, especially China, India, and Turkey, plus the UAE as a regional trading node. Why agriculture is in the line of fire. Even when tariffs are aimed at geopolitics, farm exports often become the easiest political retaliation target (visible, price-sensitive, and regionally concentrated). A recent Congressional Research Service review highlights how retaliatory tariffs have repeatedly landed on U.S. agriculture. The main risk channels for U.S. farm exports 1) Retaliation risk from key buyers (especially China)If the U.S. applies a new 25% tariff penalty to a country over Iran ties, that country could respond with its own countermeasures. In prior trade fights, retaliation commonly hit bulk ag (soybeans, corn, wheat), meats, dairy, and specialty crops. China remains a top-tier destination for U.S. farm goods in many years, and soybeans are heavily exposed to policy shocks. 2) Trade diversion: competitors fill the gapIf tariff escalation disrupts U.S. access or raises landed costs, importers typically pivot — often to Brazil/Argentina in oilseeds, Black Sea/EU in wheat, or alternative protein suppliers in meat. Recent Reuters reporting illustrates how quickly global protein trade flows can re-route when policy and pricing shift. 3) “Collateral damage” in fast-growing but policy-sensitive markets • India is a complex but growing market for U.S. food and ag products; tariff retaliation or broader trade friction can chill that growth path. • Turkey is also an important regional ag processor and re-exporter in certain categories; trade disruption can spill into nearby Middle East demand channels. • The UAE functions as a commercial hub; even if it isn’t a top bulk buyer, disruptions can affect financing, re-exports, and regional distribution. 4) Shipping/finance uncertaintyIf “doing business” is interpreted to include banking, insurance, shipping, or commodity trading linked to Iran, firms may over-comply to reduce risk—creating delays and higher transaction costs that can ripple into global freight, payment, and hedging conditions. What to watch next (for ag-market impact). Because the announcement is high-level, the market impact hinges on details that may arrive quickly: • Definition of “doing business with Iran” (oil purchases? any trade? finance/shipping? third-country transshipment?)• How the tariff stacks with existing U.S. tariffs (additive vs. substituted).• Country-by-country enforcement (blanket threat vs. targeted designations).• Retaliation signals from major ag buyers, especially China and other large importing blocs. For U.S. agriculture, the key question is simple: does this become another broad trade escalation that prompts counter-tariffs or informal buying slowdowns — right as exporters are trying to protect market share? —USDA dealt a blow to corn and soybean markets with its higher-than-expected crop talliesAverage soybean prices sliced 30 cents a bushel; a 10-cent boost for corn USDA’s Farmer Bridge Assistance program looked anemic for soybeans before Monday’s Crop Production and WASDE reports. Now, it looks woefully short of what is needed for any true bridge for soybean producers. It could get worse for the soybean sector as many in the private trade think USDA’s soybean export forecast is too high. Of note: The Trump administration is going to monitor what Congress can get done this spring relative to additional farmer aid. And then they can step in with supplemental aid for beans if prices continue to erode.  —USDA absorbs Food for Peace as administration reshapes foreign aidTransfer was anticipated after Congress green-lighted shift in November stopgap bill USDA has assumed control of the decades-old international Food for Peace program, a move that had been in the works for months following the Trump administration’s dismantling of its former home at the U.S. Agency for International Development. While the handoff has drawn little public attention, it was neither sudden nor accidental. Congress explicitly gave the administration authority to begin shifting Food for Peace in the agriculture funding section of the November 2025 stopgap bill, setting the stage for USDA to take over responsibility for the flagship program that ships U.S. agricultural commodities to food-insecure countries. The transition accelerated after farm-state Republicans warned that stripping funding and capacity from U.S. Agency for International Development would effectively shutter one of the most reliable overseas outlets for U.S. farm products. Lawmakers argued that without a new administrative home, Food for Peace risked becoming collateral damage of the broader rollback of U.S. foreign assistance infrastructure. Behind the scenes, planning has been underway for weeks. Agriculture, nutrition-aid, and humanitarian organizations met at USDA last week to discuss how the department would manage the operational, logistical, and policy challenges tied to absorbing the large-scale food aid program. Participants described the meetings as preparatory rather than exploratory — a signal that the decision to move Food for Peace had effectively already been made. Supporters of the shift say USDA is a more natural fit for a program rooted in commodity procurement and farm surplus management, even if USAID historically handled the diplomatic and humanitarian side of distribution. Critics, however, caution that folding Food for Peace into USDA risks narrowing the program’s mission if humanitarian objectives take a back seat to domestic agricultural priorities. The transfer is already becoming a hallway topic at farm and commodity meetings, where producers and ag groups see Food for Peace not just as aid policy, but as a strategic export channel — one they pushed hard to preserve as the administration reshaped the federal foreign-aid apparatus. —Rollins flags narrowing ag trade deficit, teases wave of new dealsUSDA chief says specialty crop purchases and trade talks aim to shore up farm income as affordability fight widens USDA Secretary Brooke Rollins said Monday that the Trump administration has begun to bend the trajectory of the agricultural trade balance, highlighting a projected $37 billion ag trade deficit for 2026, down from USDA’s $41.5 billion estimate last August. Speaking at the American Farm Bureau Federation annual convention in Anaheim, Rollins framed the improvement as an early sign that trade and domestic support efforts are gaining traction after a sluggish 2025 for new ag market access. Trade push accelerates. Rollins told Farm Bureau members that “at least a dozen more” agricultural trade deals are expected to be announced over the next month, signaling a faster pace of negotiations after industry frustration last year over limited progress. Farm groups have repeatedly warned that the absence of new agreements has left U.S. producers exposed as competitors expand exports into key markets. Section 32 buying to support specialty crops. Alongside trade talks, Rollins said USDA will deploy $80 million in Section 32 purchasing authority to absorb excess supplies of specialty crops, naming almonds, grape juice, pistachios, and raisins. “Section 32 purchases help support our farmers who, through no fault of their own, are facing tough market conditions,” Rollins said, emphasizing the program’s role as a backstop when export demand or domestic consumption softens. Affordability and competition crackdown. Rollins also tied food price pressures to what she called anti-competitive behavior, saying the administration is preparing investigations into potential abuses, “especially by foreign-controlled companies.” The comments align with broader White House messaging that market concentration and supply-chain practices are contributing to stubborn affordability concerns. Prop 12 in the crosshairs. Turning to regulation, Rollins renewed criticism of California Proposition 12, arguing the law’s animal-housing requirements for egg-laying hens, breeding pigs, and veal calves are pushing grocery prices higher nationwide. “This war against consumer choice and against our farmers forces Californians and those who receive those goods across the country to buy more expensive eggs and pork,” she said. Bottom Line: Rollins’ remarks underscore a two-track strategy — accelerating trade deals while leaning on domestic purchasing programs — to stabilize farm income in the near term, paired with a sharper political and regulatory fight over costs, competition, and state-level mandates affecting national food prices.

FINANCIAL MARKETS

—Equities today: U.S. equity futures are lower thanks to ongoing geopolitical tensions overseas and “Fed independence” concerns ahead of a key U.S. inflation report due ahead of the bell as well as the unofficial start of earnings season today. With the Fed in focus amid the Trump/Powell drama from the weekend, the two Fed officials scheduled to speak today: Musalem (10:00 a.m. ET) and Barkin (4:00 p.m. ET) will likely be closely watched for any commentary regarding “Fed Independence.” In Asia, Japan +3.1%. Hong Kong +0.9%. China -0.6%. India -0.3%. In Europe, at midday, London -0.1%. Paris -0.6%. Frankfurt -0.1%.

—Equities yesterday: 

Equity Index	Closing Price  Jan. 12	Point Difference  from Jan. 9	% Difference  from Jan. 9
Dow	49,590.20	+86.13	+0.17%
Nasdaq	23,733.90	+62.56	+0.26%
S&P 500	6,977.27	+10.99	+0.16%

—U.S. inflation holds steady at 2.7%

December figure meets expectations but experts warn of distorted data from government shutdown

U.S. headline inflation held steady at 2.7% year-on-year in December, matching both market expectations and the previous month’s reading — signaling that price pressures, while elevated above the Federal Reserve’s 2% target, have not materially accelerated as 2025 closed out. Economists and market participants had broadly forecast this pace before the Consumer Price Index (CPI) release.

The energy index increased 2.3% and the food index went up 3.1%. Meanwhile, the core annual rate also remained at 2.6%, the lowest since 2021, compared to forecasts it would rise to 2.7%. Compared to the previous month, the CPI edged up 0.3% as anticipated, with shelter costs rising 0.4% and being the largest factor in the all items monthly increase.

However, analysts and economists cautioned that the latest CPI figures may not offer a clear picture of underlying inflation dynamics, due in large part to data distortions stemming from last year’s prolonged U.S. government shutdown. The shutdown disrupted routine price data collection — particularly for rent and other key categories — forcing the Bureau of Labor Statistics to rely on imputation methods that, in some cases, carried forward earlier data rather than capturing newly surveyed prices. These methodological quirks, critics say, could bias both the November and December readings and obscure true price trends.

Some economists view the CPI release as “a mess” and potentially distorted by missing data, making it harder to interpret whether inflation is genuinely stabilizing or merely reflecting statistical gaps.

Persistent inflation around this level complicates the Federal Reserve’s policy path. While a steady 2.7% annual rate is below peaks seen earlier in the post-pandemic period, it remains above the central bank’s target and could delay expectations for further rate cuts if underlying price pressures are proving stickier than headline figures suggest.

Food  The food index increased 3.1% over the last year. The index for food rose 0.7% in December as did the index for food at home. Five of the six major grocery store food group indexes increased in December. The index for other food at home rose 1.6% over the month. The cereals and bakery products index increased 0.6% in December. The index for fruits and vegetables increased 0.5% and the index for nonalcoholic beverages increased 0.4%. The dairy and related products index rose 0.9% in December. In contrast, the index for meats, poultry, fish, and eggs decreased 0.2% in December, as the index for eggs fell 8.2%. The food away from home index also rose 0.7% in December. The index for full service meals rose 0.8% over the month and the index for limited service meals increased 0.6%. The index for food at home rose 2.4% over the 12 months ending in December. The meats, poultry, fish, and eggs index rose 3.9% over the last 12 months. The index for other food at home increased 2.7% over the same period and the index for nonalcoholic beverages rose 5.1%.The cereals and bakery products index increased 1.5% over the 12 months ending in December. The index for fruits and vegetables rose 0.5% over the year. In contrast, the dairy and related products index decreased 0.9% over the same period. The food away from home index rose 4.1% over the last year. The index for full service meals rose 4.9% and the index for limited service meals rose 3.3% over the same period.

—CME shifts precious metals margin rules amid volatility surge

Exchange moves from fixed-dollar margins to%age-based approach for gold, silver, platinum and palladium futures

CME Group will change how it sets margin requirements for gold, silver, platinum and palladium futures, responding to sharp price gains and heightened volatility across precious metals markets.

Under the new framework, margins will be calculated as a%age of a contract’s notional value rather than a fixed dollar amount. The change takes effect from Tuesday’s close and follows what the exchange described as a routine review of market volatility to ensure sufficient collateral coverage.

According to the CME, the percentage-based approach should better scale margins automatically as prices move, reducing the need for frequent manual adjustments. An analyst told Bloomberg that the method “intuitively would be able to capture the margin required,” though the CME retains flexibility to raise margin percentages further if volatility exceeds historical norms or if unexpected market conditions emerge.

The move underscores how exchanges are adapting risk controls as commodities markets experience larger and faster price swings, increasing the potential exposure for traders and clearing members.

—Why stocks didn’t drop on the latest policy shock

Despite a barrage of unsettling Washington headlines, markets again showed an ability to look through political noise and focus on what actually moves growth and earnings 

U.S. stocks once again defied expectations for a selloff, even as investors digested a fresh wave of policy uncertainty tied to President Donald Trump’s rhetoric, proposed interventions and renewed concerns over Federal Reserve independence. According to the Sevens Report, markets’ resilience was not accidental — it reflected a clear-eyed assessment that much of the recent policy drama is unlikely to translate into durable economic damage.

The Sevens Report argues there are three core reasons equities held their ground.

First, markets don’t believe most of the announcements will actually become policy. Proposals such as capping credit card interest rates at 10%, limiting investment firms’ ability to buy single-family homes, or punishing defense contractors over shareholder payouts would all require congressional action. Investors broadly view these moves as political signaling rather than executable policy, and therefore discount their long-term impact.

Second, investors are leaning on what the report bluntly calls “TACO” — Trump Always Chickens Out. The administration has shown a willingness to reverse course when policies begin to threaten growth, markets or business confidence. That history has led investors to assume that even if controversial measures are implemented, they are unlikely to remain in place long enough to do lasting damage.

Third, actual economic stimulus is offsetting the noise. While headlines have focused on threats and investigations, the policies already in force — including tax cuts under the One Big Beautiful Bill Act (OBBBA), deregulation and lower energy prices — are broadly pro-growth. The Sevens Report notes that these tailwinds are only now beginning to show up more fully in economic momentum as 2026 gets underway.

The bottom line, according to the report, is that markets currently see enough real economic support to look past near-term political chaos. That doesn’t mean policy risks should be ignored — sector-specific impacts, particularly in financials and defense, remain possible. But for now, investors appear comfortable betting that growth fundamentals and stimulus outweigh the threats embedded in the latest Washington headlines.

In short, stocks didn’t fall because markets judged that the rhetoric was louder than the reality — at least for now.

—JPMorgan beats on trading strength as Wall Street momentum carries into 2026

Better-than-expected markets revenue lifts fourth-quarter results, putting focus on outlook, consumer health and regulatory risks

JPMorgan Chase & Co. reported fourth-quarter earnings that topped Wall Street expectations, driven by stronger-than-anticipated trading revenue, underscoring the bank sector’s continued benefit from robust markets activity and improving investment-banking conditions.

The bank posted adjusted earnings of $5.23 per share, ahead of the $5.00 consensus, while revenue reached $46.77 billion, topping forecasts of $46.20 billion. Trading operations were the standout, reflecting a rebound in market volatility and client activity that has buoyed large banks for several quarters.

The results land amid what analysts describe as a “Goldilocks” backdrop for the industry: falling interest rates, resilient consumer credit, revived dealmaking and a deregulatory tilt have all supported profitability. Equity markets have also boosted wealth-management fees, helping large banks outperform broader indices. The KBW Bank Index surged 29% last year, beating the S&P 500 for a second consecutive year.

Attention now turns to management’s outlook for 2026. Analysts will press for insight into whether last year’s momentum can be sustained, particularly as questions emerge around consumer spending and a potentially softening labor market. Guidance on the durability of Wall Street trading and mergers activity will be closely watched.

CEO Jamie Dimon, who is scheduled to speak with analysts later Tuesday, is also expected to field questions on political and regulatory uncertainty. That includes President Donald Trump’s call for banks to cap credit-card interest rates at 10% and renewed scrutiny of Federal Reserve independence.

JPMorgan’s report kicks off a busy week for the sector. Bank of America, Citigroup and Wells Fargo report Wednesday, followed by Goldman Sachs and Morgan Stanley on Thursday — offering a broader read on whether the banking industry’s strong run can extend into the new year.

—Detroit déjà vu: auto industry weighs Trump’s mixed policy signals ahead of speech

Tax breaks and softer tariffs have helped Detroit’s Big Three, but EV credit rollbacks and plant layoffs underscore the uncertainty heading into a pivotal election year

When Donald Trump takes the stage in Detroit this afternoon, executives and workers across the U.S. auto industry will be listening with a mix of relief and unease — a familiar posture under an administration that has alternated between carrots and sticks for manufacturers.

The setting itself carries echoes. The last time Trump addressed the Economic Club of Detroit, he was still a candidate, using the forum to roll out a populist-friendly proposal: making auto loan interest tax-deductible. That idea has since moved from campaign rhetoric into law. Congress now allows some taxpayers to deduct interest on vehicle loans — but only for new cars purchased in 2025 and only if final assembly occurred in the United States.

Strip away the fine print, and it functions as a targeted incentive for domestic automakers and U.S.-based production. For Detroit’s legacy manufacturers, it landed alongside another partial win: tariffs that ultimately came in less severe than the administration’s early threats, easing fears of immediate cost shocks to supply chains.

But the ledger cuts both ways. The Trump administration also terminated federal consumer tax credits of up to $7,500 for electric vehicle buyers — a move that hit demand hard. U.S. EV sales in November fell roughly 41% from a year earlier, underscoring how sensitive the market remains to federal policy support, particularly as higher interest rates and price competition from overseas manufacturers persist.

The whiplash is evident on the factory floor. Ford Motor Company recently announced layoffs of about 1,600 workers at a Kentucky electric-vehicle battery plant, citing slower-than-expected EV demand. At the same time, Ford outlined a $2 billion investment to retool the facility to produce battery cells for the electric grid — with plans to reopen the site in 2027 employing roughly 2,100 workers. The pivot highlights how automakers are increasingly hedging between transportation electrification and broader energy-infrastructure markets as Washington’s priorities evolve.

That backdrop frames today’s question in Detroit: does Trump unveil a new policy idea aimed at supercharging U.S. manufacturing — or does he lean into a midterm-season recap, touting tax relief, tariffs, and “America First” industrial policy already on the books?

For an industry still recalibrating product lines, capital spending, and workforce plans around federal signals, the answer matters. In Detroit, the government has clearly giveth — but it has also taketh away, and the auto sector knows better than most that the next policy turn can arrive as quickly as the last.

AG MARKETS

— USDA daily export sales for 2025/26:
• 168,000 MT soybeans to China
• 154,202 MT soybeans to Mexico

 

— USDA’s corn shocker: how the trade missed it — and why “big crops can get bigger” in January

A yield bump is one thing. A harvested-acres surge is what broke models.

USDA’s January numbers blindsided the market because they hit in the two places traders treat as “mostly settled” late in the season: final yield and harvested area.

In the Jan. 12, 2026, NASS Annual Summary, USDA lifted 2025/26 U.S. corn production to 17.0 billion bushels, driven by a +0.5 bpa yield increase to 186.5 bpa and a +1.3 million acre jump in harvested area — and USDA noted harvested area is now up 4.5 million acres since July.

That combination is exactly what most forecasting frameworks are least prepared to handle in January.

Where the trade (and analysts… and especially general farm media) “went wrong”
 

1) Over-anchoring to weather narratives instead of measurement updates

Into January, many desks were primed for yield erosion (late-season dryness pockets, disease chatter, uneven test weights, etc.). But USDA’s January process isn’t a “story” update — it’s a “measurement” update: more Objective Yield survey information, more enumerator-reported field data, more administrative cross-checking, and a last tightening of state-to-national math. NASS explicitly describes Objective Yield surveys as providing data for forecasts and end-of-season estimates of planted/harvested acres, yield, and production.

So the miss wasn’t just “bad weather calls.” It was mis-weighting the probability of USDA’s late statistical revisions.
 

2) Treating harvested acres as nearly fixed after fall

Most private models implicitly assume once combines roll and acreage gets “known,” harvested area only drifts marginally. But USDA has a history of non-trivial late changes when better administrative information arrives (especially from FSA acreage reporting). Reuters has documented this dynamic before: USDA has made “unusual” harvested acre increases after reviewing Farm Service Agency (FSA) acreage registration data, catching analysts off guard.
 

3) Underestimating “residual” acreage: prevent-plant, abandonment, silage vs. grain

The trade often models harvested acres as:
planted acres – (prevent plant + abandonment + chopped for silage + failed acres)

Small errors in any of those components become big when planted area is huge. In a year where USDA already had historically large corn area, even a modest downward revision in abandonment or a shift from silage to grain can translate into million-acre harvested changes.

Does a big crop “usually get bigger” in January?

Not “usually,” but it happens often enough that it should be in everyone’s risk budget. January is when USDA is most willing to make clean, final statistical adjustmentsbecause (a) the crop is largely harvested and (b) NASS has the most complete survey and administrative signals it will have all year. That can mean either direction — but when the prior path featured repeated acreage creep (as USDA explicitly pointed out this year: +4.5 million harvested acres since July), the conditional odds of “one more nudge higher” increase.

The practical takeaway:

• Trend-followers get punished in January when they assume “nothing big can change now.”
• Process-followers do better when they respect January as a methodology-heavy revision window.

Why such a large boost in harvested acres?
 

1) Administrative data gets heavier weight late

FSA acreage data is a key reality check. Producers report cropland annually to FSA for program eligibility, and NASS uses FSA planted acreage data to complement survey data. When those administrative totals come in “louder” than the surveys implied, USDA can — and does —move acres late.
 

2) A long, relatively open harvest window can reduce “lost” acres

An “open harvest period” is directionally right: when fall conditions allow more fieldwork days, fewer acres get stranded (snow, mud, lodging delays, late dry-down bottlenecks). That tends to show up as:

• lower abandonment/failure,
• more marginal fields actually taken,
• fewer acres left for silage or written off.

Even if yield is only nudged, the harvested-acre denominator is where the big bushel math lives.

3) Base-year scale amplifies small%age errors

When harvested area is already enormous, a revision that sounds small in%age terms becomes massive in absolute acres. USDA’s own language underscores just how large the acreage shift has been since July.

Bottom Line for traders (and the sometime hyped farm media): what to change in the model next time

1. Stop treating harvested acres as “done” after October. In big-acre years, keep a real probability mass on a January acre surprise.
2. Track the USDA revision pathway, not just the point estimate. If acres have been creeping higher through the season, don’t assume the creep ends before the final report.
3. Respect the administrative cross-check risk. FSA-driven adjustments are a known mechanism for late acreage changes.

—Sinograin clears state soybean stocks in latest auction

Full sell-through signals Beijing is freeing storage space as recent U.S. soybean purchases ramp up

China’s state grain manager Sinograin sold all 1.1 million metric tons (MMT) of soybeans offered in its fourth auction of state-owned supplies, underscoring strong demand and a deliberate drawdown of government stocks.

According to Reuters, the soybeans — spanning 2022–2025 crop years — fetched an average price of 3,811 yuan per metric ton (about $546/mt), with deliveries largely slated for March and April.

The latest sale follows robust results in December, when roughly 900,000 mt of about 1.5 MMT offered across three installments were sold.

Market participants view the auctions as a strategic move to make room in state stockpiles for recent U.S. soybean purchases, aligning inventory management with fresh import flows.

Bottom Line: Beijing’s complete sell-through points to tightening near-term availability from reserves and reinforces expectations that China is actively rebalancing inventories to accommodate incoming U.S. soybeans.

—Agriculture markets yesterday:

Commodity	Contract Month	Close  Jan. 12	Change from Jan. 9
Corn	March	$4.21 1/2	-24 1/4¢
Soybeans	March	$10.49	-13 1/2¢
Soybean Meal	March	$298.30	-$5.40
Soybean Oil	March	50.27¢	+58 pts
Wheat (SRW)	March	$5.11 1/4	-6¢
Wheat (HRW)	March	$5.26 3/4	-3 1/2¢
Spring Wheat	March	$5.65 3/4	-1 3/4¢
Cotton	March	64.91¢	+50 pts
Live Cattle	February	$235.25	+$1.525
Feeder Cattle	March	$356.175	+$1.475
Lean Hogs	February	$84.425	-87 1/2¢

FARM POLICY

—Make America more ground beef: a voluntary dairy-to-beef supply proposal

Concept aims to channel surplus dairy cattle into ground beef, but faces steep political, budget, and industry hurdles

The “Make America More Ground Beef” (MAMGB) proposal surfaced via social media outlines a voluntary, farmer-first concept that would allow U.S. dairy producers to monetize surplus dairy-origin cattle by moving more animals into the beef supply chain — specifically the ground beef market. Framed as a market-oriented response to tight beef supplies and high grocery prices, the idea is being floated as a potential UUSDA initiative that could launch as early as spring if approved.

How the proposal would work: Under the concept, participating dairy operations would divert additional dairy-origin cattle — animals that might otherwise be culled or marketed at lower value — into beef processing channels. The program’s designers estimate it could redirect 800,000 to 1 million head in spring 2026, translating into roughly 900 million to 1.1 billion pounds of lean trim for the ground beef market.

The stated goals are threefold:

1) Support dairy farm income by creating a clearer outlet for surplus cattle

2) Increase domestic beef availability, particularly lean trim used in ground beef

3) Ease retail price pressure for consumers without imposing mandates

Participation would be entirely voluntary, open to all U.S. dairy operations regardless of size or geography, and structured as an opt-in program rather than a regulatory requirement.

Why implementation odds are low. Despite its straightforward framing, the proposal faces long odds of moving beyond the concept stage:

•No clear statutory authority: USDA would likely need either new congressional authorization or creative use of existing commodity or market-support authorities — both politically difficult.

• Budget constraints: Any incentive-based structure would require funding at a time when farm bill negotiations and discretionary spending caps are already strained.

• Industry resistance: Beef producers and packers may push back against policies that materially alter cattle flows or price relationships, while dairy groups may be split on whether the economics truly pencil out.

• Market distortion concerns: Critics are likely to argue that artificially steering cattle into beef channels risks unintended consequences for prices, regional basis, and long-term herd dynamics.

Bottom Line: MAMGB reflects real frustration with tight beef supplies and weak dairy margins, and it highlights how intertwined the two sectors have become. But absent strong White House backing, congressional buy-in, and industry consensus, the proposal is far more likely to serve as a policy conversation starter than a program that is implemented.

The concept of taking milking cows and sending them to market is not new. The infamous Whole Herd Buyout run by the government in the mid-1980s accomplished that goal of reducing cow numbers to reduce milk output and boost milk prices. But it also came at great cost to the cattle industry as it was the government effectively putting far more beef into the pipeline than the current beef herd was producing.

Over the years, there have been private-run efforts that have attempted to do the same thing — Cooperatives Working Together in particular. But even those efforts were the subject of lawsuits, etc., and were eventually terminated.

Thus, to have this kind of an option, even if voluntary, would still have the government seeking to build beef supplies which would likely send prices for cattle downward and put economic pressure on the cattle industry at a time when they have seen talk of lowering tariffs or boosting beef imports send prices lower.

Cattlemen have taken exception to bringing in more beef and this would potentially see them dump President Trump if they did it, even if it is a voluntary program. And the notation that USDA needs to hear from dairymen. What about cattlemen — beef producers. They need to hear from them too.

TEXAS FARM POLICY

—Texas Ag chief seeks guardrails on data center boom

Sid Miller urges lawmakers to create “Agriculture Freedom Zones” to shield prime farmland and water resources while steering tech growth elsewhere

Texas Agriculture Commissioner Sid Miller is pressing state and federal lawmakers to act before the rapid expansion of data centers permanently eats into the state’s best farm and ranchland. Miller on Monday outlined a proposal to establish Agriculture Freedom Zones (AFZs) — designated areas intended to protect productive soils and scarce water supplies by redirecting data centers and other resource-intensive development toward land less suitable for agriculture.

What Miller is proposing:

• AFZs would steer development toward marginal land, brownfields, arid regions, or locations with existing grid access, rather than prime farmland.

• States would nominate eligible zones, which could then qualify for property tax or other state-level incentives.

• Federal legislation could layer on benefits, including capital-gains tax deferral, reduced taxes on long-term investments, and tax-free appreciation for extended holdings.

The goal, Miller says, is to use targeted tax incentives — not mandates — to guide private investment while keeping high-value agricultural land in production.

Why now: Miller warned that the unchecked spread of data centers threatens long-term food security and water availability, arguing that once farmland is paved over, it is gone for good. He stressed that farmers and ranchers cannot compete financially with data centers or cities for water and land, a dynamic already pushing development onto some of Texas’ most productive acres.

Balancing food and tech: While acknowledging the economic importance of AI, data, and technology infrastructure, Miller framed agriculture as essential national infrastructure that needs explicit protection. AFZs, he argued, would give tech companies clarity on where to build while ensuring food production and rural water needs come first.

Bottom Line: Miller is asking lawmakers to put firm guardrails around irreversible land conversion — protecting agriculture without shutting the door on innovation — as Texas becomes a major hub for AI and data-center investment.

ENERGY MARKETS & POLICY

—Tuesday: Oil prices climb as Iran unrest trumps supply fears

Geopolitical risk premium builds despite looming Venezuelan barrels

Oil prices extended gains Tuesday as escalating unrest in Iran and broader geopolitical risks outweighed concerns about additional supply from Venezuela. Brent crude rose nearly 2% to around $65 a barrel, its highest since mid-November, while U.S. WTI climbed about 2% to roughly $60.70.

Markets are pricing in a growing geopolitical risk premium amid Iran’s largest protests in years, a violent government crackdown, and warnings from President Donald Trump that countries doing business with Iran could face steep U.S. tariffs. Analysts estimate Iran-related tensions have added $3–4 per barrel to prices.

Supply worries were compounded by drone attacks on Greek-managed tankers in the Black Sea and lingering risks tied to Russia-Ukraine dynamics. While Venezuela’s potential return of sanctioned oil could boost supply later, traders say near-term sentiment is firmly driven by geopolitical uncertainty, pushing fears of a glut into the background.

—Monday: Oil prices climb on supply risk fears

Geopolitical tensions in Iran, Venezuela and other producers push crude to multi-week highs

Oil prices rose on Monday, with Brent crude and U.S. West Texas Intermediate futures settling at their highest levels in about seven weeks amid growing concerns that Iranian oil exports could shrink as authorities crack down on nationwide protests.

Brent settled up around 0.8% at roughly $63.87 a barrel, its strongest close since mid-November, while WTI gained about 0.6% to $59.50.

Traders are pricing in the risk that sustained unrest in Iran — a key OPEC producer — could tangibly disrupt supply, even as Tehran maintains communication with Washington. President Donald Trump has weighed responses, including potential military options, after reports of lethal force used against demonstrators.

Data show Iran currently has a record volume of oil at sea — equivalent to roughly 50 days of output — as it seeks to protect shipments amid lower Chinese purchases and geopolitical risk.

Meanwhile, Venezuela is preparing to resume oil exports following the removal of President Nicolás Maduro, with the U.S. expected to receive up to 50 million barrels of sanctioned crude. Oil companies are securing tankers and logistics to move that supply, which has partially tempered upside in prices.

Markets are also watching other potential disruption points — including possible Russian supply issues tied to Ukrainian attacks on energy infrastructure and the looming threat of tighter U.S. sanctions on Moscow — as well as reported drops in Azerbaijani exports and Norway’s plans for oil sector policy.

Bottom Line: Prices are being supported by geopolitical supply risk, even as the prospect of Venezuela’s barrels returning to markets and broader oversupply concerns keep gains in check.

—Indonesia’s B50 biodiesel push hinges on oil/palm price spread

Government signals readiness for higher blend in late 2026, but says current market conditions favor sticking with B40

Indonesia’s plan to move toward a B50 biodiesel blend will ultimately depend on the price relationship between crude oil and crude palm oil, according to Airlangga Hartarto, the country’s coordinating minister for economic affairs.

Airlangga said President Joko Widodo’s current guidance is to maintain the existing B40 mandate — fuel blended with 40% palm-oil-based biodiesel — while officials continue to evaluate conditions for a potential shift to B50. Indonesia has targeted the second half of 2026 for introducing a 50% biodiesel blend, but the move remains conditional.

“For B50, reviews are being continuously conducted and we must monitor the difference between crude oil and crude palm oil prices,” Airlangga said, underscoring that the economics of the program hinge on that spread. While the government is preparing administratively for B50, he cautioned that “under current price conditions, the president’s directive is (to maintain) B40, but be ready for B50.”

Indonesia subsidizes its biodiesel program using revenues from palm oil export taxes, with subsidy levels rising when the gap between crude oil and crude palm oil prices widens. As part of that balancing act, the government is now considering raising the palm oil export levy — a decision Airlangga said could be finalized within days.

The comments highlight how Indonesia’s aggressive biodiesel expansion remains tightly linked to global energy and vegetable oil markets, even as policymakers push to deepen domestic palm oil use and reduce reliance on imported diesel.

TRADE POLICY

—House backs three-year AGOA, Haiti trade preference extensions—White House stance unclear

Bipartisan votes revive lapsed trade programs through 2028, but Trump administration signals preference for shorter, reform-focused renewal

The House on Jan. 12 overwhelmingly approved two bills to reinstate U.S. trade-preference programs for sub-Saharan Africa and Haiti for three years, reviving benefits that expired last fall but leaving open questions about White House support.

Lawmakers passed the African Growth and Opportunity Act (AGOA) reauthorization, sponsored by Ways and Means Chairman Jason Smith (R-Mo.), by a 340–54 vote, followed by the Haiti Economic Lift Program (HELP) measure from Rep. Greg Murphy (R-N.C.), which cleared 345–45. Both bills moved under suspension of the rules, limiting debate and barring amendments.

The legislation would restore duty-free access retroactively for shipments that entered the U.S. during the lapse and extend both programs through the end of 2028. AGOA applies to qualifying sub-Saharan African countries, while HELP covers Haiti. Both programs historically draw bipartisan backing but lapsed Sept. 30 amid a broader government shutdown fight.

Administration officials, however, have voiced skepticism about a multi-year AGOA extension. At a recent Senate hearing, U.S. Trade Representative Jamieson Greer argued the program has not countered China’s influence in Africa and said the White House favors a one-year “clean” reauthorization to allow time for reforms aimed at boosting reciprocal trade and export access.

Floor debate reflected similar tensions. Rep. Lloyd Doggett (D-Tex.) supported AGOA in principle but opposed a longer extension without reforms tied to human-rights and environmental standards, urging instead a short-term renewal paired with accountability measures. Smith countered that a three-year window provides needed certainty for beneficiaries while Congress works on longer-term reforms.

The Office of Management and Budget has not issued a statement indicating whether Donald Trump would sign or veto the bills. Opposition is mounting from the Coalition for a Prosperous America, whose president Jon Toomey argues AGOA has widened U.S. trade deficits, weakened domestic manufacturing, and failed to meet its development and geopolitical goals.

WEATHER

— NWS outlook: Well above average temperatures linger across much of the Lower 48 today; next round of cold air arrives tomorrow… …Wintry weather possible for parts of the Midwest, Great Lakes and Appalachians by mid-week.