U.S. Hiring Beats Expectations, Reinforcing Economic Resilience; 172,000 Jobs Added 

USDA’s 45Z feedstock rule nears final review | Screwworm updates and analysis; border to remain closed indefinitely | USTR officially seeks public input on new U.S./China trade council | Trump signals momentum on U.S./India trade deal as tariff pressures build

Link: USDA Mobilizes Aggressive Response After First Confirmed
         New World Screwworm Case in Texas

Link: Part 2: Rollins Faces New Questions on USDA Reorganization,
         Research, Disaster Aid and Farm Service Staffing
Link: Part 1: Rollins Defends Trump Agriculture Agenda Amid Heated
         House Hearing on Farm Economy, SNAP, Trade, and Glyphosate

Link: Video: Wiesemeyer’s Perspectives, May 31
Link: Audio: Wiesemeyer’s Perspectives, May 31

TOP STORIES
 

— USDA’s 45Z feedstock rule nears final review: OMB is scrutinizing USDA’s proposed guidelines for regenerative agriculture biofuel feedstocks, a critical step that will shape farmer eligibility for the Section 45Z Clean Fuel Production Credit.

— USTR officially seeks public input on new U.S./China trade council: USTR has opened a public comment period through July 10 on the structure and mission of a proposed U.S./China Board of Trade, signaling momentum toward a formal bilateral trade engagement mechanism.

— Screwworm detection means border to remain closed indefinitely, supports cattle prices: The first confirmed New World Screwworm case in the U.S. since 1966, found in a South Texas calf, has prompted a quarantine zone and effectively ended any near-term prospect of reopening the border to Mexican cattle imports, supporting prices in an already tight market.

— Extended border closure may accelerate Mexico’s cattle feeding ambitions: Repeated border disruptions are strengthening the business case for Mexico to develop its own feedlot and processing capacity, potentially reshaping long-term North American cattle flows.

— Trump signals momentum on U.S./India trade deal as tariff pressures build: President Trump expressed confidence a bilateral trade agreement with India is within reach, with negotiations continuing despite unresolved differences over market access, tariffs, and agricultural trade barriers.

— NGFA pushes CFTC to update trader reporting system: The National Grain and Feed Association is urging the CFTC to publish Commitments of Traders reports twice weekly and reduce the data release delay, arguing more timely reporting would improve market transparency and risk management.

FINANCIAL MARKETS

— Equities today: Global markets traded mixed as Middle East tensions and stalled U.S./Iran negotiations weighed on sentiment, with U.S. futures diverging — the Dow pointing slightly higher while the Nasdaq signaled notable losses.

— Equities yesterday: The Dow surged nearly 900 points to a new record high, driven by broad-based rotation from mega-cap tech into industrials, financials, and consumer staples.

— U.S. labor market remains resilient as May hiring tops expectations: Employers added 172,000 jobs in May, far exceeding forecasts, with the unemployment rate holding at 4.3% and wages up 3.4% year-over-year — strong numbers that may delay Federal Reserve rate cuts.

AG MARKETS

— USDA daily export sales: 190,000 MT of soybean cake and meal to the Philippines for 2025/26.

— Grain markets mixed overnight as weather pressures corn, while soy complex finds support: Favorable Corn Belt weather and improving Black Sea conditions pushed corn futures lower, while soybeans and wheat posted modest gains ahead of next week’s WASDE report.

— International grain markets ease as Europe and Black Sea weather improves: Better crop conditions across France, Germany, Poland, Ukraine, and Russia are weighing on global wheat values, with Paris milling wheat futures slipping toward €201 per metric ton.

— AMIS sees smaller global grain crops, record soybean output amid rising freight and fertilizer costs: The Agricultural Market Information System projects lower wheat, corn, and rice production in 2026/27 alongside record soybean output, with sharply higher shipping costs and an 82–96% probability of El Niño development adding to market uncertainty.

— Cotton AWP moves lower: The Adjusted World Price for cotton fell to 63.20 cents per pound effective June 4, down from 68.49 cents the prior week.

— Agriculture markets yesterday: Corn, soybeans, and wheat all declined, while live and feeder cattle posted strong gains.

USDA REORGANIZATION

— Vaden defends USDA reorganization, criticizes Democrats for opposition: Deputy Secretary Stephen Vaden argues the restructuring will decentralize operations, reduce administrative redundancy, and direct more resources to state-level program delivery, pushing back on Democratic concerns raised in Congress.

ENERGY MARKETS & POLICY

— Friday: Oil market watches diplomacy as Hormuz uncertainty keeps crude elevated: WTI held near $93 per barrel despite a sharp Thursday decline, with markets balancing cautious optimism over U.S./Iran negotiations against continued regional instability and infrastructure disruptions.

— Thursday: Oil prices slide as ceasefire hopes ease supply fears: Brent and WTI each fell more than 2.5% after an Israel-Lebanon ceasefire raised hopes for broader de-escalation, though a larger-than-expected draw in U.S. crude inventories and persistent Hormuz risks limited the decline.

TRADE POLICY

— Tariff costs fall largely on Americans, new study finds: A Kiel Institute analysis concludes that roughly 96% of U.S. tariff costs are absorbed domestically rather than by foreign exporters, challenging the Trump administration’s core rationale for its aggressive trade strategy.

— USTR advances forced-labor tariff strategy as Section 122 deadline nears: USTR has proposed tariffs of 10–12.5% on imports from 60 countries as part of a Section 301 forced-labor investigation, with public comments due July 6 and a hearing beginning July 7 — moving to replace expiring emergency tariff authority ahead of a July 24 deadline.

CHINA

— China shifts livestock policy toward efficiency over expansion: Beijing’s 15th Five-Year Plan for Agricultural Modernization sets a production floor of 95 million metric tons of meat annually rather than new growth targets, prioritizing feed efficiency, cost reduction, and market stability — a shift that could moderate long-term Chinese demand for soybeans and feed grains.

FOOD POLICY & FOOD INDUSTRY

— Global food prices pause after three-month climb: The FAO Food Price Index slipped slightly in May to 130.8, as a 4.6% drop in vegetable oil prices offset gains in cereals and sugar, though the index remains nearly 3% above year-ago levels with geopolitical and weather risks still elevated.

— SNAP cost-share rule advances, setting up major farm bill fight: OMB has completed review of USDA’s proposed rule shifting SNAP administrative costs from 50% to 25% federal share starting Oct. 1, 2026, a change that has become a central obstacle in Senate farm bill negotiations.

CONGRESS

— Senate advances border security funding as GOP eyes reconciliation showdown: Senate Republicans passed 52-47 legislation locking in multi-year funding for ICE and CBP through the end of Trump’s term, setting up a critical House vote next week on the broader reconciliation package.

— House advances USDA/FDA spending bill as funding fight shifts to Senate: The House passed a $26.3 billion FY2027 appropriations bill for USDA and FDA on a 213-210 vote, preserving core agriculture and food safety programs while setting up expected battles with the Senate over spending levels and policy riders.

POLITICS & ELECTIONS

— Grocery prices emerge as key political issue ahead of midterm elections: A University of Illinois/Purdue farmdoc daily analysis of the May 2026 Gardner Survey finds food affordability ranking among the top voter concerns across party lines, with more than 40% of respondents in every political category saying a candidate’s position on the issue would strongly influence their vote.

— Latino voters emerging as decisive force in Texas politics: Republican gains among Hispanic voters — particularly in South Texas and the Rio Grande Valley — more than offset Democratic advances in college-educated suburbs, fundamentally reshaping the state’s electoral coalition in 2024 and beyond.

WEATHER

— NWS outlook: Slight risks of excessive rainfall are forecast across the Middle Mississippi Valley, Central and Southern Plains through the weekend, along with severe thunderstorm risks in the Central Plains, Northern High Plains, Ohio Valley, and Northeast.

— Midwest rains ease crop stress while heat wave looms: Beneficial rainfall is improving soil moisture across much of the Corn Belt, dry conditions are supporting winter wheat harvest in the southern Plains, and a significant heat surge is forecast for June 9–13 — though a pattern change bringing below-normal temperatures is expected by mid-June.
 

TOP STORIES—USDA’s 45Z feedstock rule nears final reviewOMB scrutiny of regenerative agriculture guidelines could shape how farmers qualify crops for the Clean Fuel Production Credit USDA’s final rule establishing technical guidelines for producing regenerative agricultural biofuel feedstocks remains under review at the Office of Management and Budget (OMB), marking a critical step in the implementation of the Section 45Z Clean Fuel Production Credit. USDA submitted the rule to OMB on April 2, and the review process has generated significant interest, with 15 stakeholder meetings involving biofuel organizations, conservation groups, renewable fuel producers, and fuel retailers. The rule is expected to serve as the foundation for the USDA Feedstock Carbon Intensity Calculator (FD-CIC), a key tool that will be incorporated into the 45CFGREET model used to determine lifecycle greenhouse gas emissions associated with transportation fuels. The carbon intensity scores generated through this process will play a major role in determining eligibility and value under the 45Z tax credit. Treasury and the Internal Revenue Service have previously indicated that the USDA calculator will evaluate feedstocks produced using conservation and regenerative practices such as no-till, reduced tillage, cover crops, and nutrient management. The agencies also noted that the final FD-CIC framework will include requirements related to practice implementation, documentation, recordkeeping, and verification.Those compliance standards are expected to align closely with the technical guidelines contained in the USDA rule now under OMB review. As a result, the regulation is viewed as one of the most consequential remaining policy pieces for 45Z implementation because it will effectively determine how farmers demonstrate eligibility for lower-carbon feedstocks and how biofuel producers document emissions reductions tied to crop production practices. For agriculture, the rule carries significant implications beyond tax policy. It could influence planting decisions, conservation practice adoption, carbon-intensity scoring, and the competitiveness of feedstocks used in ethanol, sustainable aviation fuel (SAF), renewable diesel, and other low-carbon fuel pathways. Industry stakeholders are closely watching the review process because the final standards will help define which crop production systems can capture the greatest value from the 45Z incentive structure.—USTR officially seeks public input on new U.S./China trade councilComment process signals momentum toward formal trade dialogue structure between Washington and Beijing The Office of the U.S. Trade Representative (USTR) has formally published a Federal Register notice seeking public comments on the creation of a new U.S./China Board of Trade, marking another step toward institutionalizing economic and trade discussions between the world’s two largest economies. Link to notice  The request for comments signals that the Trump administration is moving beyond the recent U.S./China summit and beginning the process of shaping the structure and mission of a permanent trade engagement mechanism. USTR is asking stakeholders to provide input on a broad range of issues related to the board’s formation, operations, priorities, and governance. China has described the proposed body as a platform for practical discussions on trade and investment issues. According to China’s Ministry of Commerce, the board would facilitate policy exchanges, expand economic cooperation, manage disputes, and support the broader transformation of U.S.-China economic and commercial relations. Chinese officials indicated that trade representatives from both countries will maintain close communications in the coming months and develop detailed plans covering the organization’s structure, functions, and operating procedures. The public comment period runs through July 10, with rebuttal comments due by July 27. While neither government has announced a formal launch date, the timing suggests substantive work on the initiative will likely occur during late summer and early fall. The development is noteworthy because it points to an effort by both governments to create a more predictable framework for managing trade relations after years of tariff disputes, supply chain disruptions, export controls, and investment restrictions. Rather than relying solely on ad hoc negotiations or leader-level meetings, the board could provide a standing venue for addressing market access concerns, regulatory issues, agricultural trade barriers, technology restrictions, and investment disputes. For U.S. agriculture and agribusiness interests, the comment process offers an opportunity to shape future discussions on key issues such as market access, biotechnology approvals, sanitary and phytosanitary measures, tariff treatment, and China’s commitments to purchase U.S. agricultural products. The Federal Register notice also suggests the administration views the board as more than a symbolic gesture. By soliciting detailed public input before negotiations on the entity’s design are completed, USTR appears to be laying the groundwork for a formalized institution that could become a central feature of U.S./China economic engagement. The broader significance is that both Washington and Beijing appear interested in creating a mechanism to manage differences while preserving commercial ties. Whether the board evolves into a powerful negotiating forum or simply a consultative body will depend on the structure ultimately agreed upon by both governments, but the current comment process indicates the concept is moving from diplomacy into implementation.—Screwworm detection means border to remain closed indefinitely, supports cattle pricesFirst U.S. case since 1966 raises new questions about Mexican cattle imports and tightens an already constrained beef supply The confirmation of a New World Screwworm (NWS) case in a South Texas calf almost certainly pushes back any near-term reopening of the U.S./Mexico border to Mexican cattle imports, even if USDA officials remain confident the outbreak can be contained. The political, regulatory, and market realities have changed dramatically now that the pest has crossed into the United States. During a press briefing on Thursday, USDA Secretary Brooke Rollins said U.S. ports of entry will remain closed to livestock from Mexico until further notice.  Prior to the Texas detection, USDA’s strategy had focused on preventing the northward movement of screwworm from Mexico while maintaining the possibility of eventually reopening ports once surveillance, sterile fly releases, and containment efforts demonstrated sustained success. USDA had repeatedly emphasized that all southern ports remained closed and that reopening decisions would depend on the direction and severity of the outbreak in Mexico. Now the situation is different. The discovery of NWS in a three-week-old calf near La Pryor, Texas prompted USDA to establish a 20-kilometer (12-mile) quarantine zone, deploy incident command teams, increase surveillance, and expand sterile fly releases. Secretary Brooke Rollins has stressed that USDA believes the case is isolated and can be eradicated. Of note: It’s currently unknown how the screwworm infestation reached South Texas. Though screwworm was eradicated in the 1960s, the U.S. experienced a resurgence of the pest from 1972 to 1976. A screwworm outbreak in the U.S. infested tens of thousands of cattle across six states, cost tens of millions of dollars to contain, and was only defeated after a massive eradication effort. U.S. producers have not treated livestock for screwworm in more than 40 years. Cattle are particularly susceptible to screwworm due to their inability to protect an open wound, and their large frame can allow eggs to develop in multiple locations from a single cut. Earlier this year, the U.S. Food and Drug Administration issued multiple emergency orders authorizing topical sprays, powders, injectable drugs, and ointments to treat New World screwworm in cattle, dogs, cats, goats, horses, pet birds, and wild and exotic animals. There are 12 FDA-approved products available for the treatment of various species. Agency officials warn they have not approved a medicated feed option, though they said they are working on making one available as soon as possible.  However, from a policy standpoint, it becomes difficult to envision USDA approving any reopening schedule while federal and state officials are simultaneously managing an active U.S. infestation. Even if the Texas case remains isolated, regulators will likely want weeks or months of additional surveillance data before considering renewed cattle movements from Mexico. Any reopening announcement now would face intense scrutiny from cattle organizations, border-state lawmakers, and producers concerned about reintroducing risk. The key issue is not whether this single case can be eliminated. Most experts believe it can. The question is whether USDA will be willing to assume additional political and biological risk while proving to producers and Congress that domestic containment has succeeded. The key question is no longer whether USDA can eradicate the Texas case. Most experts believe it can. The bigger issue is whether USDA will reopen the border to Mexican cattle before it has clear evidence that the U.S. outbreak is fully contained. Given the political and economic consequences of another detection, USDA is likely to proceed cautiously, which could delay any border reopening timetable. But now that screwworm incident has been detected on U.S. soil, USDA faces a much higher burden of proof before reopening the border. Even if the Texas case proves isolated, it is difficult to imagine the department authorizing renewed Mexican cattle imports until weeks — or perhaps months — of surveillance data demonstrate the outbreak has been contained. The political downside of reopening too early now far outweighs the economic pressure to restore cattle flows. From a cattle market perspective, the implications are largely supportive for prices. The U.S. cattle herd is already at its smallest level in decades, and Mexican feeder cattle imports play a critical role in supplying feedlots, particularly in Texas and the Southern Plains. Continued border restrictions limit feeder cattle availability and reduce overall supplies moving into the U.S. production system. The Texas detection adds a second bullish element. While the immediate case is not expected to significantly affect cattle numbers, it increases uncertainty about future supplies. Traders understand that any broader spread of screwworm would create animal health concerns, movement restrictions, and additional production costs. Markets typically build a risk premium into cattle values when supply threats emerge. In the near term, the most likely outcome is continued support for feeder cattle prices and a generally constructive outlook for live cattle values, analysts note. Feedlots already face limited placements because of tight calf supplies, and delayed Mexican imports only reinforce that shortage. There is, however, a longer-term risk worth watching. If the outbreak were to expand beyond the current quarantine area, market psychology could shift from a supply-tightening story to a broader animal health concern. That could temporarily pressure futures markets even while supporting cash cattle values. At the moment, USDA officials insist they do not expect such a scenario and believe the infestation can be contained quickly. The bottom line is that the Texas screwworm case will delay any reopening of the border to Mexican cattle, at least until USDA demonstrates successful containment and gathers additional surveillance data. For cattle producers, that means an already-tight supply situation remains intact. For cattle prices, the development is generally supportive, adding another layer of bullishness to a market already operating with historically scarce inventories and record-high beef prices. Extended border closure may accelerate Mexico’s cattle feeding ambitionsNew World Screwworm incident supports U.S. cattle prices in the short term but could encourage a long-term shift in North American cattle flows While the immediate market impact of the closed U.S./Mexico border to Mexican cattle is supportive for U.S. cattle prices, the longer-term implications could extend well beyond the current outbreak and reshape cattle production patterns on both sides of the border. Prior to the Texas detection, some industry participants had hoped USDA could eventually begin discussing a phased reopening of cattle imports from Mexico once surveillance data and sterile fly releases demonstrated that the screwworm outbreak south of the border was under control. The confirmation of a U.S. case changes that equation. Even if federal officials ultimately determine the Texas incident was isolated and successfully contained, USDA now faces a much higher burden before reopening the border. As noted, it is difficult to envision the department authorizing renewed cattle movements from Mexico until it has accumulated weeks, and potentially months, of surveillance data showing there has been no further spread. That reality is supportive for cattle prices.  The bigger question, however, may not be what happens to cattle prices over the next several months but rather how Mexico responds if border disruptions become more frequent or prolonged. Every border closure creates uncertainty for Mexican producers who have long depended on exporting feeder cattle to the United States. If ranchers cannot be confident that cattle will be able to move north when they are ready for sale, the economic incentive to develop domestic feeding capacity becomes stronger. Instead of shipping lightweight calves into U.S. feedlots, producers increasingly have reason to add weight domestically and capture more of the value chain within Mexico. This is not a theoretical discussion. Mexico has already been investing in modern feedlots and meat-processing facilities over the past decade. The country benefits from lower labor costs, growing domestic beef demand, and expanding opportunities to export beef products into international markets. Extended border disruptions only strengthen the business case for additional investment. For U.S. cattle feeders, the strategic concern is that temporary trade interruptions can eventually produce permanent changes in cattle flows. Once feedlots, processing facilities, and supply chains are built, they tend to remain in place. A calf that historically would have crossed into Texas or New Mexico for finishing may increasingly stay in Mexico if producers determine the export market has become less predictable. To be sure, the United States still maintains significant competitive advantages. U.S. feedlots benefit from abundant feed grain supplies, extensive infrastructure, large-scale packing capacity, and access to premium beef markets around the world. Those advantages are unlikely to disappear anytime soon, and the United States will remain an attractive destination for Mexican feeder cattle whenever the border reopens. Nevertheless, the New World Screwworm outbreak highlights a longer-term issue that may become increasingly important. The immediate effect of the border closure is tighter supplies and stronger cattle prices. The longer-term effect could be accelerating Mexico’s efforts to build a more self-contained livestock feeding and processing sector, reducing its dependence on exporting feeder cattle to the United States. For an industry already dealing with the smallest U.S. cattle inventory since the early 1950s, that is a development that deserves as much attention as the current outbreak itself. While the market today is focused on when the border will reopen, the more consequential question may be whether future cattle flows look the same once it does.—Trump signals momentum on U.S./India trade deal as tariff pressures buildPresident says agreement is coming despite tariff uncertainty, underscoring India’s growing importance in U.S. trade and geopolitical strategy President Donald Trump expressed renewed confidence that the United States and India will finalize a long-awaited bilateral trade agreement, offering one of the strongest public signals yet that negotiations remain on track despite recent tariff disputes and legal setbacks affecting the administration’s broader trade agenda. Speaking in the Oval Office, Trump emphasized his personal relationship with Indian Prime Minister Narendra Modi, saying the two leaders “get along great” and predicting that “we’re going to make a deal.” The comments came shortly after Indian officials confirmed that negotiators from both countries had completed another round of discussions in New Delhi aimed at advancing an interim trade framework. The latest negotiations were led by U.S. chief negotiator Brendan Lynch and focused on narrowing differences over market access, tariffs, and trade barriers that have complicated talks for years. While both sides agreed in principle earlier this year to pursue a phased trade agreement, finalizing the package has proven difficult amid shifting U.S. trade policy and domestic political considerations in both countries. At stake is far more than a conventional tariff agreement. For the Trump administration, India represents one of the most strategically important economic relationships in the world. With Washington seeking to reduce dependence on China-centered supply chains, India has emerged as a critical alternative destination for manufacturing investment, technology production, pharmaceuticals, and agricultural trade. The administration’s push for a deal also comes as it seeks bilateral agreements with major trading partners following legal challenges that disrupted portions of its broader reciprocal tariff strategy. Earlier this week, the White House proposed new tariffs of at least 10% on imports from dozens of trading partners, including India, as part of a renewed effort to strengthen U.S. leverage in trade negotiations. India, meanwhile, has been seeking assurances that Washington will ease trade tensions through direct negotiations rather than unilateral actions. New Delhi has specifically pushed for resolution of outstanding Section 301 investigations and other trade disputes as part of a comprehensive agreement. From India’s perspective, securing greater access to the U.S. market remains critical as the country seeks to maintain strong export growth while attracting foreign investment. The United States is already one of India’s largest trading partners, and Indian officials view a bilateral agreement as a way to strengthen economic ties while reducing uncertainty created by recurring tariff disputes. Agriculture could become one of the more sensitive aspects of any final accord. India has historically maintained high tariff barriers on a range of agricultural products to protect domestic farmers, while U.S. negotiators have consistently sought improved access for commodities ranging from grains and oilseeds to specialty crops and processed foods. Although details of the current negotiations remain limited, agricultural market access is expected to be a significant component of any broader agreement. For U.S. agriculture, the importance of India lies less in immediate export volumes and more in long-term market potential. With a population exceeding 1.4 billion and a rapidly expanding middle class, India represents one of the few major global markets capable of generating substantial future demand growth for food, feed, and agricultural products. The geopolitical backdrop also favors an agreement. Both Washington and New Delhi continue to deepen cooperation on security, technology, and supply-chain resilience as concerns about China’s economic and military influence remain elevated. Trade negotiators on both sides recognize that a successful economic agreement would reinforce a broader strategic partnership that has become increasingly important to both governments. While significant issues remain unresolved, Trump’s public optimism suggests negotiators believe progress is being made. Whether a final agreement emerges before the administration’s new tariff actions take effect could determine whether U.S./India trade relations enter a period of greater stability or face another round of uncertainty. For now, both governments appear eager to demonstrate that the world’s two largest democracies can translate growing strategic alignment into a meaningful economic partnership. —NGFA pushes CFTC to update trader reporting systemGrain industry group says more frequent and timely Commitments of Traders reports would improve market transparency and risk management The National Grain and Feed Association (NGFA) is urging the Commodity Futures Trading Commission (CFTC) to modernize its long-standing Commitments of Traders (COT) Reporting Program, arguing that enhancements are needed to keep pace with increasingly complex and fast-moving agricultural markets. In comments submitted to the CFTC on June 4, NGFA said the COT reports remain one of the agency’s most valuable transparency tools, providing producers, grain elevators, cooperatives, processors, exporters, and other commercial participants with important insights into futures market positioning and trading activity. Those reports are widely used to assess market sentiment and guide hedging and risk-management decisions. Among its recommendations, NGFA called on the CFTC to publish COT data twice weekly and reduce the current three-day delay between data collection and public release. The association said timelier reporting would give market participants a better view of evolving market conditions while still preserving data accuracy and trader confidentiality. The group also encouraged regulators to examine whether additional market data could be incorporated into the reporting system to provide a more comprehensive picture of trading activity across agricultural futures markets. NGFA emphasized that any changes should maintain the integrity of the reports and protect trader anonymity, while making the information more useful for commercial hedgers and other market users. Quote of note: “Commitments of Traders reports are an important transparency tool for agricultural markets,” said NGFA President and CEO Mike Seyfert. “NGFA applauds the Commodity Futures Trading Commission’s efforts to review and strengthen the program and looks forward to working with the Commission as it considers opportunities to enhance the usefulness and accessibility of market data for all participants.” The proposal reflects a broader industry push for greater transparency as agricultural markets become increasingly influenced by global capital flows, algorithmic trading, and cross-market investment strategies. More frequent and timely COT reporting could help farmers, grain companies, and commodity traders better monitor shifts in speculative and commercial positioning, potentially improving price discovery and hedging effectiveness.

—Equities today: Global markets traded mixed as investors adopted a more cautious stance amid escalating tensions in the Middle East and growing uncertainty surrounding stalled U.S./Iran peace negotiations. U.S. stock futures were mixed with Dow futures signaling a slightly higher open but Nasdaq showing hefty losses. 

In Asia, Japan -1.3%. Hong Kong -1.2%. China -0.7%. India -0.2%.

In Europe, at midday, London +0.4%. Paris +0.5%. Frankfurt +0.3%.

—Equities yesterday: The Dow surged nearly 900 points to a new record high as investors shifted money out of mega-cap technology stocks and into industrial, financial, and consumer staples shares. Market strength was broad-based, with gains spread across much of the blue-chip index rather than being concentrated in a handful of semiconductor and technology names.

—U.S. labor market remains resilient as may hiring tops expectations

Stronger-than-expected job growth and steady wage gains ease recession concerns but may complicate the Federal Reserve’s path toward lower interest rates

The U.S. labor market continued to demonstrate surprising resilience in May as employers added 172,000 jobs, significantly exceeding market expectations of 85,000. The gain also followed an upward revision to April payroll growth, which now stands at 179,000 jobs. Together, the two months of stronger hiring suggest that businesses remain willing to add workers despite elevated interest rates, trade-policy uncertainty, and concerns about slowing economic growth.

The unemployment rate held steady at 4.3%, remaining near historically low levels and indicating that labor demand continues to absorb available workers. While the rate has edged higher from the lows seen in 2023 and early 2024, it remains well below levels typically associated with economic downturns.

Wage growth also remained firm. Average hourly earnings rose 0.3% from April and were up 3.4% from a year earlier, matching economists’ expectations. Although wage gains have moderated from the rapid pace seen during the post-pandemic recovery, they continue to outpace inflation, supporting household purchasing power and consumer spending.

For financial markets, the report is a double-edged sword. On one hand, stronger hiring reduces fears that the economy is slipping toward recession. Consumer spending accounts for roughly two-thirds of U.S. economic activity, and a healthy labor market generally supports continued economic expansion.

On the other hand, the data may lessen pressure on the Federal Reserve to cut interest rates in the near term. Fed policymakers have repeatedly stated they want greater confidence that inflation is moving sustainably toward their 2% target before easing monetary policy. Continued job growth and steady wage increases could reinforce concerns that inflationary pressures may persist longer than anticipated.

The composition of the job gains will likely receive close scrutiny. Economists will examine whether hiring was concentrated in government, healthcare, education, and leisure sectors — as has often been the case over the past year — or whether cyclical industries such as manufacturing, transportation, construction, and business services showed renewed strength. Broad-based hiring would signal a healthier underlying economy than gains concentrated in a handful of sectors.

For agriculture and rural America, the report offers mixed implications. Strong employment and wage growth generally support domestic food demand and meat consumption, positive factors for livestock, dairy, and specialty crop producers. However, a labor market that remains firm could delay Federal Reserve rate cuts, keeping borrowing costs elevated for farmers already facing tight margins, high land costs, and expensive operating loans.

The report also arrives amid heightened uncertainty surrounding trade policy, tariffs, and global economic growth. Businesses have largely maintained payrolls despite concerns about supply chains, tariffs, and geopolitical tensions. That resilience suggests employers remain optimistic about demand, at least in the near term.

Looking ahead, investors will closely watch upcoming inflation reports and future employment releases to determine whether May’s strong payroll gain represents a temporary rebound or evidence that the U.S. economy continues to grow at a pace strong enough to withstand higher interest rates. For now, the labor market remains one of the strongest pillars supporting the broader economy, reducing recession fears while potentially extending the timeline for monetary policy easing.

—USDA daily export sales: 190,000 MT soybean cake and meal to the Philippines for 2025/26.

—Grain markets mixed overnight as weather pressures corn, while soy complex finds support

Favorable U.S. crop weather and improving Black Sea production prospects weighed on corn futures overnight, while soybeans and wheat posted modest gains as traders adjusted positions ahead of the USDA’s June supply-and-demand report and monitored ongoing geopolitical risks affecting energy markets 

July corn futures fell 4 cents overnight to $4.20¼ per bushel, extending recent weakness as traders continued to focus on generally favorable crop conditions across much of the Corn Belt. Recent rains across Iowa, Nebraska, Missouri and portions of the eastern Midwest have improved soil moisture profiles at a critical stage of crop development, reinforcing expectations for another large U.S. corn crop. The trade is increasingly comfortable with yield prospects near or above trend if weather remains cooperative through June.

Meanwhile, weather developments overseas remain largely bearish for feed grains. Needed warmth and drier conditions have improved winter wheat prospects across Russia and Ukraine, while recent rains in France, Germany and Poland have eased some concerns regarding European production. Strong global feed grain supplies continue to limit upside momentum in corn despite relatively strong export demand.

Soybeans were firmer, with July futures gaining ¾ cent to $11.30¼ per bushel. Support came primarily from strength in soybean meal, which rose $1.00 per ton to $314.70. Meal continues to benefit from steady domestic livestock demand and expectations that renewable fuel policy developments will favor overall soybean crush activity.

The soybean complex remains caught between competing influences. On one hand, favorable U.S. growing conditions and expectations for expanded acreage argue for ample supplies later this year. On the other hand, uncertainty surrounding biofuel policy, ongoing trade negotiations, and geopolitical tensions in the Middle East continue to provide underlying support.

Soybean oil was essentially unchanged at 76.28 cents per pound after recently posting substantial gains. Traders remain focused on renewable diesel and sustainable aviation fuel demand, both of which have become increasingly important drivers of vegetable oil markets.

Wheat futures posted modest gains overnight, with July Chicago soft red winter wheat up 2½ cents to $5.84¼ and July Kansas City hard red winter wheat rising 2¼ cents to $6.22½.

The wheat market is finding support from harvest uncertainty in portions of the Southern Plains, although improving conditions across the Black Sea region and Europe continue to cap rallies. U.S. harvest activity is expected to accelerate during the next week as drier weather develops across key hard red winter wheat areas. Early yield reports have generally been respectable, but traders remain cautious about drawing firm conclusions until harvest advances further.

From a broader perspective, grain markets remain heavily weather driven as summer approaches. Corn appears most vulnerable to favorable weather forecasts given expectations for large acreage and potentially record production. Soybeans continue to derive support from the biofuel story and strength in meal demand, while wheat remains caught between improving global production prospects and periodic weather-related concerns.

Attention now turns to next week’s USDA World Agricultural Supply and Demand Estimates (WASDE) report, where traders will be looking for any adjustments to South American production estimates, export forecasts, and early assessments of new-crop U.S. balance sheets. Until then, weather forecasts and fund positioning are likely to remain the dominant market drivers.

—International grain markets ease as Europe and Black Sea weather improves

Rain in western Europe and favorable conditions in the Black Sea Region Add Pressure to Global Wheat Values

International grain markets traded mostly lower on June 5 as improving weather conditions across key Northern Hemisphere production regions reinforced expectations for larger wheat supplies. Additional rainfall across northern France, Germany and western Poland further stabilized crop prospects, while warm, dry weather in Ukraine and southern Russia accelerated crop development and improved harvest outlooks.

European wheat futures continued to weaken as traders incorporated better yield potential into balance sheets. September Paris milling wheat futures fell to approximately €201.25 per metric ton, down €0.75 from the prior session. That translates to roughly $5.45 per bushel in U.S. terms, compared with Chicago July wheat futures near $5.81 per bushel and Kansas City July wheat around $6.20 per bushel.

The combination of timely moisture in Western Europe and ideal finishing weather across much of the Black Sea region has significantly reduced production concerns that surfaced earlier this spring. France, Germany and Poland are among the European Union’s largest wheat producers, and recent rainfall is expected to support grain fill and improve yield potential. Meanwhile, Ukraine and Russia have benefited from warmer temperatures and relatively dry conditions that are aiding winter wheat maturation and reducing disease pressure.

Russia remains the world’s largest wheat exporter, and any increase in Russian production tends to weigh heavily on global prices. Ukraine’s crop outlook has also improved despite ongoing logistical and geopolitical challenges.

Corn markets were mixed internationally. China’s Dalian corn futures slipped the equivalent of roughly 9 cents per bushel to approximately $8.54 per bushel. While Chinese corn prices remain substantially above U.S. values, domestic demand concerns and ample feed grain supplies continue to pressure the market.

Soybean-related markets also softened. Dalian soybean meal futures declined approximately $1.60 per metric ton to near $412 per metric ton, reflecting weaker feed demand signals and improving global protein meal supplies. Malaysian palm oil futures were modestly lower near 51.5 cents per pound, which provided little support for vegetable oil markets.

The sizeable premium of Chinese corn over U.S. corn continues to underscore China’s efforts to maintain domestic grain self-sufficiency and support local producers. However, those elevated prices also highlight the competitive advantage U.S. exporters could enjoy should trade opportunities expand.

For wheat, the growing weather premium that supported prices during portions of May is steadily eroding. Traders are increasingly focusing on harvest prospects rather than production threats. Unless adverse weather emerges during the next several weeks, the market may struggle to sustain rallies as larger European and Black Sea crops move closer to harvest.

From a U.S. perspective, improving overseas production prospects create additional headwinds for export competitiveness. U.S. wheat exporters already face stiff competition from Russia, and a larger EU crop would further intensify competition in key import markets across North Africa, the Middle East and Asia.

The primary wildcard remains weather in North America. While improving global wheat supplies are weighing on prices today, excessive rainfall in portions of the northern Corn Belt and developing heat concerns in parts of the Northern Plains bear close monitoring. For now, however, international markets are signaling that global wheat supplies are becoming more comfortable, a development that is keeping a lid on grain prices despite generally supportive demand fundamentals.

—AMIS sees smaller global grain crops, record soybean output amid rising freight and fertilizer costs

First outlook for the 2026/27 marketing year points to lower wheat, corn and rice production, while soybeans reach new highs as global trade adjusts to higher shipping costs and emerging El Niño risks

The Agricultural Market Information System (AMIS) is projecting a mixed outlook for global crop markets in 2026/27, with production expected to decline for wheat, corn and rice while soybean output reaches a new record. The report highlights growing concerns about elevated freight costs, higher fertilizer prices and the potential development of a strong El Niño weather pattern that could influence production and trade flows over the coming year.

For wheat, AMIS expects global production to fall from the record 2025 crop because of adverse weather in parts of the Northern Hemisphere, particularly the United States, and reduced planting incentives in some Southern Hemisphere exporters due to higher fuel and fertilizer costs. Wheat consumption is still expected to rise modestly on steady food demand, although feed use may decline as corn and soybean meal remain more competitive. Global wheat trade is forecast to contract amid softer import demand in North Africa and the Near East and tighter exportable supplies from major exporters.

Global corn production is also projected to decline from 2025’s record levels. AMIS cites lower expected yields and reduced acreage in the United States, along with higher production costs. Despite lower output, corn demand is expected to continue growing across food, feed and industrial uses, particularly in South America. Corn trade is forecast to reach a record level, supported by stronger import demand from China, Egypt and Türkiye and large export supplies from Argentina, Brazil and Ukraine. Global corn stocks are expected to remain relatively stable as increases in South America offset drawdowns elsewhere.

Rice production is forecast to decline by about 1.6% from the previous year as lower producer margins and weather-related challenges reduce plantings in most regions. However, rice consumption is expected to continue increasing because of population-driven food demand. Global rice inventories are projected to decline modestly but remain near historically high levels.

Soybeans stand out as the lone major crop expected to expand. AMIS forecasts record soybean production in 2026/27, aided by a possible shift in acreage toward soybeans as producers respond to elevated fertilizer costs. Increased production is expected in Argentina, Brazil and the United States. Demand for soybean oil from biofuel producers in the Americas is expected to support additional growth in soybean utilization, while global soybean stocks are projected to remain near record highs.

The report devotes special attention to global freight markets, warning that disruptions associated with tensions around the Strait of Hormuz are creating a “new normal” of higher shipping costs, longer transit times and greater market volatility. Freight costs for major agricultural commodities have risen sharply, particularly on long-haul routes. Shipping Brazilian soybeans to China is nearly 40% more expensive than in February and about 70% higher than a year ago. Freight costs for Russian wheat shipments to Indonesia have increased roughly 15% since February and more than 30% from a year earlier.

Despite those higher transportation costs, AMIS notes that global grain and oilseed trade has remained resilient, with combined wheat, corn and soybean exports reaching record levels during March and April. The impact of freight disruptions has so far been reflected more in higher landed costs and shifting trade competitiveness than in outright shortages of supply.

Crop conditions remain generally favorable across much of the world, but weather risks are rising. AMIS reports that neutral ENSO conditions are currently in place, but forecasts suggest El Niño could develop rapidly and persist into early 2027. The report assigns an 82% probability of El Niño conditions during May-July 2026 and a 96% probability by late 2026 and early 2027. A strong El Niño could alter rainfall patterns across key agricultural regions, increasing production uncertainty for the next crop year.

On the policy front, several governments have responded to rising input costs and changing market conditions. China has eased urea export restrictions by establishing export quotas and minimum export prices, while the European Union has suspended tariffs on key nitrogen fertilizers and introduced additional support programs for farmers. India increased rice allocations for ethanol production, and Argentina reduced wheat export taxes to improve competitiveness.

Overall, the AMIS outlook suggests that global agricultural markets will remain adequately supplied in 2026/27, but producers and importers will face a more challenging environment marked by higher input costs, elevated freight rates and increasing weather uncertainty.

—Cotton AWP moves lower. The Adjusted World Price (AWP) for cotton is at 63.20 cents per pound, effective today (June 4), down from 68.49 cents per pound the prior week. LDP availability for 2025 cotton production ended May 31.

—Agriculture markets yesterday:

—Vaden defends USDA reorganization, criticizes Democrats for opposition

Deputy Secretary says agency restructuring will improve efficiency, move resources closer to states, and reduce bureaucracy

USDA Deputy Secretary Stephen Vaden is pushing back against congressional criticism of the department’s ongoing reorganization effort, arguing that the changes are designed to improve efficiency, better serve program beneficiaries, and direct more resources toward frontline operations rather than Washington bureaucracy.

In a letter responding to Democratic lawmakers’ concerns, Vaden said opposition to the restructuring mirrors what he characterized as broader partisan resistance to administrative reforms. He noted that questions raised by Democrats had already been addressed during a May 13 House Agriculture Committee roundtable on the reorganization, where he discussed the department’s plans and answered questions from members.

Vaden argued that organizational restructuring is a normal part of managing large institutions and pointed to examples from the private sector, including corporate relocations and workforce consolidations by major companies such as Chevron and Walmart. “When a business is not serving its customers or operating within its budget, corporations regularly restructure,” Vaden wrote, adding that government agencies should be held to similar standards.

A central component of the USDA plan involves the Food, Nutrition and Consumer Services mission area, which oversees nutrition assistance programs including SNAP. Vaden said the reorganization would align comparable positions within the Food and Nutrition Service with similar programs across the federal government while eliminating duplicative management layers and reducing administrative complexity.

The deputy secretary defended the decision to move portions of USDA operations outside Washington, arguing that the current structure has not produced significant improvements in SNAP administration. “The FNS National Office in Alexandria, Virginia, has not significantly reduced SNAP error rates, improved application timeliness, or significantly minimized program fraud,” Vaden wrote. “The same is true of the former regional office structure.”

According to Vaden, USDA’s objective is to provide more resources and technical assistance directly to state agencies responsible for administering nutrition programs rather than maintaining a large concentration of personnel in the National Capital Region.

The letter also addressed employee concerns regarding the closure of the agency’s Braddock Place facility in Alexandria, Virginia. Vaden said the closure was prompted in part by employee complaints about building conditions and safety concerns. He criticized some demands made during labor negotiations over the relocation, saying union representatives sought concessions that included extended employee grievance periods, allowing workers to choose office locations regardless of agency needs, and requests related to workplace amenities such as access to sunlight or “happy” lamps.

The comments underscore the administration’s broader effort to decentralize portions of the federal workforce and shift personnel closer to the constituencies they serve. USDA officials have argued that the restructuring will improve customer service, reduce costs, and place more employees in locations where agricultural production and program delivery occur.

Critics, however, contend that relocating experienced staff away from the Washington area risks losing institutional knowledge and could weaken policy coordination across federal agencies.

The debate is likely to intensify as USDA moves forward with implementation of the reorganization plan and lawmakers continue to scrutinize its impact on employees, program administration, and service delivery for farmers, ranchers, and nutrition assistance recipients.

—Friday: oil market watches diplomacy as Hormuz uncertainty keeps crude elevated

WTI holds near $93 despite sharp daily decline, with traders balancing signs of U.S./Iran progress against ongoing Middle East tensions and supply risks.

West Texas Intermediate (WTI) crude oil futures hovered near $93 per barrel Friday after falling 3.1% in the previous session, as markets weighed tentative diplomatic progress between the United States and Iran against continued geopolitical risks across the Middle East.

Despite Thursday’s selloff, crude prices remain more than 6% higher for the week, reflecting the market’s ongoing concern about disruptions to global energy supplies and shipping through the strategically critical Strait of Hormuz. Recent clashes involving U.S. and Iranian forces had raised fears that any pathway toward restoring normal maritime traffic in the region could be delayed or derailed.

President Donald Trump again offered a more optimistic assessment of negotiations with Tehran, saying discussions were progressing well and suggesting the Strait of Hormuz could reopen quickly if Iran agrees to a memorandum of understanding aimed at ending hostilities. His comments helped ease some of the risk premium that had built into oil markets earlier in the week.

However, investors remain cautious because significant obstacles persist. Iran-backed Hezbollah rejected a U.S.-brokered ceasefire proposal, while Israel continues military operations in Lebanon. Those developments underscore the fragile nature of current diplomatic efforts and leave uncertainty surrounding broader regional stability.

The market also monitored supply-related developments in the Gulf region. Loadings at Oman’s Mina Al Fahal export terminal were temporarily delayed after an explosion, although operations later resumed. While the disruption proved short-lived, it served as another reminder of the vulnerability of energy infrastructure throughout the region.

For agricultural and broader commodity markets, elevated oil prices continue to support transportation and input cost concerns while also providing underlying support for biofuel-related demand expectations.

Traders will be closely watching whether diplomatic efforts can produce tangible results in coming days. A sustained reopening of the Strait of Hormuz would likely pressure crude prices lower, while any renewed military escalation could quickly rebuild the geopolitical premium currently embedded in energy markets.

—Thursday: oil prices slide as ceasefire hopes ease supply fears

Brent and WTI fall more than 2.5% as traders weigh Middle East diplomacy against tight global crude inventories

Global oil prices retreated sharply Thursday as signs of easing tensions in the Middle East outweighed ongoing concerns about disrupted energy flows and tightening crude supplies.

Brent crude settled at $95.03 per barrel, down $2.78, or 2.8%, while West Texas Intermediate (WTI) crude closed at $93.04 per barrel, a decline of $2.98, or 3.1%.

The selloff followed reports that Israel and Lebanon had agreed to implement a ceasefire, raising hopes that broader diplomatic efforts across the region could gain traction. Markets viewed the development as a potentially significant step toward reducing geopolitical risks that have fueled recent gains in crude prices. The ceasefire is particularly important because Iran has previously linked progress in its negotiations with Washington to an end to hostilities involving Hezbollah in Lebanon.

The decline reversed gains from the previous trading session, when crude prices climbed on renewed military activity in the region, including Iranian missile strikes targeting Kuwait and U.S. military actions near the Strait of Hormuz. Thursday’s market action reflected a shift in trader sentiment toward the possibility of de-escalation and a reduced threat to global oil supplies.

Investors also pointed to tentative signs that maritime traffic could eventually improve. While shipping through the Strait of Hormuz remains heavily constrained, reports of vessel repositioning activity near the Persian Gulf sparked speculation that commercial flows could gradually normalize if diplomatic progress continues. Any improvement in transit through the strategic waterway would help alleviate concerns about disruptions to a route that handles a significant share of global crude exports.

Despite the sharp price decline, several fundamental factors continue to support the oil market. The U.S. Energy Information Administration reported that domestic crude inventories fell by 8 million barrels during the week ending May 29, double market expectations for a 4-million-barrel draw. The larger-than-anticipated decline suggests strong refinery demand and robust export activity, underscoring that physical oil markets remain relatively tight.

Analysts also cautioned that risks remain skewed toward higher prices. UBS noted that as long as flows through the Strait of Hormuz remain restricted, supply concerns will continue to underpin the market. Likewise, OPEC maintained its outlook for solid global oil demand growth and left its forecasts unchanged despite ongoing geopolitical disruptions.

The market now appears caught between competing forces: optimism that diplomatic breakthroughs could reduce geopolitical risk premiums and persistent concerns that supply disruptions, low inventories, and constrained shipping routes could quickly reignite upward pressure on prices. As a result, volatility is likely to remain elevated as traders monitor both military developments and the pace of any recovery in regional energy flows.

—Tariff costs fall largely on Americans, new study finds

German researchers argue Trump’s tariff strategy raises costs for U.S. businesses and consumers while doing little to force foreign exporters to absorb the burden 

A new study from Germany’s Kiel Institute challenges one of the central arguments behind President Donald Trump’s aggressive tariff strategy, concluding that American businesses and consumers — not foreign exporters — bear nearly all of the economic costs of higher import duties.

The report, America’s Own Goal: Who Pays the Tariffs?, found that roughly 96% of tariff costs are absorbed within the United States, while foreign exporters shoulder only about 4% of the burden. According to the researchers, the findings suggest tariffs function more as a tax on U.S. importers and consumers than as a penalty on overseas competitors.

The study comes as the Trump administration pursues a new wave of tariff actions, including proposed Section 301 duties of up to 25% on a broad range of Brazilian exports and additional tariffs tied to forced-labor investigations affecting more than 60 countries.

Brazilian economist Lívio Ribeiro of FGV Ibre and BRCG Consulting described the tariffs as a “self-inflicted wound,” arguing that importers, retailers, manufacturers, and logistics companies initially absorb the higher costs before eventually passing them along to consumers. While inflationary effects have not yet fully filtered through the U.S. economy, he said stronger economic growth and a stable labor market increase the likelihood that businesses will ultimately raise prices to protect margins.

Former World Bank vice president Otaviano Canuto agreed, noting that companies may temporarily absorb tariff costs through lower profits but cannot do so indefinitely. He argued that tariffs not only increase consumer prices but also undermine the competitiveness of U.S. manufacturers that depend on imported components and raw materials.

The Kiel Institute pointed to the 2025 tariff experience as evidence. While U.S. customs revenue reportedly increased by roughly $200 billion, the study found little indication that foreign exporters significantly lowered prices to offset the tariffs. Instead, import costs rose for U.S. buyers.

Brazil provided a particularly notable case study. Researchers found that even after tariffs of up to 50% were imposed on Brazilian products in 2025, exporters largely maintained their U.S.-dollar prices. As a result, the tariff burden was transferred almost entirely to American importers. The primary impact on Brazil was reduced export volumes rather than lower export prices.

The study found similar patterns in India, where more detailed customs data showed that tariffs primarily reduced trade flows without generating meaningful benefits for American consumers or businesses.

The findings also challenge the administration’s argument that tariffs can restore U.S. manufacturing competitiveness. Researchers contend that many foreign suppliers maintain long-standing commercial relationships with American buyers, limiting the ability of U.S. companies to quickly shift sourcing. Because suppliers know replacement options are limited, they often have little incentive to cut prices to offset tariffs.

The debate has intensified following the Supreme Court’s decision earlier this year striking down portions of the administration’s previous tariff framework. Several analysts view the new Section 301 investigations, including those targeting Brazil and countries accused of forced-labor violations, as an effort to rebuild trade barriers using authorities that may be more legally durable.

For Brazil, analysts say the likely response will be continued diversification of export markets and deeper engagement with alternative trade partnerships, including the recently implemented EU-Mercosur trade agreement. For the United States, however, the study argues the larger question is whether higher tariffs can deliver their intended economic benefits when the overwhelming share of the costs remain at home.

The political implications could become more significant as midterm elections approach. Higher tariffs may generate additional government revenue and appeal to voters concerned about trade deficits, but economists warn that rising costs for businesses and consumers could increasingly become a headwind if inflationary pressures intensify in the months ahead.

—USTR advances forced-labor tariff strategy as Section 122 deadline nears

Proposed tariffs on imports from 60 countries would replace expiring emergency duties and expand U.S. efforts to combat forced labor in global supply chains

The Office of the U.S. Trade Representative (USTR) has formally published its determination and proposed remedies stemming from a Section 301 investigation into whether foreign governments’ failure to adequately restrict imports made with forced labor places an unfair burden on U.S. commerce. Link

Under the proposal, USTR would impose tariffs ranging from 10% to 12.5% on imports from 60 countries identified in the investigation. The agency is also considering a separate textile and apparel enforcement mechanism aimed at imports from certain countries where forced-labor concerns are viewed as particularly acute.

The move represents a significant escalation of U.S. trade enforcement efforts and provides the Trump administration with a potential alternative tariff authority after the U.S. Supreme Court struck down the administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose broad import duties. Administration officials have indicated the Section 301 proceeding has been placed on an accelerated timeline because the temporary Section 122 tariffs adopted following the court ruling are scheduled to expire on July 24.

The proposal now enters a public comment phase. Written comments are due by July 6, while requests to testify at a public hearing beginning July 7 must be submitted by June 22. USTR noted that the hearing could extend beyond its opening date depending on participation, with post-hearing rebuttal comments due five days after the final hearing session.

The investigation reflects a broader shift toward using forced-labor enforcement as both a human-rights and trade-policy tool. If finalized, the tariffs would create a new framework for addressing countries viewed as failing to police forced-labor practices within their supply chains, while potentially replacing some of the tariff authority lost following the Supreme Court’s IEEPA decision.

For importers, retailers, textile manufacturers, and agricultural exporters, the proceeding bears close watching. The outcome could reshape sourcing decisions, alter supply-chain costs, and become a central component of the administration’s post-IEEPA trade strategy as policymakers seek to maintain leverage over foreign trading partners while addressing forced-labor concerns.

—China shifts livestock policy toward efficiency over expansion

Beijing’s new five-year plan prioritizes profitability, feed efficiency, and competitiveness as meat production growth slows

China’s latest agricultural modernization plan signals a major shift in livestock policy, moving away from the rapid production growth that defined the past five years and toward a strategy centered on efficiency, profitability, and long-term competitiveness.

The 15th Five-Year Plan for Agricultural Modernization, released June 2, reflects lessons learned from a period of extraordinary livestock expansion. The previous plan targeted a 15% increase in annual meat production, from 77 million metric tons to 89 million metric tons by 2025. Chinese producers far exceeded that goal, pushing total meat production above 100 million metric tons last year.

While the surge strengthened domestic food supplies, it also created chronic oversupply across key livestock sectors. Pork and beef prices repeatedly fell to unprofitable levels as production outpaced consumption, forcing government intervention to stabilize markets and support producers.

The new plan takes a noticeably different approach. Rather than setting ambitious growth targets, Beijing now seeks to maintain annual meat production above 95 million metric tons. The target suggests policymakers are comfortable allowing production to retreat modestly from the record levels reached in 2025 if doing so improves industry profitability and market stability.

The pork sector remains at the center of China’s livestock strategy. The plan calls for improved “production capacity regulation and control mechanisms” to keep pork supplies balanced and reduce the severe boom-and-bust cycles that have plagued the industry in recent years. Chinese officials appear increasingly focused on managing production levels to avoid the price collapses that have repeatedly hurt producers and required government intervention.

Beyond pork, the emphasis shifts away from expansion altogether. The plan highlights cost reduction, quality improvement, and efficiency gains across the broader livestock and poultry industries. The message from Beijing is that future success will be measured less by how much meat China produces and more by how efficiently and profitably it is produced.

One of the most significant elements of the plan for global agricultural markets is its continued focus on feed efficiency. China reaffirmed its goal of reducing feed usage by 7% on large-scale farms by 2030 compared to 2023 levels while maintaining production of meat, dairy, and eggs. The initiative is part of a broader effort to reduce dependence on imported feed ingredients and improve resource utilization throughout the livestock sector.

That development carries important implications for global grain and oilseed exporters. For decades, China’s expanding livestock industry served as the primary engine of growth for world soybean demand. Massive imports of soybeans from Brazil, the United States, and Argentina helped support the country’s rapidly growing pork, poultry, and aquaculture sectors.

The new plan suggests that era may be entering a more mature phase. If meat production stabilizes while feed efficiency improves, China’s demand growth for soybeans and feed grains is likely to slow considerably. Over time, feed consumption could plateau or even decline despite stable levels of animal protein production.

For U.S. agriculture, the plan reinforces a growing reality that China’s role in global commodity markets is changing. Rather than being an ever-expanding source of feed demand, China increasingly appears focused on extracting more production from existing resources while reducing its reliance on imported inputs.

The strategy also has competitive implications. Beijing’s emphasis on efficiency, quality, and cost reduction suggests China intends to strengthen the international competitiveness of its livestock sector. As production practices improve and costs decline, Chinese animal protein producers may become increasingly formidable competitors in regional and global markets.

Viewed through a broader policy lens, the livestock strategy is consistent with China’s long-standing food security objectives. Beijing is not seeking to produce significantly more meat. Instead, it is trying to produce enough meat to ensure domestic food security while minimizing costs, improving profitability, reducing feed dependence, and enhancing the sector’s global competitiveness.

For global agricultural markets, the takeaway is clear. The next chapter of China’s livestock industry is likely to be defined not by rapid expansion but by optimization. That shift could moderate long-term growth in soybean and feed grain imports while creating a more efficient and competitive Chinese livestock sector capable of exerting greater influence on global protein markets.

—Global food prices pause after three-month climb

FAO index slips in May as lower vegetable oil prices offset gains in cereals and sugar, but geopolitical and weather risks continue to threaten food inflation

Global food commodity prices edged slightly lower in May, ending a three-month streak of increases, according to the latest Food Price Index from the United Nations’ Food and Agriculture Organization (FAO). The index slipped to 130.8 from 131.0 in April, reflecting what the agency described as a broadly stable global food market.

The modest decline was driven primarily by a 4.6% drop in vegetable oil prices, the first monthly decline for that category this year. Those losses offset higher prices for cereals and sugar, both of which posted notable gains during the month.

Despite the slight monthly easing, the FAO index remains 2.9% above its level a year ago, underscoring the persistent inflationary pressures facing global food markets.

Cereal prices rose 2.6% from April and are now nearly 5% higher than a year ago. The increase reflects growing concerns about weather-related production risks in key growing regions and ongoing uncertainty surrounding global grain supplies. Sugar prices surged 7.5% during May amid reports that a smaller share of Brazil’s sugarcane crop will be directed toward sugar production, tightening export availability from the world’s largest sugar producer.

Meat prices were essentially unchanged, rising just 0.1%, as weaker pork prices largely offset stronger beef values. The continued strength in beef markets reflects tight cattle supplies in several major exporting countries.

FAO officials cautioned that the apparent stability in food markets masks underlying vulnerabilities. Boubaker Ben-Belhassen, director of FAO’s Markets and Trade Division, noted that rising cereal prices highlight the sensitivity of food markets to weather disruptions, energy costs, and agricultural input availability.

Particular attention is being paid to ongoing tensions in the Middle East and shipping disruptions affecting the Strait of Hormuz. Any prolonged interference with trade through the waterway could disrupt fertilizer shipments and increase energy costs, potentially raising production expenses for farmers worldwide and placing renewed upward pressure on food prices.

The May data suggest that global food inflation has stabilized rather than retreated. While lower vegetable oil prices provided temporary relief, rising grain and sugar costs, coupled with geopolitical uncertainty and weather concerns, indicate that food markets remain vulnerable to fresh price spikes during the second half of the year. For consumers and policymakers alike, the report serves as a reminder that food inflation risks remain elevated even as headline commodity indices appear relatively stable.

—SNAP cost-share rule advances, setting up major farm bill fight

OMB completes review of USDA proposal shifting more SNAP costs to states, intensifying debate ahead of Senate farm bill release

The Office of Management and Budget (OMB) has completed its review of USDA’s proposed rule implementing major Supplemental Nutrition Assistance Program (SNAP) cost-sharing changes enacted under the One Big Beautiful Bill Act (OBBBA), moving the administration one step closer to reshaping how the program is financed.

The proposed rule would begin taking effect on Oct. 1, 2026, the start of Fiscal Year 2027, and would cut the federal government’s share of SNAP administrative expenses to 25% from the current 50%, significantly increasing the financial burden on states. A second phase, scheduled for Oct. 1, 2027, would require states with SNAP payment error rates above 6% to assume a portion of benefit costs as well.

The completion of OMB review signals that USDA is nearing publication of the proposed rule, launching what is expected to be a contentious public comment process.

The SNAP cost-sharing provisions remain among the most controversial elements of OBBBA and have become a central obstacle in ongoing farm bill negotiations. Democrats have strongly opposed the changes, arguing they could force states to reduce program participation, cut administrative services, or divert resources from other priorities. Many Democratic lawmakers are demanding at least a delay in implementation, while others are seeking a complete repeal of the provisions.

The timing is particularly significant as Senate Ag Committee Chairman John Boozman (R-Ark.) is expected to release his farm bill framework next week. While there is broad bipartisan support for advancing a new farm bill, the SNAP funding dispute threatens to complicate efforts to assemble the 60 votes needed to move legislation through the Senate.

Republicans view the state cost-sharing provisions as a way to improve program accountability and reduce federal spending, particularly by creating incentives for states to lower payment error rates.

Critics counter that many errors involve paperwork or eligibility determination issues rather than fraud and warn that states could face substantial new budget pressures.

As a result, the SNAP cost-share issue is emerging as one of the most consequential policy debates in Farm Bill 2.0. Whether lawmakers can find a compromise on implementation timing, error-rate thresholds, or state cost obligations may ultimately determine the Senate’s ability to advance a bipartisan farm bill later this year.

—Senate advances border security funding as GOP eyes reconciliation showdown

Party-line vote clears funding for ICE and CBP through Trump’s term, setting up a critical House vote next week on the broader Republican agenda

Senate Republicans narrowly approved legislation to provide long-term funding for U.S. Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP) through the remainder of President Donald Trump’s current term, marking a significant victory for GOP leaders seeking to lock in border-security priorities before the fiscal year 2027 budget cycle.

The measure passed 52-47 largely along party lines after an overnight “vote-a-rama” in which Democrats forced votes on dozens of amendments aimed at reshaping the legislation. Sen. Lisa Murkowski (R-Alaska) broke with her party and voted against final passage, leaving Republicans with only a one-vote margin.

A major point of contention was Republican language establishing an “anti-weaponization” fund, which Democrats argued could be used by the administration to pursue politically motivated investigations or legal actions. Multiple Democratic amendments seeking to strike or limit the fund failed during the marathon amendment process.

The legislation reflects a central Republican argument that border enforcement agencies require stable, multi-year funding after years of operating under continuing resolutions and supplemental appropriations. Supporters contend that guaranteed funding will allow ICE and CBP to expand personnel, detention capacity, technology investments, and border infrastructure without the uncertainty associated with annual appropriations battles.

Democrats countered that the measure provides unprecedented enforcement resources while offering little in the way of immigration reforms or oversight mechanisms. They also criticized what they described as broad executive discretion embedded in several funding provisions.

The Senate vote now shifts attention to the House, where Republican leaders are expected to take up the broader reconciliation package next week after lawmakers departed Washington for the weekend. That legislation remains the centerpiece of President Trump’s domestic agenda, combining tax provisions, energy policy, agriculture programs, border security spending, and federal spending reductions.

The timing is significant because House Republican leaders continue to operate with a razor-thin majority, leaving little room for defections from fiscal conservatives, moderates, or members representing high-tax states. Senate passage of the border funding measure gives Republicans additional momentum heading into what is expected to be another contentious floor debate over reconciliation.

The Senate action also underscores the growing importance of immigration and border security as defining issues heading into the 2026 midterm elections. By approving funding through the end of Trump’s term, Republicans are seeking to ensure that enforcement priorities remain insulated from future appropriations disputes while demonstrating progress on one of the administration’s signature campaign promises.

Attention now turns to the House, where GOP leaders hope to advance reconciliation before lawmakers leave Washington for the July Fourth recess. Success would move Republicans a significant step closer to delivering a legislative package that encompasses tax relief, border security, energy policy, and portions of a long-delayed farm bill framework.

—House advances USDA/FDA spending bill as funding fight shifts to Senate

Measure preserves core agriculture and food safety programs while setting up another battle over spending priorities, nutrition policy and regulatory oversight 

The House narrowly approved a $26.3 billion fiscal year appropriations bill funding USDA, the Food and Drug Administration and related agencies, passing the measure by a 213-210 vote and sending it to the Senate for consideration.

The legislation is one of the annual spending bills Congress must enact before the start of the new fiscal year on Oct. 1. While the measure largely maintains funding for many core USDA and FDA functions, it also reflects Republican priorities on spending restraint, regulatory oversight and federal nutrition programs.

The bill finances a broad range of activities including USDA farm and conservation programs, agricultural research, rural development initiatives, food safety inspections, animal and plant health programs, and FDA oversight of food, feed, pharmaceuticals and medical devices.

For agriculture, lawmakers will closely examine funding levels for the Farm Service Agency, Natural Resources Conservation Service, Agricultural Research Service, Animal and Plant Health Inspection Service and Rural Development programs. Commodity groups and farm-state lawmakers have been pressing appropriators to maintain support for animal disease prevention, export promotion, agricultural research and rural infrastructure projects despite broader budget pressures.

The measure also funds FDA operations at a time when the agency faces increasing demands related to food safety, infant formula oversight, biotechnology reviews, food chemical assessments and implementation of new food traceability requirements. Industry groups have argued that stable FDA funding is critical as the agency works through staffing challenges and growing regulatory responsibilities.

The House vote highlights the continuing partisan divide over federal spending. Republicans argued the bill represents a more fiscally disciplined approach while maintaining support for essential agricultural and food safety functions. Democrats criticized portions of the legislation, contending that some funding reductions could affect nutrition assistance, research, food safety oversight and rural services.

The bill now faces a more difficult path in the Senate, where appropriations legislation typically requires bipartisan support to clear the 60-vote threshold. Senate appropriators are expected to draft their own version, setting up negotiations later this year over final funding levels and policy riders.

The timing is particularly important for agriculture because Congress is simultaneously wrestling with a broader farm bill debate. Issues including SNAP funding, conservation programs, commodity support, agricultural research and rural development are already major points of contention in farm bill discussions, and those same issues are likely to surface during appropriations negotiations.

For producers and agribusinesses, the bill’s advancement provides an early indication that Congress intends to move regular appropriations legislation rather than relying solely on year-end stopgap measures. However, with significant differences expected between the House and Senate versions, substantial negotiations remain before USDA and FDA funding levels for fiscal year 2027 are finalized.

The vote also serves as an early test of House Republican unity on spending legislation and offers a preview of the fiscal battles likely to dominate Congress throughout the remainder of the appropriations season.

—Grocery prices emerge as key political issue ahead of midterm elections

New farmdoc daily survey finds food affordability ranks alongside inflation and the economy as a top voter concern, with grocery bills likely to play a major role in shaping the 2026 midterm elections 

According to a June 4 analysis (link) by Maria Kalaitzandonakes and Jonathan Coppess of the University of Illinois and Brenna Ellison of Purdue University, published in farmdoc daily, concerns about grocery prices and overall affordability are poised to become major drivers of voter behavior in the 2026 midterm elections.

Drawing on results from the May 2026 Gardner Food and Agricultural Policy Survey, the authors found that cost of living and the broader economy ranked as the two most important issues for voters across party lines. Among respondents, 32.8% of Republicans, 44.7% of Democrats, and 48.3% of Independents identified cost of living and inflation as their top election issue. The economy ranked second across all political affiliations.

The survey also examined food and agricultural policy issues and found that food affordability and food safety consistently ranked as the most influential agricultural topics affecting voting decisions. On a scale of 0 to 10, food affordability received some of the highest ratings from respondents regardless of party affiliation, indicating that grocery costs have moved beyond a consumer issue and into the political arena.

Perhaps most significant, more than 40% of respondents in every political category said a candidate’s position on food affordability would strongly influence their vote. The figure was highest among Democrats, where 57.9% said food affordability would strongly affect their decision, compared with 40.9% of Republicans and 44.3% of Independents. Food safety and inspection also ranked highly among voter priorities.

The survey found broad agreement that politicians can influence food prices, although respondents largely viewed the issue through a partisan lens. More than 71% of Republicans said their party could help lower grocery prices, while nearly 69% of Democrats expressed the same confidence in their party. Independent voters were more skeptical, with a majority saying bipartisan cooperation would be required to reduce food costs.

The authors conclude that grocery bills are likely to become a central issue in the months leading up to the November elections. With food prices remaining a highly visible component of household budgets, voter concerns about affordability appear likely to shape campaign messaging and potentially influence congressional outcomes in both rural and urban districts.

—Latino voters emerging as decisive force in Texas politics

Republican gains among Hispanic voters offset Democratic advances in the suburbs, reshaping the state’s electoral landscape

Texas politics has undergone a significant transformation in recent election cycles, with one of the most notable developments being the growing political influence of Latino voters and their increasing willingness to support Republican candidates.

For years, political strategists assumed demographic trends would gradually push Texas toward becoming a battleground state. Instead, the 2024 presidential election demonstrated that shifting voting patterns within demographic groups may be more important than population growth alone.

While Democrats continued to make gains among white, college-educated suburban voters in major metropolitan areas, President Donald Trump expanded Republican support among Latino voters at a pace that more than compensated for Democratic suburban gains.

Some election analysts have argued that Trump’s improved standing among Hispanic voters was the single most important factor behind his strong Texas victory. According to demographic modeling conducted by political analysts, Vice President Kamala Harris could have come much closer to Trump statewide — and potentially approached a statistical tie in some scenarios — had Latino voters supported Democrats at levels seen in previous election cycles.

Trump ultimately carried Texas comfortably, but the underlying coalition that produced that victory looked markedly different from the one Republicans relied upon a decade ago.

The most dramatic changes occurred in South Texas and along the Rio Grande Valley. Counties that had long served as Democratic strongholds continued their movement toward Republicans. In several heavily Hispanic counties, Trump either significantly narrowed Democratic margins or carried counties that had historically voted Democratic for generations.

These gains reflected broader national trends. Latino voters, particularly men and working-class voters without college degrees, increasingly cited inflation, economic opportunity, public safety, border security, and energy policy as major concerns. Republicans successfully appealed to many of these voters by emphasizing economic issues and cultural themes that resonated across South Texas communities.

Meanwhile, Democrats continued to improve their performance in suburban areas surrounding Dallas-Fort Worth, Houston, Austin, and San Antonio. College-educated white voters who once formed a reliable Republican constituency have become increasingly competitive for Democrats during the Trump era.

The result has been a political realignment that is reshaping Texas elections. Rather than relying primarily on suburban and rural white voters, Republicans are building a more diverse coalition that includes a growing share of Hispanic voters. Democrats, meanwhile, are becoming increasingly dependent on urban voters, minority voters in major metropolitan areas, and college-educated suburbanites.

The implications extend well beyond a single election cycle.

For Republicans, maintaining their gains among Latino voters could significantly strengthen the party’s position in Texas for years to come. If Hispanic voters continue moving toward the GOP, it could make Democratic efforts to flip Texas considerably more difficult despite favorable demographic trends.

For Democrats, the challenge is twofold: continue expanding support in suburban areas while rebuilding relationships with working-class Hispanic voters who have become increasingly receptive to Republican messaging.

Political analysts caution that voter coalitions remain fluid, and there is no guarantee that the 2024 results represent a permanent realignment. Latino voters remain one of the most politically diverse and persuadable groups in the electorate, and shifts in economic conditions, immigration policy, or candidate appeal could alter voting patterns in future elections.

Still, the lesson from 2024 was unmistakable. Texas did not become more Republican because suburban voters moved sharply to the right. In many cases, the opposite occurred. Instead, Republicans were able to offset Democratic gains in the suburbs by making historic inroads among Latino voters, particularly in South Texas. That development has fundamentally altered assumptions about Texas politics and highlighted the growing importance of Hispanic voters as perhaps the state’s most influential swing constituency heading into future elections.

— NWS outlook: There is a Slight Risk (level 2/4) of excessive rainfall over parts of the Middle Mississippi Valley/Central Plains, and Southern Plains on Friday and over the Southern Plains/Lower Mississippi Valley on Saturday… …There is a Slight Risk (level 2/4) of excessive rainfall over parts of the Middle Mississippi Valley/Central Plains, and Southern Plains on Sunday… …There is a Slight Risk (level 2/5) of severe thunderstorms over parts of the Central Plains, and Middle Mississippi Valley on Friday and over parts of the Northern High Plains, Ohio Valley, and Northeast on

Saturday… …There is a Slight Risk (level 2/5) of severe thunderstorms over parts of the Northern Plains on Sunday.

—Midwest rains ease crop stress while heat wave looms

Heavy rainfall is improving moisture conditions across key Corn Belt areas, but flooding risks, severe storms, and a sharp temperature swing will keep weather markets on alert

An active frontal system is bringing significant weather volatility across the central United States, delivering heavy rainfall to portions of Iowa, Nebraska, Kansas, and Missouri while setting the stage for a major heat surge followed by a cooler pattern later this month.

The heaviest precipitation has been concentrated along the Nebraska-Kansas-Missouri-Iowa border region, where localized totals reached 3.7 inches at Nebraska City and 4.84 inches at Falls City, triggering flash flood warnings and raising concerns about short-term flooding and field delays.

For much of the northern Corn Belt, however, the rainfall is viewed as highly beneficial. Daily precipitation is expected to continue through the next five days, with areas near Lake Michigan projected to receive more than an inch of moisture. Those rains should help replenish soil moisture and reverse developing dryness concerns that emerged during May.

In contrast, portions of the southeastern Corn Belt are expected to remain largely dry through Saturday, allowing producers a valuable window to complete late-season planting and other fieldwork operations.

The forecast is particularly favorable for the Hard Red Winter wheat region. Below-normal rainfall is expected across much of the southern Plains during the next 10 days, supporting wheat maturation and allowing harvest activity to accelerate. That dry stretch is especially important given indications that a wetter pattern could return during the 11- to 15-day period, potentially slowing harvest progress if crops remain in the field.

Attention is also turning to the northern Plains, where an active severe-weather corridor is expected to develop beginning Sunday night. Multiple rounds of thunderstorms could disrupt field activities and create localized crop concerns across spring wheat and row-crop production areas.

Temperature forecasts are becoming increasingly significant. A strong ridge of high pressure is expected to push temperatures sharply higher across the northern Plains from June 6-10 and across much of the Corn Belt from June 9-13. High temperatures are expected to exceed 90 degrees across large portions of the region, with isolated locations potentially reaching 100 degrees.

While the heat could accelerate crop development where moisture is adequate, it may also increase stress in areas that miss rainfall events. The warming trend appears temporary, however, as forecast confidence continues to build for a notable pattern change by mid-month. Temperatures are expected to fall below normal across much of the central United States during June 15-17, bringing relief from the heat and potentially moderating crop stress.

Overall, the weather outlook remains broadly favorable for crop production, with improving moisture across much of the Corn Belt, supportive harvest conditions for winter wheat, and only localized concerns tied to flooding, severe storms, and short-term heat stress. Markets will continue to monitor whether the anticipated mid-June cooling trend materializes and whether northern Corn Belt rainfall can sustain improving soil moisture profiles heading deeper into the growing season.