Rollins Halted Beef Tariff Cut Amid Rancher Optics Concern
China signals broader agricultural trade framework following Trump/Xi summit
| LINKS |
Link: DOJ Pressures Bayer to Remove Loyalty Seed Program Restrictions
Link: Cargill Locks Out 1,700 Workers at Fort Morgan Beef Plant
After Contract Rejection
Link: Lumber Futures Seen as Early Test of China’s Commitment
to New U.S. Trade Framework
Link: Video: Wiesemeyer’s Perspectives, May 16
Link: Audio: Wiesemeyer’s Perspectives, May 16
| Updates: Policy/News/Markets, May 21, 2026 |
| UP FRONT |
TOP STORIES
— Rollins halted beef tariff cut amid rancher optics concern: USDA Secretary Brooke Rollins helped block a White House proposal to temporarily reduce tariffs on certain beef imports, reflecting a divide between officials seeking to cool retail prices and those protecting domestic ranchers.
— China signals broader agricultural trade framework following Trump/Xi summit: Beijing released details on agricultural and trade discussions from the Trump-Xi summit, including a potential reciprocal tariff reduction framework, restored U.S. beef and poultry access, and ongoing negotiations over purchase commitments.
— MAGA tax? Economist magazine says Trump-era policies may be costing U.S. growth: The Economist estimates that tariffs, immigration restrictions and policy uncertainty are collectively reducing U.S. annual growth by roughly one percentage point, or about $250 billion per year.
— Motor oil supply fears add another layer of risk for U.S. agriculture: Middle East shipping disruptions are tightening supplies of synthetic lubricants, potentially raising farm operating costs and adding to broader input inflation pressures heading into summer.
— Memorial Day gas prices surge amid Iran war and supply disruptions: National average gasoline prices are expected to hit roughly $4.48 per gallon over the holiday weekend, with analysts warning prices could climb toward $5 per gallon if Strait of Hormuz disruptions persist.
— China reopens market access for three Brazilian beef plants: Beijing approved resumed exports from three previously suspended Brazilian packing plants, including a JBS facility, signaling continued confidence in Brazil’s food safety system amid tight global beef supplies.
FINANCIAL MARKETS
— Equities today: U.S. equity futures are lower following Nvidia earnings that largely met expectations, with weak European PMI data and ongoing Middle East uncertainty weighing on sentiment.
— Equities yesterday: Major indexes rose, with the Dow up 1.31%, the Nasdaq up 1.54% and the S&P 500 up 1.08%.
— Fed minutes show growing concern that inflation could force rate hikes: April FOMC minutes revealed a deepening divide within the Fed, with a majority warning that additional tightening could be needed if inflation remains persistently above target, particularly given energy price pressures from the Middle East conflict.
USDA REORGANIZATION
— Senate Democrats press USDA over planned FNS reorganization: A group of Senate Democrats led by Sen. Amy Klobuchar warned that a proposed restructuring of the Food and Nutrition Service — coming amid significant staffing losses — could undermine administration of SNAP, WIC and school meal programs.
AG MARKETS
— Grain futures rebound off overnight lows ahead of fresh market direction: Corn and wheat futures remained under pressure but recovered from sharper overnight declines, while soybeans held mostly steady amid improving Corn Belt weather forecasts and ongoing macro uncertainty.
— International grain markets mixed as palm oil and Chinese corn rally: European wheat softened on Black Sea competition, while Malaysian palm oil surged on biodiesel demand and tighter vegetable oil supplies, and Chinese corn futures climbed on import expectations.
— Still muted U.S. activity for China in weekly export sales data: USDA’s weekly export sales report showed minimal Chinese buying activity for 2025/26 across major commodities including soybeans, sorghum and upland cotton.
— Agriculture markets yesterday: Corn fell 9½ cents, soybeans dropped 9¾ cents, and most other grain and livestock contracts also declined.
FARM SERVICE AGENCY (FSA)
— County Committees warn FSA staffing cuts threaten farmer services: NAFEC pushed back against the Trump administration’s claim that rapid Farmer Bridge payment delivery demonstrates sufficient staffing levels, warning that continued workforce reductions could disrupt producer services across rural America.
ENERGY MARKETS & POLICY
— Thursday: Oil rebounds as Iran hardens nuclear position, Hormuz uncertainty persists: Brent crude climbed back above $107 per barrel after Iran’s Supreme Leader resisted transferring enriched uranium abroad and Tehran announced new controls over Strait of Hormuz shipping lanes.
— Wednesday: Oil slides on Iran negotiation hopes despite ongoing supply risks: Brent crude fell more than 5% after President Trump signaled negotiations with Iran were nearing their final stages, though analysts cautioned that supply risks remain elevated.
— U.S. oil inventories tighten as SPR drawdown accelerates: Commercial crude inventories fell nearly 8 million barrels last week while the Strategic Petroleum Reserve posted its largest-ever single-week drawdown, raising questions about the sustainability of the current price-suppression strategy.
TRADE POLICY
— USTR presses EU on trade deal compliance: The Trump administration signaled it is closely scrutinizing whether the EU is fully honoring commitments under the recently negotiated trade arrangement, with particular emphasis on non-tariff barriers in agriculture and other sectors.
— Senate Democrats press USTR to toughen labor, forced labor rules in USMCA review: Fifteen Senate Democrats urged USTR Jamieson Greer to use the upcoming USMCA review to strengthen labor protections, crack down on forced labor and address growing Chinese investment in Mexican manufacturing.
MEAT & MEAT INDUSTRY
— FSIS finalizes changes to swine inspection procedures: USDA finalized a rule eliminating mandatory incision of mandibular lymph nodes and viscera palpation in post-mortem swine inspections, a change expected to generate annual industry savings of up to $14.7 million.
WEATHER
— NWS outlook: Rounds of strong to severe thunderstorms are forecast from the central High Plains south through Texas and across the Deep South, with a wet pattern developing across the eastern U.S. ahead of Memorial Day and mountain snow in the northern Rockies.
— Wet pattern deepens fieldwork concerns across Corn Belt: Persistently wet soils are stalling planting progress across the southeastern Corn Belt, with forecast models showing little drying opportunity over the next 15 days and above-normal rainfall expected across much of the Mid-South and Southeast.
| TOP STORIES — Rollins halted beef tariff cut amid rancher optics concernPolitico reported that USDA Secretary Brooke Rollins helped stop a Trump administration plan to temporarily lower tariffs on certain beef imports, underscoring how politically sensitive beef prices and rancher concerns remain inside the White House The proposal, described by a White House official as a “work in progress,” would have lowered tariffs on imports of specific beef items for 200 days as the administration looks for ways to ease historically high beef prices. But Politico reported that Rollins intervened after visiting the Oval Office, with one account saying she “threw a fit.” USDA pushed back on that characterization, saying anyone familiar with Rollins knows “she doesn’t throw fits.” The episode reflects a broader divide inside the administration: Consumer-facing officials are looking for ways to cool retail beef prices, while USDA and ranch-state allies are wary of any move that appears to undercut domestic cattle producers. Others quoted by Politico said Rollins was not alone, with “several” officials raising concerns about the tariff-cut idea. The practical impact on U.S. ranchers may be limited, especially if the action were temporary and narrowly targeted. But politically, the optics are difficult. Lowering beef tariffs while cattle producers are benefiting from tight supplies and record prices risks creating the perception that the White House is using imports to pressure domestic producers. The matter remains unresolved. The White House has not briefed industry or Capitol Hill on the status of the effort, and Politico reported that the tariff plan remains under study rather than dead. — China signals broader agricultural trade framework following Trump/Xi summitBeijing outlines tariff reduction talks, agricultural market access goals and renewed beef and poultry trade as both sides continue negotiations on implementing summit agreements China’s Ministry of Commerce released additional details this week (link) regarding agricultural and trade discussions tied to President Donald Trump’s recent visit to China, signaling that both countries are continuing negotiations on tariff reductions, agricultural purchases and broader trade coordination mechanisms. According to the Chinese Ministry’s summary, U.S. and Chinese trade officials met May 12-13 in South Korea ahead of the Trump-Xi summit in Beijing, where the two sides reportedly held “intensive consultations” and reached “positive consensus” on several trade issues. Among the most significant developments, Chinese officials said both sides agreed in principle to discuss a reciprocal tariff reduction framework covering products valued at more than $30 billion on each side. The proposal would potentially allow many affected goods to qualify for most-favored-nation tariff rates or lower. Chinese officials said the arrangement could stabilize bilateral trade while also serving as a broader model for global trade cooperation. China also confirmed plans to establish intergovernmental Trade and Investment Councils aimed at creating a more structured mechanism for handling bilateral economic disputes and negotiations. Chinese officials said the councils would help move U.S./China trade consultations away from “crisis-style response” and toward a more formalized management structure for ongoing cooperation. Agriculture featured prominently in the discussions, with China describing agricultural trade as an “important component” of the bilateral relationship and acknowledging that U.S. farm goods help address structural supply gaps in China’s domestic market while providing stable income for American farmers. Chinese officials said both countries agreed to work toward reducing non-tariff barriers, expanding market access and increasing two-way agricultural trade under the broader tariff reduction framework. The Ministry also referenced the October 2025 Kuala Lumpur trade truce agreement, which suspended certain tariff and non-tariff measures through Nov. 10, 2026. Chinese officials indicated that both sides remain in communication about extending that arrangement further. On beef and poultry trade, China confirmed it would reinstate registrations for eligible U.S. beef exporters, lift certain highly pathogenic avian influenza-related poultry restrictions and resume imports from some U.S. states. Chinese officials also said they would expedite reviews involving suspended U.S. beef facilities tied to drug residue issues while continuing discussions over agricultural biotechnology concerns raised by the U.S. The Chinese statement also attempted to explain the earlier suspension of some U.S. beef plant registrations, citing concerns over potential cross-species transmission risks tied to highly pathogenic avian influenza in the United States. Meanwhile, questions remain over the scope of China’s agricultural purchase commitments. Beijing has not publicly confirmed White House claims that China agreed to purchase at least $17 billion in additional U.S. agricultural goods beyond previously discussed soybean commitments of 25 million metric tons annually from 2026 through 2028. However, Chinese officials suggested multiple areas of the agreement remain under negotiation and described several provisions as ongoing “work in progress” discussions. The Chinese summary also appeared to reinforce comments previously made by U.S. Trade Representative Jamieson Greer that tariff negotiations were handled primarily by trade officials rather than directly between President Trump and Chinese President Xi Jinping during the summit itself. The Chinese statement also said the two sides agreed to continue the trade detente they reached last fall, including slashing U.S. tariffs on many Chinese imports. That contradicts Trump’s assertion on Friday that the two leaders didn’t discuss tariffs during their two days of meetings in Beijing. — MAGA tax? Economist magazine says Trump-era policies may be costing U.S. growthEconomist magazine analysis argues tariffs, immigration restrictions and policy uncertainty are collectively acting as a drag on the U.S. economy despite continued resilience and strong AI-driven investment. An analysis published by the Economist argues that President Donald Trump’s economic policies are imposing what it calls a “MAGA tax” on the American economy — estimating that trade policy uncertainty, tariffs and immigration restrictions are reducing annual U.S. economic growth by nearly one percentage point, or roughly $250 billion per year. The article, written by Economist economics correspondent Alex Domash, notes that the U.S. economy has remained surprisingly resilient, continuing to grow near a 2% pace despite geopolitical tensions, tariff volatility, immigration crackdowns and broader policy unpredictability. However, the magazine argues that growth should be considerably stronger given the number of pro-business tailwinds currently supporting the economy. According to the analysis, corporate America is operating in an environment that would normally be highly supportive of investment, including deregulation, easier merger approvals, expanded private-credit activity, strong equity markets and fiscal stimulus. Yet outside of artificial intelligence-related spending, business investment remains subdued. The Economist estimates that AI-related investment is currently adding about 0.2 percentage points to annual economic growth, while rising stock markets are contributing another 0.3 percentage points through wealth effects that encourage consumer spending. Combined with tax cuts and other business-friendly policies, the publication estimates those factors should be boosting growth by roughly 0.7 percentage points annually. However, the article argues that tariffs and tighter immigration policies are offsetting much of those gains. The publication estimates that tariffs are reducing household purchasing power and squeezing corporate profit margins, while lower migration levels are slowing labor-force growth. Together, those factors are estimated to reduce growth by roughly 0.4 percentage points annually.The magazine also points to elevated policy uncertainty as a significant economic headwind. It argues that shifting trade policies and unpredictable policymaking are discouraging companies from committing capital expenditures and causing consumers to delay major purchases. As evidence, the article highlights that — excluding AI-related spending — business investment across the broader economy has fallen about 3% over the past year. The Economist characterizes the trend as a “capex recession” that could be shaving another 0.4 percentage points off annual economic growth.Despite those concerns, the publication emphasizes that the U.S. economy remains durable and continues to outperform many global peers. Still, the article concludes that the economy is effectively “running with the handbrake on,” arguing that removing the uncertainty and trade-related drag could allow the U.S. economy to accelerate materially faster. — Motor oil supply fears add another layer of risk for U.S. agricultureMiddle East shipping disruptions are creating legitimate concerns about synthetic lubricant supplies, though the immediate threat to farmers is more likely higher operating costs than widespread machinery shutdowns Multiple industry and financial news outlets and the International Energy Agency have reported that the ongoing Middle East conflict and disruptions tied to the Strait of Hormuz are tightening supplies of specialized petroleum products, including Group III base oils used in synthetic motor oils. The biggest issue is not conventional engine oil, but advanced low-viscosity synthetic lubricants such as 0W-20 and 0W-16 that modern engines increasingly require. Reports have cited rising wholesale prices and tightening availability for those products as refiners and lubricant suppliers struggle with shipping delays and higher feedstock costs. For U.S. farmers, the implications could become meaningful if the disruptions persist into summer and harvest season. Modern farm machinery — especially newer tractors, combines, sprayers and diesel pickup fleets — relies heavily on synthetic lubricants and hydraulic fluids. Many late-model engines require specific low-viscosity oils to meet warranty and emissions requirements, limiting the ability of operators to simply switch to alternative products. The most immediate impact on agriculture would likely be higher maintenance costs and tighter supplies of preferred lubricants. Farmers could also face longer wait times for equipment servicing and rising machinery operating expenses. That comes at a difficult time because producers are already dealing with elevated diesel prices, fertilizer volatility and higher transportation costs tied to the broader energy crisis. There is also a secondary agricultural effect through fertilizer production. Middle East energy disruptions are already affecting natural gas, sulfur and petrochemical markets that are critical to nitrogen and phosphate fertilizer manufacturing. If the lubricant situation worsens alongside broader petroleum supply disruptions, overall farm input inflation could intensify further. If shortages deepen, equipment dealers and farm service providers could begin rationing certain synthetic oils or prioritizing commercial fleets and industrial customers. However, there is not yet widespread evidence of retail agricultural shutdowns or broad inability to obtain motor oil in the United States. At this stage, the situation appears more like an emerging supply squeeze than a full-scale shortage. Analysts continue to warn that if disruptions in the Strait of Hormuz continue for several more weeks, broader petroleum product shortages could emerge globally. The International Energy Agency recently warned that world oil supplies could fall below demand in 2026 because of the Iran conflict and shipping disruptions. Bottom line: For grain and livestock producers, the larger concern may ultimately be inflationary pressure across the farm economy. Higher lubricant, diesel and fertilizer costs raise production expenses at a time when many commodity margins remain tight, potentially squeezing profitability even if crop prices receive some support from inflation and stronger biofuel demand. — Memorial Day gas prices surge amid Iran war and supply disruptionsMiddle East conflict, Strait of Hormuz uncertainty and shrinking U.S. inventories push fuel costs toward record summer levels Americans traveling for Memorial Day are facing some of the highest gasoline prices in history as the war involving Iran continues to disrupt global energy markets and tighten fuel supplies. According to GasBuddy, the national average gasoline price is expected to reach roughly $4.48 per gallon over the holiday weekend — up 42% from a year ago and second only to the record levels seen in 2022 after Russia’s invasion of Ukraine. Analysts warn prices could climb even further if disruptions in the Strait of Hormuz persist. GasBuddy’s Patrick De Haan said average U.S. gasoline prices could hit $5 per gallon next month if shipping through the critical oil transit route remains restricted. The firm projects an average summer gasoline price of about $4.80 per gallon between Memorial Day and Labor Day, which would exceed previous records. The supply situation has intensified as U.S. commercial and emergency oil inventories posted their largest weekly decline on record. The Strategic Petroleum Reserve has reportedly fallen 10% since the conflict began, reaching its lowest level in two years as the Trump administration attempts to stabilize markets through emergency measures. Despite higher costs, AAA estimates a record 39.1 million Americans will travel by car during the holiday weekend. Consumers describe mounting financial pressure from fuel and grocery inflation, with some saying they are postponing travel and reducing household spending. Rising fuel prices have already contributed to inflation pressures, with U.S. inflation nearing 4% in April and real wages declining as consumer costs outpace income growth. Brown University’s Climate Solutions Lab estimated the Iran conflict has added roughly $43 billion in energy costs to consumers, including approximately $24 billion in higher gasoline expenses alone. The political fallout is also growing. A CNN poll found only 21% of Americans approve of President Donald Trump’s handling of gasoline prices, while 75% said the Iran conflict has negatively affected their finances. The White House defended its response, pointing to actions including Strategic Petroleum Reserve releases, waivers to shipping restrictions and broader efforts to stabilize global energy markets. President Trump downplayed the recent spike in fuel costs, calling it “peanuts” and arguing the temporary increase is necessary to prevent Iran from obtaining nuclear weapons. However, some consumers say the higher costs are significantly affecting retirement savings, discretionary spending and travel plans. — China reopens market access for three Brazilian beef plantsDecision signals renewed confidence in Brazil’s food safety system as Beijing continues balancing global beef supplies amid tight import quotas and broader trade negotiations China has approved the resumption of beef exports from three Brazilian meatpacking plants that had been suspended since 2025, according to Brazilian beef industry group Abiec. The decision followed meetings between Brazilian and Chinese officials in Beijing and marks another step in strengthening agricultural trade ties between the two countries. Abiec said the move reinforces Beijing’s confidence in Brazil’s sanitary inspection system and the quality of Brazilian beef production. Among the facilities cleared to resume shipments is the Mozarlândia plant operated by JBS, the world’s largest meatpacker, Abiec President Roberto Perosa told Reuters. The development comes at a critical time for the global beef market. Brazil remains the world’s largest beef exporter, while China is by far its largest customer. Beijing has been attempting to manage rising beef imports under its new quota system, which has already prompted lobbying from Brazil and Australia for additional access after both countries neared their annual export limits. The reopening of the Brazilian facilities also highlights China’s ongoing effort to diversify and stabilize protein supplies while navigating broader trade dynamics with major exporters, including the United States. The decision could modestly improve Brazilian export flows in coming months, particularly as global beef demand remains firm and several importing nations continue grappling with tight cattle supplies and elevated meat prices. |
| FINANCIAL MARKETS |
— Equities today: U.S. equity futures are lower after Nvidia earnings largely met expectations, while markets continue to await developments on a potential ceasefire. Nvidia’s results were solid overall, though a slight miss in data center revenue has left the stock trading little changed overnight.
On the economic front, May flash PMIs from Europe and the UK pointed to a stagflationary backdrop, with weak growth readings remaining below 50 alongside persistent price pressures.
Meanwhile, markets will stay focused on U.S./Iran developments today, and any reversal or softening of yesterday’s reported “progress” would likely weigh broadly on risk sentiment.
In Asia, Japan +3.1%. Hong Kong -1%. China -2%. India -0.2%.
In Europe, at midday, London -0.5%. Paris -0.3%. Frankfurt -0.3%.
— Equities yesterday:
| Equity Index | Closing Price May 20 | Point Difference from May 19 | % Difference from May 19 |
| Dow | 50,009.35 | +645.47 | +1.31% |
| Nasdaq | 26,270.36 | +399.65 | +1.54% |
| S&P 500 | 7,432.97 | +79.36 | +1.08% |
— Fed minutes show growing concern that inflation could force rate hikes
Federal Reserve officials left rates unchanged in April, but the minutes revealed a growing divide inside the central bank as persistent inflation and the Middle East conflict raise the possibility that the next move in interest rates could be higher rather than lower
Minutes from the April 28-29 Federal Open Market Committee meeting showed that “almost all” policymakers supported keeping the federal funds rate unchanged, while Fed Governor Stephan Miran again dissented in favor of a 25-basis-point rate cut.
The document highlighted increasingly divergent views within the Fed over the future path of monetary policy. Several officials indicated they would support rate cuts later this year if inflation continues to ease or if labor market conditions weaken materially. At the same time, a “majority” of participants warned that additional tightening could become necessary if inflation remains persistently above the Fed’s 2% target.
Many policymakers also signaled discomfort with retaining language in the post-meeting statement that implied an easing bias, suggesting some officials wanted a more neutral or even hawkish policy stance.
The Middle East conflict emerged as a central concern throughout the minutes. Fed officials warned that prolonged disruptions could keep oil and commodity prices elevated, intensify supply-chain pressures and delay progress on inflation. A “vast majority” of participants believed inflation could take longer than previously expected to return to target levels because of higher energy prices and geopolitical uncertainty.
Meanwhile, policymakers also expressed concern about labor market risks. Most participants viewed employment risks as tilted to the downside, with some citing business contacts who reported plans to slow hiring due to economic uncertainty and the increasing adoption of artificial intelligence technologies. Several officials warned that a sharper deterioration in labor demand could push unemployment significantly higher.
Fed staff estimated that total Personal Consumption Expenditures inflation rose to 3.5% in March, largely due to higher energy prices, while core PCE inflation was estimated at 3.2%.
Financial markets currently expect little change in interest rates this year, although options pricing showed roughly a 30% probability of a Fed rate hike by the first quarter of 2027.
The minutes also underscored the uncertainty surrounding the eventual transition from Fed Chair Jerome Powell to successor Kevin Warsh. While the meeting minutes made no mention of Powell’s final term, they reflected the difficult backdrop Warsh may inherit — one shaped by elevated inflation risks, geopolitical instability and growing disagreement within the central bank over whether future policy should tighten or ease.
Bottom line, according to the Sevens Report: The minutes reinforced that developments in Iran — and the resulting impact on energy and commodity markets — remain the key driver of Fed policy for the rest of the year. The sooner conditions in the region move back toward normal, the sooner concerns about additional rate hikes are likely to fade. At the same time, the Fed remains highly focused on inflation. If tensions involving Iran persist and energy prices stay elevated, the possibility of rate hikes this summer or into late summer/early fall cannot be dismissed and represents a growing risk for markets. For now, investors appear comfortable with the Fed’s increasingly hawkish tone because markets still assume the Iran situation will eventually stabilize and inflation pressures will moderate. Nothing in the minutes materially changed that view. However, if markets begin pricing in a more aggressively hawkish Fed, that would become a fresh negative for risk assets.
Of note: CME FedWatch: 21.2% for 25 bp rate rise, 40.4% for steady rate decision, 15.3% for 50 bp rise
| USDA REORGANIZATION |
— Senate Democrats press USDA over planned FNS reorganization
Lawmakers warn proposed restructuring could weaken SNAP, WIC and school meal administration amid staffing losses and major policy changes
A group of Senate Democrats led by Senate Agriculture Committee Ranking Member Sen. Amy Klobuchar (D-Minn.) sent a letter Tuesday to USDA Deputy Secretary Stephen Vaden raising concerns that the Trump administration’s planned reorganization of the Food and Nutrition Service (FNS) could undermine the agency’s ability to administer major federal nutrition programs. Link to letter.
The lawmakers argued that the restructuring comes after what they described as significant cuts to nutrition assistance programs and a major loss of agency personnel. The letter states that nearly 30% of FNS staff departed following last year’s Deferred Resignation Program, adding that the agency is already operating with diminished capacity.
FNS oversees 16 nutrition programs, including SNAP, WIC, and the National School Lunch and School Breakfast Programs, which collectively serve tens of millions of Americans. Senators said the administration has already taken actions they believe weakened the food assistance safety net, including canceling more than 90 million pounds of food orders for food banks and schools, implementing major SNAP reductions, and ending a long-running federal food insecurity survey.
The letter specifically targets USDA’s April 30 reorganization announcement, which would reportedly close five of the agency’s seven regional offices and relocate employees based on program responsibilities. The senators warned that the restructuring could reduce coordination across nutrition programs and trigger additional employee departures similar to USDA’s earlier relocation of the Economic Research Service and National Institute of Food and Agriculture.
The lawmakers requested detailed answers from USDA by June 5 regarding the reorganization process, including whether the department conducted a cost-benefit analysis, how it plans to handle union negotiations and employee relocations, and how it intends to maintain timely guidance for states and stakeholders during implementation of new nutrition policy changes.
The senators also questioned how USDA plans to manage anticipated new nutrition standards for school meal programs while simultaneously restructuring the agency and potentially losing additional experienced personnel.
Besides Klobuchar, the letter was signed by numerous Senate Democrats, including Sens. Adam Schiff (D-Calif.), Chris Van Hollen (D-Md.), Patty Murray (D-Wash.), Charles Schumer (D-N.Y.), Cory Booker (D-N.J.), Bernie Sanders (I-Vt.), Raphael Warnock (D-Ga.), John Fetterman (D-Pa.), Alex Padilla (D-Calif.), and others.
| AG MARKETS |
— Grain futures rebound off overnight lows ahead of fresh market direction
Corn and wheat contracts remained under pressure early Thursday, while soybeans held mostly steady as traders monitored weather patterns, export demand and broader macroeconomic signals
Chicago grain futures were mixed early Thursday morning, with corn and wheat contracts still trading lower but recovering from sharper overnight declines as the market stabilized ahead of the U.S. trading session.
Soybeans were little changed, while soybean oil managed modest gains. July soybeans were essentially unchanged at $11.9975 per bushel, while July soybean meal futures slipped 20 cents to $330.70 per short ton. July soybean oil futures were slightly firmer at 74.70 cents per pound, up 0.04 cent.
July corn futures were trading at $4.65 per bushel, down 3/4 cent after earlier overnight weakness.
Wheat markets remained under pressure, though futures also rebounded from session lows. July Chicago soft red winter wheat futures were down 4 cents at $6.565 per bushel, while July Kansas City hard red winter wheat futures declined 4 1/4 cents to $6.945 per bushel.
The overnight trade reflected continued pressure from improving weather forecasts in parts of the U.S. Corn Belt and ongoing uncertainty surrounding export competitiveness, particularly in wheat markets. However, futures moved well off the overnight lows as traders weighed still-wet conditions in portions of the southeastern Corn Belt and Mid-South against generally favorable conditions elsewhere.
Broader outside market influences also remained in focus, including energy price volatility tied to Middle East tensions and shifting currency markets, both of which continue to influence speculative positioning across agricultural commodities.
— International grain markets mixed as palm oil and Chinese corn rally
Wheat values soften on Black Sea competition while vegetable oils and Chinese feed grain markets strengthen on tighter supply expectations
International grain and oilseed markets were mixed on May 21 as wheat prices eased amid continued Black Sea export competition, while palm oil and Chinese corn futures moved higher on tightening supply expectations and stronger import demand signals.
• Paris milling wheat September futures settled at €215 per metric ton, down €1.75 on the session. Using current exchange rates, that equates to roughly $241 per metric ton, or about $6.56 per bushel on a U.S. equivalent basis. Traders pointed to steady Russian export competition and improving crop prospects in parts of the Black Sea region as key bearish factors weighing on European wheat values.
• Russian FOB wheat offers were quoted near $242 per metric ton and described as steady, equivalent to roughly $6.59 per bushel on a U.S. basis. However, Russian grain consultancy IKAR warned that excessive rainfall could begin affecting wheat quality in key production areas. IKAR said Russian wheat crops could be adversely impacted by Fusarium, a fungal disease that can damage kernel quality and reduce production. The report noted that cool and wet weather has persisted across southern Russia, with rains becoming excessive in some areas and preventing producers from applying fungicides to combat disease pressure.
• Meanwhile, Malaysian palm oil July futures rallied 112 ringgit to 4,403 ringgit per metric ton. At current exchange rates, that equals approximately $1,035 per metric ton, or roughly 47 cents per pound on a U.S. equivalent basis. Palm oil prices were supported by higher crude oil markets, improving biodiesel demand prospects and tightening global vegetable oil supplies.
• In China, Dalian July corn futures climbed to 2,873 yuan per metric ton amid expectations for larger Chinese corn imports later this year. The contract equates to approximately $399 per metric ton, or about $10.14 per bushel on a U.S. equivalent basis. Traders cited firm domestic feed demand and concerns about future supply availability as reasons behind the rally, with markets increasingly anticipating additional imports if global weather risks intensify during the Northern Hemisphere growing season.
— Still muted U.S. activity for China in weekly export sales data. USDA weekly Export Sales data for the week ended May 14 continued to show minimal activity for China for 2025/26, with net sales of 130,100 MT of sorghum (new sales of 5,100 MT), 5,038 MT of soybeans, 3,378 running bales of upland cotton (new sales of 7,848 running bales). Activity for 2026 included 1,362 MT of pork (1,491 MT of new sales).
— Agriculture markets yesterday:
| Commodity | Contract Month | Closing Price (May 20) | Change from May 19 |
| Corn | July | $4.65 3/4 | -9 1/2 cents |
| Soybeans | July | $11.99 3/4 | -9 3/4 cents |
| Soybean Meal | July | $330.90 | -$1.40 |
| Soybean Oil | July | 74.66 cents | -78 points |
| Wheat (SRW) | July | $6.60 1/2 | -6 3/4 cents |
| Wheat (HRW) | July | $6.98 3/4 | -5 cents |
| Spring Wheat | September | $7.16 1/4 | -1 3/4 cents |
| Cotton | July | 81.60 cents | -73 points |
| Live Cattle | June | $253.275 | -$1.275 |
| Feeder Cattle | August | $365.775 | +$2.125 |
| Lean Hogs | June | $97.275 | -$0.65 |
Note: Changes shown are from May 19 closing prices. Green indicates a gain; red indicates a decline.
| FARM SERVICE AGENCY (FSA) |
— County Committees warn FSA staffing cuts threaten farmer services
NAFEC pushes back on Trump administration claims that rapid Farmer Bridge payment delivery proves county office staffing levels are sufficient
The National Association of Farmer-elected Committees (NAFEC) on Wednesday warned that staffing shortages at local Farm Service Agency offices could undermine future farm program delivery, despite the Trump administration pointing to the rapid rollout of Farmer Bridge assistance payments as evidence that county office staffing levels remain adequate.
In a sharply worded statement, NAFEC argued that the quick distribution of recent payments reflected the extraordinary efforts of existing county office staff — not excess staffing capacity — and cautioned that continued workforce reductions could significantly disrupt producer services across rural America. “NAFEC is concerned that the administration is focused on cutting local staff in the countryside, while maintaining staffing at the national level,” the organization said.
The comments highlight growing concern within farm country over USDA staffing reductions, including early retirements and buyouts that have affected local FSA offices responsible for administering commodity, conservation, disaster and loan programs.
NAFEC Executive Vice President Craig Turner said local staffing is essential to maintaining the agency’s long-standing reputation for direct producer service. “Keeping local staffing in our local communities is essential if we wish to maintain the level of service that has made FSA the Can Do Agency,” Turner said. “Without additional staffing, producer service will be disrupted.”
Turner warned that reduced staffing could make it harder for producers to receive in-person assistance with program enrollment, eligibility determinations and payment processing — functions many producers, particularly smaller operators and older farmers, still rely upon heavily for navigating USDA programs.
NAFEC also pushed back against suggestions that automation and software systems largely drove the speedy delivery of Farmer Bridge payments. The group said local county office employees had already completed extensive groundwork throughout the year to verify acreage data, determine eligibility, review accounts and ensure payments were accurate before the assistance was distributed. “The software, while beneficial, did not magically identify all the acres of crops needed to determine the payment rates,” the group said. “These actions were all performed throughout the year by FSA county office staff.”
The organization added that many local employees worked extended hours — often unofficially — to complete the work amid already-thin staffing levels.
The dispute reflects a broader tension emerging within USDA and the Trump administration over federal workforce reductions and restructuring efforts. While administration officials have emphasized efficiency gains and modernization efforts, local farm program administrators argue that many USDA services remain heavily dependent on experienced county-level staff with direct knowledge of producers and local farming conditions.
NAFEC urged farmers and ranchers to contact members of Congress and advocate for increased staffing levels at county FSA offices, warning that continued attrition could eventually slow payment processing, reduce service accessibility and strain remaining employees during periods of heavy program demand.
| ENERGY MARKETS & POLICY |
— Thursday: Oil rebounds as Iran hardens nuclear position, Hormuz uncertainty persists
Brent crude prices climb back above $107 a barrel as Tehran signals tougher negotiating stance and tighter control over Strait of Hormuz shipping lanes
Brent crude futures rose roughly 2% Thursday to trade above $107 per barrel, recovering part of the nearly 6% decline seen over the previous two sessions as traders reassessed the likelihood of a near-term diplomatic breakthrough between the U.S. and Iran. The rebound reflects growing skepticism that tensions in the Persian Gulf will ease quickly or that shipping flows through the Strait of Hormuz will fully normalize in the near future. U.S. WTI crude oil futures rose to around $101 per barrel.
According to Reuters, Iran’s Supreme Leader directed that the country’s near-weapons-grade uranium should not be transferred abroad, reinforcing Tehran’s resistance to one of Washington’s core demands in ongoing negotiations. The move was viewed by energy markets as a sign that the talks remain far apart on critical nuclear issues despite intermittent signals of progress from both sides.
Meanwhile, Iranian authorities announced the establishment of a “Persian Gulf Strait Authority,” saying the government would enforce a “controlled maritime zone” in the Strait of Hormuz. The announcement added another layer of uncertainty surrounding one of the world’s most critical energy chokepoints, through which roughly one-fifth of global oil and LNG supplies typically transit.
The renewed geopolitical concerns helped stabilize oil prices after sharp recent declines sparked by optimism that diplomacy might reduce regional risks. Even with the recent pullback, crude remains nearly 50% above pre-war levels as supply disruptions, tighter export flows and continued inventory declines underpin the market.
U.S. petroleum inventories also continue to provide support to prices. The U.S. withdrew nearly 10 million barrels from the Strategic Petroleum Reserve last week — the largest weekly release on record — underscoring the degree to which policymakers are attempting to cushion the domestic market from elevated fuel costs and global supply uncertainty. (See related item below for more on the SPR drawdown.)
Meanwhile, traders continue to monitor whether any eventual agreement between Washington and Tehran would include meaningful guarantees on maritime security and unrestricted shipping access through Hormuz, an issue that remains central to global energy markets and inflation expectations.
— Wednesday: Oil slides on Iran negotiation hopes despite ongoing supply risks
Markets retreat after Trump signals progress with Tehran, though Strait of Hormuz disruptions and tightening inventories continue to support long-term bullish concerns
Oil prices fell sharply Wednesday after President Donald Trump said negotiations with Iran were entering their final stages, fueling hopes that tensions in the Middle East could eventually ease and reduce risks to global crude supplies.
Brent crude settled down 5.6% at $105.02 per barrel, while U.S. West Texas Intermediate crude dropped 5.7% to $98.26. The selloff came after Trump suggested diplomacy was advancing, though he also warned further military action remained possible if Iran refused to reach an agreement.
Iran signaled some willingness to cooperate on shipping security through the Strait of Hormuz, with foreign ministry spokesperson Esmaeil Baghaei saying Tehran was prepared to work with neighboring Gulf states on safe-passage protocols.
Even so, analysts cautioned that markets remain highly vulnerable to prolonged supply disruptions. Traders noted that crude prices are still roughly 50% above pre-conflict levels, reflecting persistent concerns about constrained exports and shipping bottlenecks.
Analysts at Citi said Brent could still climb toward $120 per barrel, arguing markets may be underestimating the risk of sustained outages. Meanwhile, Wood Mackenzie warned prices could approach $200 per barrel if the Strait of Hormuz remains largely closed through year-end.
Shipping flows through the strait remain severely impaired. Only a limited number of tankers have resumed transit, and vessel traffic remains far below normal levels seen before the conflict began. Abu Dhabi National Oil Company said restoring flows to 80% of pre-war levels could take at least four months.
Meanwhile, global inventories continue tightening. The U.S. Energy Information Administration reported crude oil stockpiles fell by 7.9 million barrels last week — far larger than expected — underscoring ongoing supply strain despite Wednesday’s price decline.
Market participants also continued monitoring Russia’s role in global energy markets after Russian Deputy Prime Minister Alexander Novak said some countries were easing restrictions on Russian crude exports because global markets could not function effectively without those supplies.
— U.S. oil inventories tighten as SPR drawdown accelerates
Zachary Davis with the Nesvick Trading Group warned that record crude exports and the fastest-ever Strategic Petroleum Reserve release pace are masking tightening global supply conditions and leaving the U.S. with a shrinking buffer against prolonged Middle East disruptions
Commercial U.S. crude oil inventories fell by 7.9 million barrels last week to 445 million barrels, far exceeding analyst expectations for a 2.9-million-barrel decline and pushing inventories to their lowest commercial level in nearly a year, according to analysis from Zachary Davis at Nesvick Trading Group.
The larger concern, however, centered on the Strategic Petroleum Reserve (SPR), which posted an 8.6-million-barrel weekly decline — the largest single-week SPR release on record. The drawdown equates to roughly a 1.3 million-barrel-per-day release pace, significantly above the average pace seen during the major 2022 SPR release campaign.
Meanwhile, U.S. crude exports surged to 5.6 million barrels per day last week and have averaged 5.3 million barrels per day so far this month, the strongest monthly export pace ever recorded. The U.S. also recently became a net crude exporter, underscoring the degree to which American barrels are helping offset tightening global supplies tied to the ongoing Iran conflict and disruptions surrounding the Strait of Hormuz.
The analysis argued that the combination of record exports and aggressive SPR releases is effectively serving two goals simultaneously — supplying overseas markets facing shortages while helping restrain domestic fuel prices by increasing available supply inside the U.S. market.
Meanwhile, the sustainability of that strategy is increasingly being questioned. The SPR currently holds about 384 million barrels, sharply below the roughly 635 million barrels held before the 2022 emergency release campaign began. At a sustained release pace near 1.4 million barrels per day, the remaining reserve would theoretically last only about 38 weeks, although operational constraints would likely limit sustained withdrawals well before that point.
The analysis suggested that the current cap on crude prices may be more “mechanical rather than structural,” meaning prices are being restrained primarily through government stock releases rather than through genuine improvements in global supply fundamentals. With the Iran conflict unresolved and shipping disruptions still limiting normal energy flows, the shrinking reserve buffer could leave global crude markets increasingly vulnerable to supply shocks later this year.
| TRADE POLICY |
— USTR presses EU on trade deal compliance
U.S. officials say tariff reductions alone will not satisfy Washington as the Trump administration intensifies scrutiny of European regulatory barriers and implementation of the broader U.S./EU trade framework
The Office of the U.S. Trade Representative signaled this week that the Trump administration is closely evaluating whether the European Union is fully implementing commitments tied to the recently negotiated U.S.-EU trade arrangement, underscoring that Washington’s concerns extend well beyond tariffs.
In a statement (link), USTR said it will continue reviewing “certain limiting amendments” contained in current EU legislation to determine whether the bloc’s actions comply with the commitments outlined in the joint U.S.-EU statement. The agency stressed that tariff concessions represent only one component of the broader agreement and argued that longstanding non-tariff barriers and regulatory restrictions continue to hinder U.S. exports and investment access across Europe.
The comments suggest the administration is increasingly focused on enforcement and implementation rather than simply headline tariff reductions. USTR indicated the EU must address regulatory policies that Washington believes unfairly restrict U.S. market access in areas ranging from agriculture and food standards to industrial goods, digital trade and other sectors.
The statement also reflects broader Trump administration trade strategy priorities, which have increasingly centered on using trade negotiations to force structural regulatory changes among major trading partners rather than relying solely on traditional tariff-focused agreements.
EU officials have accelerated negotiations and legislative efforts in recent days as Brussels attempts to finalize and lock in key portions of the agreement before the U.S. considers additional trade measures. European policymakers remain concerned that failure to satisfy U.S. demands on implementation could expose the bloc to renewed tariff threats or other retaliatory trade actions.
For agricultural trade, regulatory disputes remain among the most sensitive unresolved issues. U.S. officials and farm groups have long criticized EU restrictions involving biotechnology approvals, pesticide policies, sanitary and phytosanitary standards, and geographic indication protections, arguing the measures function as de facto trade barriers against American exports.
The administration’s latest comments suggest those issues will remain central benchmarks in determining whether Washington views the agreement as successfully implemented.
— Senate Democrats press USTR to toughen labor, forced labor rules in USMCA review
Lawmakers urge Jamieson Greer to crack down on offshoring, strengthen North American labor standards and address growing Chinese investment in regional supply chains during upcoming trade pact review
A group of 15 Senate Democrats is urging U.S. Trade Representative Jamieson Greer to use the upcoming review of the U.S.-Mexico-Canada Agreement (USMCA) to strengthen labor protections, tighten enforcement against forced labor and address what they describe as growing Chinese influence in North American supply chains.
In a May 20 letter (link) led by Sen. Tammy Baldwin (D-Wis.), the lawmakers argued that while USMCA improved upon the North American Free Trade Agreement, it has not gone far enough to stop offshoring or raise labor standards across the region. Signatories included Senate Minority Leader Sen. Chuck Schumer (D-N.Y.), Sen. Elizabeth Warren (D-Mass.), Sen. Cory Booker (D-N.J.), Sen. Adam Schiff (D-Calif.) and Sen. Ed Markey (D-Mass.), among others.
The senators called on USTR to fully enforce USMCA’s ban on imports made with forced labor, arguing that Canada and Mexico have “done little to enforce” the provision. They urged the administration to establish greater transparency and data-sharing among the three countries, including public reporting on enforcement actions and intelligence-sharing protocols.
The letter also pushed for stronger protections against offshoring, arguing that U.S. manufacturers continue relocating production to Mexico to take advantage of lower wages and weaker environmental standards. The senators proposed considering a North American manufacturing “wage floor” designed to discourage companies from shifting production south of the border while also raising wages for Mexican workers.
The lawmakers pointed to wages at Mexican automotive and electronics factories that they said range from roughly $3 to $5 per hour, arguing that the disparity continues to pressure U.S. wages and manufacturing employment.
Meanwhile, the senators criticized cuts to the Labor Department’s Bureau of International Labor Affairs (ILAB), saying the Trump administration had eliminated more than $500 million in international labor-rights programming that supports enforcement of trade agreements. They urged Congress and the administration to ensure ILAB has sufficient resources to enforce labor provisions within USMCA.
The group also highlighted concerns about China’s expanding presence in Mexican manufacturing and supply chains. The senators said Chinese investment in Mexico has more than doubled since USMCA took effect and warned the agreement could become a “backdoor” into the North American economy for Chinese goods and companies seeking to bypass U.S. trade restrictions.
To address those concerns, the senators urged tougher rules of origin for sectors such as autos, aerospace and heavy machinery. Greer has previously identified rules-of-origin negotiations as a major focus of the USMCA review and recently traveled to Mexico for preliminary discussions ahead of formal negotiations expected to begin next week.
The letter is the latest in a series of Democratic appeals ahead of the USMCA review process, which lawmakers and industry groups increasingly view as a key battleground over labor standards, supply chain security and competition with China.
| MEAT & MEAT INDUSTRY |
— FSIS finalizes changes to swine inspection procedures
USDA says eliminating certain manual inspection requirements will reduce costs while maintaining food safety standards
USDA’s Food Safety and Inspection Service (FSIS) has finalized a rule (link) eliminating mandatory incision of mandibular lymph nodes and palpation of viscera during post-mortem swine inspections at all federally inspected pork slaughter facilities, including plants operating under both traditional inspection systems and the New Swine Slaughter Inspection System (NSIS).
FSIS said the inspection steps are no longer necessary to ensure food safety because condemnation rates in swine are low and most disease conditions that would warrant condemnation can be identified visually through other pathological changes in carcasses or carcass parts.
The agency first proposed the change in August 2025, arguing that the older inspection methods added labor and processing costs without providing meaningful additional food safety benefits. Industry groups had generally supported the proposal, saying the changes better align inspection practices with modern slaughter operations and current disease risks.
According to FSIS, the final rule will take effect July 20 and is expected to generate annual savings of roughly $7.4 million to $14.7 million for the pork industry, while reducing agency costs by an estimated $2.0 million to $8.4 million annually.
The move continues USDA’s broader effort to modernize meat inspection procedures and shift toward risk-based inspection systems that rely more heavily on visual inspection and plant-level preventive controls.
| WEATHER |
— NWS outlook: Rounds of strong to severe thunderstorms continue from the central High Plains southward to Texas and across the Deep South… …A wet pattern setting up across the eastern U.S. heading into the Memorial Day weekend… …A round of high-elevation snow for the northern to central Rockies as rain and embedded thunderstorms spread across the lower elevations and into the northern Plains.
— Wet pattern deepens fieldwork concerns across Corn Belt
Persistent rains stall planting progress while Memorial Day heat builds in northern Plains
The southeastern Corn Belt is emerging as the primary trouble spot for spring fieldwork delays as excessively wet soils and repeated rainfall threats continue to limit planting and other farm operations. Forecast models show little opportunity for meaningful drying over the next 15 days, with virtually no extended multi-day windows for producers to return to fields across parts of the eastern Midwest.
Meanwhile, the Mid-South and Southeast are expected to receive exceptionally heavy precipitation totals — in some areas more than double or even triple normal rainfall levels during the next two weeks. While the pattern should significantly improve longer-term drought conditions and replenish soil moisture reserves, it is also expected to trigger increasing concerns about saturated fields, delayed planting progress, standing water and localized flooding.
The Hard Red Winter wheat belt is also facing its wettest 15-day stretch of the spring season. Persistent above-normal rainfall should provide important benefits for developing summer row crops and pasture conditions across the Plains. However, analysts caution that damage to the winter wheat crop from earlier drought and weather stress is already too extensive for substantial recovery despite the improved moisture outlook.
In the northern Plains, spring wheat areas would generally benefit from a wetter setup, though forecasts currently point to near-normal precipitation rather than a major moisture surge. The Great Lakes region, meanwhile, is expected to remain the driest area across the central United States, with below-normal rainfall projected over the next two weeks.
Temperature patterns are also shifting sharply. Much of the central U.S. will remain relatively cool through the remainder of the week before a significant warming trend develops heading into Memorial Day and beyond. Forecasts call for temperatures in the northern Plains to run 6 to 10 degrees above normal during the six-to-15-day outlook period. Meanwhile, persistent clouds and repeated rainfall are expected to prevent abnormal heat from developing across the southern Plains and Mid-South.
