SCMP: Trump/Xi Summit Focus on Economic Deliverables
China boosts U.S. sorghum, Australian barley imports as corn tightens
| LINKS |
Link: Video: Wiesemeyer’s Perspectives, Feb. 1
Link: Audio: Wiesemeyer’s Perspectives, Feb. 1
| Updates: Policy/News/Markets, Feb. 12, 2026 |
| UP FRONT |
TOP STORIES
— Trump, Xi expected to extend trade truce at Beijing summit
An SCMP exclusive reports Trump and Xi may meet in Beijing in early April to extend their trade truce up to a year, potentially rolling back tariffs. Early reporting referenced expanded Chinese soybean purchases, though the latest version omits that detail. The move would offer economic stabilization ahead of U.S. midterms while broader strategic tensions — including Taiwan — remain unresolved.
— House GOP rebukes Trump tariffs on Canada
The House voted 219–211 to overturn Trump’s Canadian tariffs, with six Republicans breaking ranks (Bacon-Neb., Fitzpatrick-Pa., Hurd-Colo., Kiley-Calif., Massie-Ky., Newhouse-Wash). The measure faces steep odds in the Senate and an almost certain veto, making it more symbolic than substantive — but it signals visible GOP trade fissures.
— Supreme Court still weighing IEEPA tariff case
The High Court has not scheduled a ruling on the administration’s use of IEEPA for tariffs. Justice Jackson cited “nuanced legal issues.” The outcome could redefine presidential tariff authority, though the administration has signaled alternative trade tools are ready if needed.
— House renewable fuel council advances E15, SRE cap plan
A draft proposal would allow permanent year-round E15 sales, cap small refinery exemptions at 450 million RINs, and block EPA from reallocating waived volumes. The plan intersects with EPA’s pending 2026–27 RFS rulemaking and could reshape blending certainty for biofuels.
— Modi/Trump trade framework sparks Indian farm backlash
Indian farmer groups are mobilizing nationwide protests over an interim U.S./India deal that lowers tariffs on several U.S. ag products, including sorghum and DDGs. Critics cite subsidy imbalances and MSP concerns. The White House fact sheet has already been revised to soften purchase language.
— Trump moves to repeal EPA endangerment finding
The administration is set to rescind the 2009 climate finding underpinning federal GHG regulations. The move would sharply limit EPA climate authority absent new legislation and is certain to face court challenges. Industry groups back the rollback; environmental groups vow litigation.
— America First Policy Institute buys D.C. landmark
AFPI purchased the Colorado Building near the White House for $20 million, cementing its long-term Washington presence. The Trump-aligned group continues expanding institutional influence within the capital’s policy corridor.
FINANCIAL MARKETS
— Global equities mixed; U.S. futures higher
Markets turned upbeat ahead of U.S. inflation data. European equities led gains; Asia was mixed. U.S. indices were little changed yesterday.
— McDonald’s tops expectations
Global same-store sales rose 5.7%, beating forecasts. Revenue climbed 10% to $7.01 billion. Value promotions are driving traffic, particularly among lower-income U.S. consumers. Operating margins expected mid-to-high 40% range.
— U.S. deficit narrows 17% early in FY 2026
Tariff revenue surged 304% to $124 billion, helping shrink the deficit to $697 billion through January. Corporate tax receipts declined. The Supreme Court’s tariff ruling could materially affect this revenue stream.
AG MARKETS
— China buying sorghum, soybeans; cotton sees cancellations
USDA reported strong sorghum and soybean sales to China, though cotton saw net reductions.
— USDA daily: 108,000 MT soybeans to Egypt
— Reuters exclusive: China boosts U.S. sorghum, Australian barley imports
Rain-damaged corn and rising domestic prices are pushing Chinese buyers toward substitutes. Sorghum and barley imports are accelerating sharply.
— Futures mixed yesterday
Corn and soybeans little changed; wheat and livestock stronger; hogs lower.
FARM POLICY
— USDA finalizes ELRP payments
An additional 8.2% payment raises the total factor to 43.2% for 2023–24 livestock disaster losses. No producer action required beyond eligibility filings by Nov. 2, 2026.
AG EXPORT PROGRAM FUNDING
— USDA boosts MAP and FMD funding for FY 2026
MAP rises to $181 million; FMD to $31 million. Soybeans and meat sectors among top beneficiaries as global trade volatility persists.
ENERGY MARKETS & POLICY
— Oil slips Thursday on weaker demand outlook
IEA cut 2026 demand forecast, projecting surplus conditions. U.S. crude inventories surged 8.5 million barrels. Iran tensions persist but are not escalating.
— Oil rose Wednesday on geopolitical tension
Iran uncertainty and strong U.S. jobs data offset a large inventory build. Markets balancing risk premium vs. ample supply.
— China buys Venezuelan crude previously sold to U.S.
China has acquired Venezuelan oil following U.S. intervention and restructuring of exports. Treasury issued licenses allowing U.S. firms to support Venezuelan production.
TRADE POLICY
— EU lawmakers strike implementation deal on U.S. pact
Parliament negotiators added a 2028 sunset clause, security safeguards, and a steel tariff review mechanism. Committee vote Feb. 24; plenary in March.
— Sorghum included in U.S./India framework
Industry groups welcome sorghum’s inclusion as a long-term market opportunity, though commercial volumes remain uncertain pending implementation details.
WEATHER
— NWS outlook:
An upper-level low brings precipitation to the South/Central Plains into the Southeast; post-frontal snow for the Great Lakes and interior West; above-normal temperatures across much of the central and southern U.S.
| TOP STORIES — Trump, Xi expected to extend trade truce at Beijing summitSouth China Morning Post exclusive says leaders may roll back tariffs for up to a year as China resumes soybean purchases An exclusive report from the South China Morning Post (SCMP) says President Donald Trump and President Xi Jinping are expected to meet in Beijing in early April and could extend their fragile trade truce for as long as a year. An initial version of the SCMP report said officials on both sides are working toward rolling back tariffs and anchoring the summit around short-term economic deliverables — including expanded Chinese purchases of U.S. soybeans — as both governments seek to stabilize ties after a volatile 2025. However, the latest version of the SCMP report does not mention additional soybean purchases. From Busan truce to Beijing reset. The current truce traces back to last October’s bilateral meeting in Busan, South Korea, where Trump and Xi agreed to ease triple-digit retaliatory tariffs and certain export controls after months of spiraling trade tensions. China had sharply curtailed purchases of U.S. agricultural goods during much of 2025 but has since resumed soybean buying. Extending that informal understanding would provide economic breathing room while avoiding a broader structural confrontation. Trump, facing November midterm elections, is pushing for tangible wins. Following a nearly two-hour phone call with Xi last week, he said Beijing was considering additional soybean purchases — a politically sensitive issue in key farm states. Deliverables in focus. Sources cited by SCMP said auto and energy agreements could eventually be announced, and that a recently concluded TikTok arrangement may serve as a model for other sector-specific deals. Treasury Secretary Scott Bessent confirmed that senior U.S. officials recently traveled to Beijing to strengthen communication channels ahead of the summit. He is expected to meet Vice Premier He Lifeng to discuss potential deliverables. Bessent has framed the administration’s approach as “fair competition and de-risking, not decoupling,” while emphasizing that China’s roughly $1 trillion trade surplus remains a concern. Strategic tensions linger. Even as trade stabilization appears possible, geopolitical friction persists. China’s ambassador to Washington, Xie Feng, recently described bilateral ties as achieving “overall dynamic stability” but reiterated that Taiwan remains a “red line.” Beijing has warned that continued U.S. arms sales to Taiwan could jeopardize progress, underscoring that strategic tensions remain layered beneath economic diplomacy. Agricultural and political stakes. For U.S. agriculture — particularly soybean producers — a one-year extension of the truce would provide welcome stability after a turbulent marketing year marked by Chinese boycotts and retaliatory tariffs. For Trump, the optics matter just as much. An extended tariff rollback and fresh Chinese buying commitments would offer near-term economic wins ahead of midterms, while allowing both sides to manage competition without triggering another trade escalation. If confirmed, the early April Beijing summit would mark less a dramatic breakthrough and more a calculated stabilization — a pause designed to secure economic gains while keeping broader rivalry in check. — Trump loses on tariffs as House GOP votes against presidentHouse rebuke of Canada tariffs highlights GOP divisions — Senate and White House hurdles loom In a rare bipartisan setback for President Donald Trump’s trade agenda, the U.S. House of Representatives voted 219–211 on Feb. 11 to overturn his tariffs on Canadian imports, with six Republican lawmakers joining nearly all House Democrats in support. The resolution targets the national emergency declaration that Trump used to justify steep duties on goods from one of the United States’ closest trading partners. The Republican defectors — a mix of moderates and conservatives willing to break with the White House — were:• Don Bacon, Nebraska (not seeking re-election) • Brian Fitzpatrick, Pennsylvania• Jeff Hurd, Colorado• Kevin Kiley, California• Thomas Massie, Kentucky• Dan Newhouse, Washington (not seeking re-election) One Democrat voted to preserve the tariffs: Rep. Jared Golden of Maine. Their votes underscored growing unease within the GOP about executive overreach on trade policy and the economic impact of tariffs on U.S. consumers and businesses. Senate prospects uncertain — veto almost certain. While the House vote is a notable symbolic defeat for the president, it faces multiple formidable hurdles before becoming law. The resolution must next pass the Senate, where Republican leadership has shown less willingness to openly confront Trump’s trade strategy. Even if it somehow secures a majority there, the measure would almost certainly be vetoed by the president — and Congress lacks the two-thirds majorities in both chambers required to override such a veto. That combination of Senate resistance and a sure veto means the House’s rebuke is more political than practical — a notable public split within the GOP rather than an imminent policy reversal. Still, it could presage further legislative efforts to curb presidential tariff authority and influence the broader debate on trade going into the midterm elections. — Supreme Court still deliberating on IEEPA tariff caseJackson cites “nuanced legal issues” as ruling looms over Trump tariff authority The wait continues for the U.S. Supreme Court to issue its opinion in the high-stakes case challenging the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imported goods. The ruling — widely viewed as pivotal for the administration’s broader trade strategy — has yet to be scheduled. The Court has not listed any opinion days for February, though justices are next set to be on the bench Feb. 20, with oral arguments beginning for the February sitting on Feb. 23. Speaking earlier this week on CBS Mornings, Justice Ketanji Brown Jackson underscored the complexity of the case and signaled that deliberations are ongoing. “There are lots of nuanced legal issues that the court has to thoroughly consider,” Jackson said. “The court is going through its process of deliberation. The American people expect for us to be thorough and clear in our determinations and sometimes that takes time.” The case carries significant implications for President Donald Trump’s tariff authority. A decision narrowing or overturning the use of IEEPA for tariffs could upend a key pillar of the administration’s trade policy. Conversely, a ruling upholding the authority would reinforce executive flexibility in deploying emergency economic powers. Even as the Court weighs its opinion, administration officials have indicated they are prepared to rely on alternative statutory tools to maintain tariff pressure if necessary — though those pathways would likely involve more procedural steps and time. With multiple potential outcomes on the table, the Court’s decision continues to loom large over U.S. trade policy, congressional maneuvering, and ongoing legal challenges tied to presidential tariff authority. — House renewable fuel council advances E15, SRE limitsDraft plan would cap refinery exemptions and block EPA reallocation of waived RFS volumes House Republican leadership’s renewable fuel council is moving closer to a legislative package aimed at expanding year-round sales of E15 and tightening limits on Small Refinery Exemptions (SREs) under the Renewable Fuel Standard (RFS). According to a draft obtained by Bloomberg, the proposal would: • Allow permanent, nationwide year-round sales of E15 fuel.• Cap SREs at 450 million Renewable Identification Numbers (RINs).• Prevent the Environmental Protection Agency from reallocating exempted volumes to other refiners. The 450 million RIN cap would represent a structural constraint on refinery exemptions — a longstanding flashpoint between biofuel producers and petroleum refiners. By limiting SREs and blocking EPA from redistributing waived volumes, the draft seeks to provide greater certainty for ethanol producers and corn growers who argue that exemptions have historically undermined statutory blending targets. However, the package is still fluid. Bloomberg reports that key provisions could change before the plan is finalized and publicly released. RFS rulemaking timeline looms. The proposal lands at a sensitive moment for the EPA’s broader Renewable Fuel Standard agenda. The agency has indicated it intends to finalize RFS volume levels for 2026 and 2027 by the end of March, alongside a long-awaited decision on whether waived SRE volumes should be reallocated. Notably, EPA has yet to submit the forthcoming RFS rule package to the Office of Management and Budget (OMB) for interagency review — a key procedural step before final publication. If Congress codifies language preventing the reallocation of waived volumes, it could significantly constrain EPA’s discretion in the pending RFS rulemaking. That dynamic creates a potential legislative/regulatory collision, particularly as stakeholders await clarity on both long-term blending targets and the treatment of refinery exemptions. For ethanol producers and agricultural groups, year-round E15 and firm limits on SREs would represent meaningful structural reforms. For refiners and some lawmakers wary of expanding Renewable Fuel Standard obligations, the draft could trigger renewed debate as the council’s framework moves closer to formal consideration. — Modi/Trump trade deal stirs backlash from Indian farmersAs New Delhi deepens U.S. alignment, agriculture becomes the political flashpoint An interim trade framework between Indian Prime Minister Narendra Modi and President Donald Trump is triggering sharp backlash from Indian farm groups, who argue New Delhi is exposing a fragile agricultural sector to uneven global competition in exchange for closer ties with Washington. Farmers mobilize nationwide protests. The Samyukt Kisan Morcha (SKM) — a coalition of roughly 40 unions — has called for village-level demonstrations and participation in a nationwide strike this week. In a statement, the group labeled the agreement a “total surrender” of Indian agriculture and demanded the resignation of Commerce Minister Piyush Goyal. Protest leaders have vowed symbolic actions, including burning effigies of President Trump, underscoring how politically sensitive market access remains in a country where agriculture still supports about 40% of the population. The backlash echoes the 2021 mass protests that forced the repeal of earlier farm reform laws — a reminder that trade and agriculture are tightly intertwined with domestic political stability in India. What’s in the interim framework. According to the joint U.S./India statement:• India would reduce or eliminate tariffs on U.S. industrial goods and a broad list of agricultural products, including dried distillers’ grains (DDGs), sorghum, tree nuts, fruits, soybean oil, wine and spirits. (See related item on sorghum in the Trade Policy section.)• India also pledged to address long-standing non-tariff barriers affecting U.S. farm exports.• The framework is positioned as a steppingstone toward a full bilateral trade agreement. On the U.S. side, Washington would reduce tariffs on roughly 55% of Indian exports to about 18%, down from the elevated 50% rate currently applied to some goods. Meanwhile, there have been changes made to the White House fact sheet on the U.S./India deal, including the removal of pulses from the list of agricultural products that India had committed to reduce or eliminate tariffs on. Further, the fact sheet now says that India “intends” to buy more American products and purchase over $500 billion of U.S. energy, information and communication technology, coal, and other products. The initial version of the fact sheet indicated that India had committed to make those purchases. Indian officials have indicated the interim agreement could be formally signed as soon as March. Core farmer concern: unequal competition. Farm leaders say the details remain vague — and potentially far-reaching. Abhimanyu Kohad, an SKM leader from Haryana, warned that if imported products fall below India’s minimum support price (MSP), domestic farmers could be left without viable buyers. Apple growers in Himachal Pradesh and cotton producers in Maharashtra and Gujarat have already raised alarms about cheaper imports eroding local market share. A major grievance centers on subsidy disparities. Indian farmers typically receive only a few hundred dollars annually in direct or indirect support. By contrast, critics argue U.S. producers benefit from far larger federal farm payments and crop insurance backstops. Food policy expert Devinder Sharma of Chandigarh said the structural imbalance is central to farmer anxiety. “Farmers lack clarity on how the agreement would affect them. The debate reflects a deeper issue that agriculture was being pushed toward market opening without adequately addressing the structural distress faced by Indian farmers,” Sharma said. Strategic calculus vs. rural politics. From New Delhi’s perspective, the deal advances a broader strategic alignment with Washington — economically and geopolitically. For the Trump administration, India represents one of the world’s fastest-growing agricultural import markets and a potential offset to volatility in other trade relationships. But domestically in India, agriculture is not just an economic sector — it is a political fault line. If concessions are perceived as disproportionately favoring U.S. exporters without meaningful safeguards for smallholders, the government could face sustained rural unrest — particularly in northern farm belt states that have previously demonstrated their capacity to mobilize at scale. The interim agreement may be designed as a steppingstone. For India’s farmers, it looks like a stress test. — Trump moves to repeal EPA climate endangerment findingWhite House calls it the “largest deregulatory action in American history,” while environmental groups vow court fight The Trump administration is preparing to rescind the Environmental Protection Agency’s 2009 “endangerment finding” — the scientific determination that greenhouse gases threaten public health and welfare. The move, confirmed by White House press secretary Karoline Leavitt, would strip the EPA of its primary legal authority to regulate greenhouse gas emissions under the Clean Air Act. The finding, issued during the Obama administration, concluded that six greenhouse gases — including carbon dioxide and methane — endanger current and future generations. It also identified motor vehicles as contributors to greenhouse gas pollution, forming the legal backbone for federal auto emissions standards and other climate regulations. The administration plans formal action today (Feb. 12). However, the final rule from EPA on the endangerment finding is still showing as being under review at the Office of Management and Budget (OMB) with four meetings still scheduled for today out of a total of 32 meetings either held or scheduled on the matter. What the repeal would do. Eliminating the finding would fundamentally alter federal climate policy. In an August 2025 proposal, the EPA wrote that without the endangerment finding, it would “lack statutory authority to regulate emissions based on global climate change concerns” under the Clean Air Act. EPA Administrator Lee Zeldin called the coming revocation historic, writing on social media that “this week, we make history.” Leavitt described the move as “the largest deregulatory action in American history,” claiming it will save Americans $1.3 trillion. The administration argues that looser fuel and emissions rules will reduce vehicle costs by more than $2,400 per car in the future. President Donald Trump has repeatedly criticized climate regulations and has withdrawn the U.S. from several international climate agreements. The repeal would mark his administration’s most sweeping rollback of climate policy to date. Industry support, environmental backlash. Environmental and public health groups immediately condemned the decision and pledged legal challenges. Earthjustice President Abbie Dillen said the repeal “cannot be reconciled with EPA’s requirements under the law or science” and vowed to challenge the action in court. Advocacy group Climate Power said the decision would bury decades of research and increase health risks tied to extreme heat, storms, and wildfires. The EPA received more than 570,000 public comments on the proposal after it was introduced in August 2025, with roughly 30,000 posted to the federal docket. Supporters include some agricultural and industry groups. The Texas Vegetable Association backed the repeal, arguing it would reduce costs for growers and improve supply chain reliability. Broader energy shift underway. The repeal coincides with other administration actions signaling a pivot toward fossil fuels. Trump is expected to direct the Defense Department to purchase electricity from coal-fired power plants. Meanwhile, the Senate Energy Committee has scheduled a closed briefing with Energy Secretary Chris Wright on oil developments in Venezuela. Wright faced criticism in 2025 for commissioning a rapid “critical review” of greenhouse gas science that challenged mainstream climate findings — conclusions disputed by many U.S. climate scientists. What happens next. The repeal is almost certain to face immediate court challenges. If upheld, it would sharply limit the EPA’s ability to regulate greenhouse gas emissions absent new congressional action. For industries ranging from energy to automotive manufacturing — and for agricultural producers watching fuel and input costs — the outcome could reshape federal environmental policy for years to come. — America First Policy Institute buys landmark D.C. building for $20 millionTrump-aligned think tank expands steps from the White House, deepening its Washington footprint The Trump-aligned America First Policy Institute (AFPI) has purchased the historic Colorado Building at 14th and G Streets NW for $20 million, dramatically expanding its presence just blocks from the White House, according to Politico. The sale was finalized in January. The property sits near the Treasury Building and close to the planned new East Wing of the White House — a location that underscores the group’s proximity not just geographically, but politically, to the current administration. AFPI played a central role in President Donald Trump’s transition planning and has become a hub for longtime Trump loyalists. It was co-founded by now-USDA Secretary Brooke Rollins, and Education Secretary Linda McMahon previously served as the organization’s chair before joining the transition effort. In a statement, interim President Greg Sindelar framed the purchase as a strategic investment in institutional permanence. “The America First Policy Institute was launched to carry forward President Trump’s America First agenda and serve as the permanent home for the America First movement. By strengthening our presence in Washington, we are better positioned to relentlessly advance President Trump’s proven policies and ensure these principles become a lasting, unbreakable legacy that shapes our nation for generations to come.” Founded in 2021, AFPI’s ascent has been swift. In just five years, the group has moved from a post-presidency policy shop to one of the most influential conservative organizations in Washington — both in policy impact and now in physical footprint. The $20 million purchase signals that AFPI is not positioning itself as a temporary transition vehicle, but rather as a long-term institutional anchor for Trump-era policy development — embedded directly within the capital’s power corridor. |
| FINANCIAL MARKETS |
— Equities today: Global markets were upbeat as corporate earnings continued to roll out and investors eyed tomorrow’s U.S. inflation report. Wall Street futures were in positive territory after markets closed muted yesterday on a stronger-than-expected jobs report. In Asia, Japan flat. Hong Kong -0.9%. China +0.1%. India -0.7%. In Europe, at midday, London +0.1%. Paris +0.7%. Frankfurt +1.2%.
— Equities yesterday:
| Equity Index | Closing Price Feb. 11 | Point Difference from Feb. 10 | % Difference from Feb. 10 |
| Dow | 50,121.40 | -66.74 | -0.13% |
| Nasdaq | 23,066.47 | -36.01 | -0.16% |
| S&P 500 | 6,941.47 | -0.34 | 0.00% |
— McDonald’s tops expectations on sales, earnings
Value promotions drive traffic gains in U.S. and abroad
McDonald’s delivered a stronger-than-expected quarter, underscoring the staying power of its value-focused strategy amid continued consumer price sensitivity.
For the quarter ended Dec. 31, global same-store sales rose 5.7% — well above analyst expectations of 3.7%. Adjusted earnings per share came in at $3.12, topping forecasts, while revenue increased 10% to $7.01 billion.
The Chicago-based fast-food chain said meal deals and targeted promotions helped draw budget-conscious U.S. consumers back into restaurants. Demand also remained firm in Australia and Britain, suggesting that value messaging is resonating beyond the domestic market.
Chief Executive Officer Chris Kempczinski pointed to growing evidence that the company’s value strategy is gaining traction, particularly among lower-income consumers, where visit counts showed improvement.
Looking ahead, McDonald’s expects its operating margin to land in the mid-to-high 40% range for the year, compared with 46.1% in 2025 — signaling confidence that promotional activity can coexist with disciplined cost management.
Upshot: The results suggest that even in a cautious spending environment, strategic pricing and promotions can preserve traffic and protect profitability.
— U.S. budget deficit narrows 17% in early FY 2026 as tariffs boost revenue
Customs duties surge 304%, but CBO warns tax cuts still widen long-term deficit outlook
The U.S. budget deficit shrank sharply in the first four months of Fiscal Year 2026, underscoring the near-term fiscal impact of President Donald Trump’s tariff policy — even as the longer-term deficit picture remains challenged.
According to Treasury data, the deficit totaled $697 billion from October through January, down from $840 billion during the same period a year earlier — a 17% decline. After adjusting for calendar differences, the shortfall is down 21% so far this fiscal year.
Tariff windfall drives revenue growth. Federal receipts rose 12% in the first four months of FY 2026, significantly outpacing the 2% increase in government outlays.
A major driver: customs duties.
Tariff collections totaled $124 billion, marking a dramatic 304% increase from the prior year.
Earlier Wednesday, the Congressional Budget Office estimated that tariff revenue could reduce federal deficits by $3 trillion over the next decade — assuming the duties in place as of Nov. 20 remain unchanged.
That projection highlights what’s at stake as the Supreme Court deliberates on whether President Donald Trump had authority to impose many of the tariffs under emergency economic powers. A ruling against the administration could jeopardize a key revenue stream that is currently helping narrow the deficit.
The administration has indicated it would pursue alternative trade authorities to re-impose some duties if the Court limits its emergency powers.
Corporate tax receipts slip. While tariffs are boosting revenues, corporate tax receipts are moving in the opposite direction.
Gross corporate tax collections fell to $125 billion in the first four months of FY 2026, down from $146 billion during the same period last year. The decline reflects reduced levies enacted in last year’s Republican tax legislation.
The CBO simultaneously raised its 10-year deficit projection by $1.4 trillion, incorporating those tax cuts and other policy assumptions — signaling that tariff revenue alone is not sufficient to offset broader deficit-expanding measures.
Fiscal crosscurrents ahead. In the near term, tariff collections are clearly providing measurable deficit relief. But the sustainability of that improvement depends on:
• The Supreme Court’s ruling on tariff authority
• Whether Congress codifies or restructures trade measures
• The long-term fiscal impact of tax policy and entitlement spending
For now, the early FY 2026 data show tariffs acting as a powerful revenue lever — one carrying both economic and legal uncertainty as Washington’s trade strategy faces judicial scrutiny.
| AG MARKETS |
— Sales of U.S. sorghum, soybeans to China continue with net reductions in cotton. USDA weekly Export Sales activity to China for 2025/26, for the week ended Feb. 5 included net sales of 139,132 MT of sorghum and 286,115 MT of soybeans. But the report also showed net reductions of 53,147 running bales of upland cotton. There were also net sales of 587 MT of pork for 2026 reported. On soybeans, the net sales reflected new sales of 158,100 MT, 201,000 MT moved from unknown destinations, and cancellations of 73,000 MT. Soybean export commitments to China are at 10.172 MMT and when the daily sale announced Feb. 9 is included that puts export commitments at 10.436 MMT. For upland cotton, there were new sales of 8,600 MT but cancelations of 61,700 MT.
— USDA daily sales: 108,000 MT soybeans to Egypt for 2025/26.
— China boosts U.S. sorghum, Australian barley imports as corn tightens
Reuters exclusive — Rain-damaged crop and rising prices push feedmakers toward substitutes
Chinese buyers have sharply increased purchases of U.S. sorghum and Australian barley after heavy rains damaged parts of the domestic corn crop and drove local prices higher, according to a Reuters exclusive by Naveen Thukral and Ella Cao.
Traders told Reuters that China has booked about 2.5 million metric tons of U.S. sorghum over the past three months — roughly three times total 2025 shipments. Since December, buyers have also taken about 1 million tons of Australian barley per month, double last year’s pace.
China’s average corn price has climbed to around 2,250 yuan ($326) per ton, up about 10% year over year. Mold issues and tighter usable supply have pushed feedmakers to seek alternatives.
Unlike corn, which is limited by a 7.2-million-ton tariff-rate quota, sorghum and barley are not subject to import caps — making them easier substitutes when domestic supplies tighten.
The surge has lifted export prices in both Australia and the U.S., while providing some relief to Chinese feed producers squeezed by higher corn costs.
— Agriculture markets yesterday:
| Commodity | Contract Month | Closing Price Feb. 11 | Change from Feb. 10 |
| Corn | March | $4.27 1/2 | -1 1/4 cents |
| Soybeans | March | $11.24 | +1 1/2 cents |
| Soybean Meal | March | $303.00 | +$2.20 |
| Soybean Oil | March | 57.05 | -22 points |
| Wheat (SRW) | March | $5.37 1/4 | +9 cents |
| Wheat (HRW) | March | $5.38 1/2 | +8 cents |
| Spring Wheat | March | $5.70 1/4 | +2 cents |
| Cotton | March | 61.99 cents | +40 points |
| Live Cattle | April | $240.975 | +$3.55 |
| Feeder Cattle | March | $367.45 | +$2.675 |
| Lean Hogs | April | $93.85 | -$1.65 |
| FARM POLICY |
— USDA finalizes ELRP payments for 2023 and 2024
Additional 8.2% payment to boost drought, wildfire, and flood relief for livestock producers
USDA’s Farm Service Agency (FSA) said it will issue a final round of payments under the Emergency Livestock Relief Program (ELRP) for both 2023 and 2024 losses, after determining sufficient funding remains available.
FSA said strong participation in the program — tied to drought, wildfire, and flooding losses — allows for an additional 8.2% payment factor. Producers had previously received payments calculated at a 35% factor, and with this supplemental payment, the total payment factor rises to 43.2%.
In practical terms, USDA said the final action will bring compensation for 2023 losses to approximately 39% of foregone profits, while 2024 losses will remain benchmarked at 35%.
Importantly, producers do not need to take any additional action to receive the final payment. However, they must ensure all required payment eligibility forms are filed with FSA by Nov. 2, 2026.
The announcement provides a modest but meaningful boost to livestock producers still navigating multi-year weather volatility — particularly across drought-affected regions where margins have already been strained by feed costs and market swings.
| AG EXPORT PROGRAM FUNDING |
— USDA boosts ag export program funding for FY 2026
Soybeans and meat sectors among biggest beneficiaries in expanded market access support
USDA announced its fiscal year (FY) 2026 funding allocations for two cornerstone agricultural export promotion programs — delivering meaningful increases that heavily favor soybeans and meat exports as global competition intensifies.
The department will distribute $181 million through the Market Access Program (MAP) — nearly $10 million more than last year — aimed at helping U.S. agricultural groups develop overseas markets through promotional campaigns, trade servicing and brand-building initiatives.
In addition, USDA will allocate $31 million under the Foreign Market Development (FMD) program, marking a $4 million increase from the prior year. Unlike MAP, which often supports branded promotions, FMD focuses more broadly on long-term market development, technical assistance and trade capacity-building efforts.
Soybean and meat organizations secured some of the largest funding increases this cycle — a signal USDA continues prioritizing high-volume, trade-sensitive commodities that face mounting tariff, sanitary and phytosanitary, and geopolitical headwinds.
For soybeans, expanded funding supports ongoing efforts to maintain and grow market share in Asia, Latin America and emerging markets amid intense competition from Brazil and Argentina.
For U.S. meat exporters — particularly beef and pork — the added resources help address regulatory barriers and consumer demand shifts in key destinations such as Southeast Asia, Japan and the Middle East.
The increases come at a sensitive time for U.S. exporters. Global trade flows remain volatile amid tariff disputes, currency swings and shifting political alliances. Additional export promotion dollars provide commodity groups more flexibility to respond to sudden market disruptions or capitalize on openings created through trade negotiations.
Export promotion programs like MAP and FMD are frequently cited by commodity organizations as high-return investments. USDA has long argued that every dollar spent through these programs generates multiple dollars in export sales — a particularly relevant metric as farm income pressures persist across several major crops.
With FY 2026 funding now finalized, commodity groups are expected to begin deploying resources quickly — targeting both established partners and growth markets where U.S. suppliers are seeking to strengthen long-term commercial ties.
| ENERGY MARKETS & POLICY |
— Thursday: Oil slips as IEA cuts 2026 demand outlook, Iran tensions linger
Inventory surge and surplus forecast offset geopolitical risk premium
Oil prices edged lower Thursday after the International Energy Agency trimmed its global demand outlook for 2026, reinforcing expectations of a sizeable supply surplus — even as tensions between the U.S. and Iran remain unresolved.
Brent crude fell 19 cents, or 0.27%, to $69.21 a barrel, while U.S. West Texas Intermediate (WTI) slipped 8 cents, 0.12%, to $64.55.
IEA sees slower growth, larger surplus. In its monthly report, the IEA said global oil demand will rise more slowly than previously expected this year and projected a substantial surplus despite supply outages in January. The report reversed earlier price gains, which had been driven by geopolitical concerns.
Markets are increasingly focused on fundamentals — and the IEA’s updated forecast reinforces a narrative of comfortable supply heading into 2026.
On the geopolitical front, Donald Trump said following talks with Israeli Prime Minister Benjamin Netanyahu that no definitive agreement had been reached on Iran, though negotiations with Tehran would continue. Earlier in the week, Trump signaled he was considering deploying a second U.S. aircraft carrier to the Middle East if talks stall. The timing and venue of the next round of discussions have not been announced. While rhetoric has periodically supported prices, markets appear unconvinced that immediate escalation is likely.
Additional downside pressure came from fresh U.S. data. According to the Energy Information Administration, crude inventories surged by 8.5 million barrels last week to 428.8 million barrels — sharply above the 793,000-barrel increase analysts had expected in a Reuters survey.
Refinery utilization also dipped 1.1 percentage points to 89.4%, signaling softer near-term crude demand from domestic refiners.
On the supply side, Russia’s seaborne oil products exports rose 0.7% month-over-month in January to 9.12 million metric tons, supported by strong fuel production and seasonally weaker domestic demand.
Bottom Line: For now, oil is caught between two competing forces:
• Bearish fundamentals — slower demand growth, rising inventories, and export resilience.
• Geopolitical risk premium — centered on U.S.-Iran negotiations and potential military signaling.
Unless tensions materially escalate, the market appears increasingly anchored to supply-demand dynamics — and the IEA’s surplus call is difficult for traders to ignore.
— Wednesday: Oil rises on Iran tensions despite large U.S. inventory build
Strong jobs data and Middle East uncertainty offset surprise crude stock surge
Oil prices pushed higher Wednesday as renewed geopolitical friction between the U.S. and Iran — combined with solid U.S. labor data — outweighed a sharp jump in domestic crude inventories.
Brent crude settled up 60 cents, 0.87%, at $69.40 per barrel, while West Texas Intermediate (WTI) rose 67 cents, 1.05%, to close at $64.63.
Geopolitics back in focus. Markets drew support from uncertainty surrounding renewed negotiations between Washington and Tehran. U.S. and Iranian officials held indirect talks in Oman last week, even as the U.S. increased its naval presence in the region.
President Donald Trump said Wednesday that no definitive outcome had been reached following discussions with Israeli Prime Minister Benjamin Netanyahu, but negotiations with Iran would continue. Earlier in the week, Trump indicated he was considering deploying a second aircraft carrier to the Middle East if diplomacy falters.
While rhetoric has periodically escalated, analysts noted there are no immediate signs of a supply disruption.
Jobs data signals steady fuel demand. Additional upward momentum came from stronger-than-expected U.S. labor data. January job growth accelerated and the unemployment rate declined to 4.3%, reinforcing expectations of resilient fuel demand and broader economic stability. For energy markets — particularly refined products and transportation fuels — steady employment growth tends to signal sustained consumption patterns.
Inventory surge caps gains. Capping the rally, U.S. crude inventories rose by 8.5 million barrels last week to 428.8 million barrels, according to the Energy Information Administration. The increase far exceeded analyst expectations of a roughly 793,000-barrel build and reflected a rebound in domestic production near record levels.
The large stock build suggests that supply conditions remain comfortable, limiting the upside momentum for crude prices.
Global supply outlook. In its latest monthly report, OPEC left its broader supply and demand outlook largely unchanged but projected that demand for the group’s crude would decline by 400,000 barrels per day in the second quarter compared with the first.
Meanwhile:
• Russian oil output slipped about 0.6% in January from December.
• Egypt announced plans to double oil production by 2030 by revising contracts to attract new investment.
Bottom Line: Oil markets are balancing two competing forces: geopolitical risk that could tighten supply and strong U.S. economic signals on one side — and ample inventories plus stable global output projections on the other. For now, geopolitical risk is carrying slightly more weight — but fundamentals are preventing a sharper move higher.
— China buys Venezuelan oil previously purchased by U.S.
China’s purchase signals continued global demand amid shifting Venezuelan oil dynamics
China has purchased some Venezuelan crude that was earlier sold to the United States government, U.S. Energy Secretary Chris Wright said during a media roundtable in Caracas, though he did not provide specific volumes or contract details. Wright characterized these transactions as “legitimate Chinese business deals under legitimate business conditions.”
His comments come amid Washington’s efforts to oversee and restructure Venezuela’s oil industry following the January seizure of President Nicolás Maduro by U.S. forces and the U.S. assumption of control over the OPEC member’s crude exports. The Trump administration has emphasized that Venezuelan oil sales will be conducted through authorized channels consistent with U.S. law.
China was previously the largest buyer of Venezuelan crude before the U.S. intervention, with Chinese refiners — especially private processors — importing discounted shipments. Russia has criticized U.S. restrictions on its own role in Venezuela’s oil business as discriminatory, reflecting broader geopolitical tensions in the region’s energy markets.
Besides China, Indian refiners have also purchased Venezuela’s flagship Merey crude since the U.S. action, and the grade has appeared in other markets, including Israel, as traders adapt to changes in Venezuelan production and export routes.
Meanwhile, the Treasury this week issued a new general license that permits American companies to supply Venezuela with equipment and technology needed to pump crude. The license lets U.S. oil-field services companies like Halliburton and SLB work in the country. The U.S. is still expected in the near future to offer broader licenses allowing more American oil companies to invest and drill in Venezuela.
| TRADE POLICY |
— EU lawmakers strike deal on U.S. trade pact implementation
Sunset clause, tariff safeguards and steel dispute mechanism added ahead of key February vote
Key European lawmakers have reached a compromise agreement to implement the EU/U.S. trade deal announced last year by President Donald Trump and European Commission President Ursula von der Leyen in Turnberry, Scotland — but not without adding significant new guardrails.
European Parliament International Trade Committee Chair Bernd Lange said negotiators secured a “large majority” for a common parliamentary position, calling it a “strong and balanced package.”
The trade committee is scheduled to vote Feb. 24, with a full Parliament vote possible during the March 9–12 plenary session. Final legislation would still require negotiations with the European Commission and member states before adoption.
A built-in expiration date. The agreement includes a sunset clause setting an expiration date of March 31, 2028 — the final year of President Trump’s current term. The timeline represents a compromise between Lange’s Socialists and Democrats group, which sought a shorter horizon, and the center-right European People’s Party (EPP), which favored a longer timeframe.
Lange had previously pushed for termination after 18 months if no broader agreement was reached. The adopted two-year-plus window is seen as a middle ground.
Security safeguard tied to Greenland tensions. EU lawmakers had paused work on implementation last month amid concerns over President Trump’s remarks about annexing Greenland and tariff threats against European countries that participated in military exercises in the Danish territory.
The new parliamentary position includes a safeguard allowing the EU to suspend tariff cuts if the U.S. threatens EU security or “territorial integrity.” Lawmakers framed the provision as insurance against geopolitical escalation spilling into trade relations.
Another key addition is a “standstill” clause designed to prevent the U.S. from raising tariffs above 15% — the ceiling agreed under the deal for most EU goods. In exchange for the EU eliminating tariffs on U.S. industrial goods and providing preferential access for certain seafood and agricultural products — along with reinstating tariff elimination for U.S. lobster — Washington agreed to cap tariffs on most EU exports at 15%.
Standstill clauses, according to the European Commission, require parties to keep markets at least as open as they were at the time of the agreement.
Steel and aluminum dispute mechanism. A major flashpoint remains U.S. national security duties of 50% on certain steel and aluminum derivative products. Since the deal was announced, Washington expanded the list of affected goods to more than 400 products — including windmills, motorcycles and agricultural machinery.
Under the new parliamentary agreement, there would be a six-month review period after the deal enters into force. If the U.S. does not reduce tariffs on steel-related derivatives from 50% to 15% within that window, EU tariffs on steel and steel-relevant products would automatically be reinstated. Lange indicated that failure to secure relief within six months would trigger the automatic restoration of EU duties.
Political backing across major blocs. According to reporting from Brussels, lawmakers from the European People’s Party, Socialists and Democrats, Renew Europe and the Greens support the compromise framework — giving it a strong chance of advancing.
German MEP Manfred Weber, who leads the EPP, emphasized the need for certainty in transatlantic trade, particularly amid concerns about expanding steel tariffs and broader questions about U.S. trade reliability.
He argued that swift approval of the Scotland agreement is critical to provide stability for European businesses.
What comes next. If approved by committee and then the full Parliament, negotiations would begin with the European Commission and member states to reconcile differences. All three institutions must sign off before the implementation legislation can take effect.
The compromise reflects a balancing act — preserving market access gains while building in political and security safeguards amid an unpredictable transatlantic trade environment.
— Sorghum included in U.S./India trade framework
Grower groups cite years of groundwork as door opens to long-term export growth
U.S. sorghum producers note cautious optimism after sorghum was specifically named in last week’s announced trade framework between the United States and India — a move industry leaders describe as a meaningful milestone following years of relationship-building and market development efforts. While the agreement remains in its early stages and commercial sales are not yet guaranteed, sorghum advocates say inclusion in the framework signals tangible progress in positioning the commodity within one of the world’s fastest-growing food and feed markets.
The National Sorghum Producers (NSP), working alongside the U.S. Grains & BioProducts Council and the United Sorghum Checkoff Program, have spent years cultivating commercial and policy relationships in India aimed at expanding demand for U.S. sorghum.
Quote of note: “Including U.S. sorghum in this framework agreement with India is a meaningful step forward for growers,” said Amy France, NSP chair and a farmer from Scott City, Kan. “This outcome reflects years of focused engagement by sorghum farmers, along with on-the-ground market development by the U.S. Grains & BioProducts Council and sustained investment by the United Sorghum Checkoff Program. While details are still emerging, this agreement opens the door to long-term growth in one of the world’s fastest-growing markets, and NSP will stay closely engaged to ensure it delivers real, durable export opportunities for sorghum growers.”
Industry leaders note that India’s expanding population, rising feed demand, and evolving food-use trends present potential opportunity for sorghum, particularly as trade discussions continue to address tariff structures, phytosanitary requirements, and other technical trade barriers.
The framework announcement does not immediately translate into sales, and stakeholders emphasize that significant work remains before commercial volumes materialize. However, sorghum’s formal inclusion provides negotiating leverage and signals recognition of the crop’s potential role in bilateral agricultural trade.
NSP officials indicated they will continue engaging closely with policymakers to ensure that implementation details support durable market access and competitive positioning for U.S. producers.
For sorghum growers, the development represents both validation of long-term market development investments and a potential new avenue for export growth — provided follow-through delivers on the framework’s promise.
| WEATHER |
— NWS outlook: Upper-level low pressure system brings precipitation chances across portions of the South/Central Plains into the Southeast… …Post-frontal snow expected for Great Lakes and higher elevation snow for interior West… …Above normal temperatures across much of central and southern U.S. over the next few days.
