USDA Official: China Starts to Buy U.S. Soybeans

Trump returns to tariff strategy | China pushes back on U.S. tariffs | Cargill official talks CRP and livestock expansion | Update on screwworm | Farm Bureau’s Newton on U.S. farm economy | Rollins, Kennedy, and Carson to hold policy event in Virginia

Link: USTR Launches Public Comment Process on Proposed U.S./China
         Board of Trade
Link: USDA Escalates New World Screwworm Response as Outbreak
         Moves Within 25 Miles of Texas Border

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

TOP STORIES

— China’s reported soybean buying signals early test of the Busan trade deal: USDA Deputy Secretary Stephen Vaden says China has begun purchases, but market awaits confirmation through USDA sales data

— Cargill executive calls for greater CRP flexibility to support cattle expansion: Jarrod Gillig says access to Conservation Reserve Program acreage could help ease forage shortages as the U.S. cattle herd rebuilds

— USTR proposes new Section 301 tariffs tied to forced-labor enforcement: Administration seeks 10%–12.5% duties on imports from 60 major trading partners, positioning the action as a replacement for tariffs struck down by the Supreme Court

— China pushes back on U.S. tariffs, calls for dialogue on trade disputes: Beijing rejects forced labor allegations and warns against escalating trade tensions

— USTR launches comment process for U.S./China Board of Trade: Stakeholders asked to weigh in on tariff reductions, non-sensitive goods, and the structure of a proposed mechanism aimed at creating a more reciprocal and durable U.S./China trade relationship

— USDA signals border reopening depends on Mexico demonstrating faster detection and response system: Officials say cattle ports will remain closed until Mexico proves its surveillance and response network can contain New World Screwworm

— Rollins, Kennedy, and Carson to hold policy event in Virginia: Administration expected to highlight MAHA agenda and federal food policy priorities during June 3 appearance

— Brazil pushes back against proposed U.S. tariffs, signals willingness to retaliate: Vice President Alckmin calls U.S. tariff proposal ‘unfair’ as Brasília seeks negotiations while keeping reciprocal trade measures on the table

— Canada pushes for full 16-year USMCA renewal as review process begins: Ottawa seeks long-term trade certainty while acknowledging tariffs, auto rules, and broader renegotiation demands will dominate upcoming talks

WAR WITH IRAN

— Iran threatens wider maritime disruption, signals potential Red Sea shipping blockade: Quds Force commander warns Bab al-Mandab Strait could face restrictions similar to the Strait of Hormuz, raising concerns about global energy, trade, and supply chain flows

FINANCIAL MARKETS

— Equities today: Global markets slid as fresh hostilities flared in the Middle East after U.S./Iran peace talks stalled

— Equities yesterday: Dow +0.45%, Nasdaq +0.03%, S&P 500 +0.13%

— OECD warns prolonged Middle East conflict could trigger global recession risks and renewed inflation: Economic outlook darkens as energy shock threatens growth, trade, and food costs

— Gold surpasses U.S. Treasuries as top global reserve asset: ECB says central banks are accelerating shift toward bullion as dollar diversification continues

AG ECONOMY

— Farm economy faces prolonged downturn as Senate policy decisions loom: Farm groups point to year-round E15, farm bill action, and additional economic aid as key opportunities to improve farm income and rural economic conditions

AG MARKETS

— USDA daily sales: 136,000 MT corn to South Korea for 2026/27

— Grain futures higher overnight on soybean strength, weather focus: Soybeans lead grain market gains as traders monitor demand, weather, and energy markets

— International grain markets under pressure as Black Sea competition intensifies: Russian wheat weakness and cheaper Argentine corn challenge U.S. export prospects

— Grain markets face competing signals as weather, demand, acreage, and input costs collide: USDA acreage cuts, strong export demand, and global uncertainty offer support, but favorable weather, rising production potential, and technical weakness limit upside

— Brazil sets new soybean export pace as record crop fuels global dominance: Strong Chinese demand, expanding production, and rising inventories position Brazil for another record year in soybean exports

— U.S. rice farmers see opportunity in Cuba as industry faces mounting pressure: Financial Times report highlights Cuba as a potential growth market for struggling southern rice producers

— Agriculture markets yesterday: Corn July $4.40 1/2, Soybeans July $11.65 1/4, Wheat (SRW) July $6.03, Live Cattle August $239.65

DAIRY INDUSTRY

— Precision dairy technologies boost profitability, USDA study finds: New USDA research shows widespread adoption of precision dairy tools, with robotic milking and advanced data systems delivering measurable gains in productivity and net returns

ENERGY MARKETS & POLICY

— Wednesday: Oil rallies above $95 as Middle East tensions and inventory draws tighten market: Escalating U.S./Iran hostilities, uncertainty over peace negotiations, and another large U.S. crude stockpile decline reinforce geopolitical risk premium in energy markets

— Tuesday: Oil climbs as Hormuz risks and falling inventories support market: Geopolitical tensions and tightening global supplies keep upward pressure on crude prices

— SAF shortage exposed by energy crisis as airlines scramble for fuel: Wall Street Journal reports that sustainable aviation fuel remains a tiny share of global jet fuel use, limiting its ability to cushion airlines from soaring energy costs during the Iran-related oil shock

— House advances oil and gas permitting fee extension: Measure would preserve BLM authority to collect drilling permit fees through 2037 and fund faster permit reviews on federal lands

CHINA

— China unveils 15th Five-Year Plan for agricultural and rural modernization: Beijing sets 2030 targets for food security, rural revitalization, technology, and farmer incomes while tightening rural governance

CONGRESS

— Trump administration abandons controversial Anti-Weaponization Fund: Acting Attorney General Todd Blanche says $1.8 billion program will not move forward amid political and legal challenges

POLITICS & ELECTIONS

— Tuesday’s primaries reshape the 2026 midterm landscape: Iowa upset, California uncertainty, and key House battles offer early clues about November

— Walter: Democrats face steep but achievable path to House majority in 2026: Redistricting gives Republicans a structural edge, but political headwinds against President Trump could expand the battlefield

WEATHER

— Wetter western Corn Belt forecast improves soil moisture outlook: Multi-inch rains expected across key crop areas as heat accelerates emergence; Southeast Corn Belt gets planting window

— Historic dryness spreads across the U.S. as drought footprint reaches near-record levels: Expansive moisture deficits heading into summer are raising concerns for crop production, water resources, wildfire risk, and weather-driven commodity market volatility
 

—Iran threatens wider maritime disruption, signals potential Red Sea shipping blockade

Quds Force commander warns Bab al-Mandab Strait could face restrictions similar to the Strait of Hormuz, raising concerns about global energy, trade, and supply chain flows

Iranian officials are signaling the possibility of a broader escalation in maritime tensions, with Gen. Esmail Qaani, head of Iran’s Quds Force, warning that the strategically important Bab al-Mandab Strait could become a new pressure point if fighting involving Israel, Hezbollah, and Gaza intensifies.

According to Iranian state media reports, Qaani said Israeli military actions could lead Iran and its regional allies to make conditions in the Bab al-Mandab Strait “similar” to those currently affecting the Strait of Hormuz. The remarks come as shipping through Hormuz remains under heightened scrutiny amid ongoing U.S./Iran tensions and concerns about disruptions to global oil and liquefied natural gas flows.

The Bab al-Mandab Strait, located between Yemen and the Horn of Africa, serves as the southern gateway to the Red Sea and is one of the world’s most critical maritime chokepoints. Roughly 10% to 12% of global seaborne trade and a significant share of Europe-bound energy shipments transit the waterway. Any sustained disruption would affect container shipping, crude oil movements, refined fuel trade, and agricultural commodity exports moving between Asia, Europe, and the Middle East.

The threat carries additional significance because the Iranian-backed Houthis have already demonstrated the ability to disrupt commercial shipping in the Red Sea since late 2023 through missile, drone, and maritime attacks. A renewed campaign targeting vessels in the Bab al-Mandab Strait would compound existing concerns over navigation through the region and could force more ships to reroute around the Cape of Good Hope, adding time and cost to global supply chains.

The warning comes amid conflicting signals regarding regional diplomacy. President Donald Trump said negotiations with Iran remain active and expressed optimism that an agreement could still be reached.

Meanwhile, Secretary of State Marco Rubio told lawmakers that Iran has shown a willingness to discuss aspects of its nuclear program that it previously refused to negotiate, although he cautioned that significant obstacles remain before any agreement is finalized.

For energy markets, the prospect of simultaneous pressure on both the Strait of Hormuz and the Bab al-Mandab Strait represents a worst-case geopolitical scenario. Hormuz normally handles about one-fifth of global oil and LNG shipments, while Bab al-Mandab connects the Red Sea and the Suez Canal to the Indian Ocean. Disruptions at both chokepoints could significantly increase freight rates, insurance costs, and energy prices worldwide.

Agricultural markets would also be affected. The Red Sea route is an important corridor for grain, fertilizer, vegetable oil, and feed ingredient shipments between Europe, Asia, and the Middle East. Any prolonged interruption could increase transportation costs and further tighten fertilizer supplies, particularly for import-dependent countries such as Brazil, which relies heavily on imported nutrients for crop production.

While Iran has not announced any formal action to restrict passage through Bab al-Mandab, Qaani’s comments underscore Tehran’s willingness to use maritime trade routes as leverage in the broader regional conflict. Markets are likely to closely monitor whether the rhetoric translates into operational actions by Iran or its regional allies in the coming days.

—Equities today: Global markets slid as fresh hostilities flared in the Middle East after U.S./Iran peace talks stalled. Wall Street futures were mixed after U.S. markets closed higher yesterday.

In Asia, Japan +2.5%. Hong Kong -1.6%. China +0.2%. India -0.4%.

In Europe, at midday, London -0.3%. Paris -0.3%. Frankfurt -0.9%.

—Equities yesterday: 

—OECD warns prolonged Middle East conflict could trigger global recession risks and renewed inflation

Economic outlook darkens as energy shock threatens growth, trade, and food costs

The Organization for Economic Cooperation and Development (OECD) is warning that the global economy faces a significant slowdown and potential recessionary conditions in several regions if the conflict in the Middle East continues through 2027. The organization’s latest Economic Outlook projects baseline global economic growth slowing from 3.4% in 2025 to 2.8% in 2026 before recovering modestly to 3.1% in 2027. However, under a prolonged conflict scenario involving continued disruptions to energy supplies and shipping routes, global growth could plunge to 2.1% in 2026 and just 1.8% in 2027 — levels associated with major global economic crises.

The OECD said the greatest threat comes from sustained disruptions to oil and natural gas flows through the Strait of Hormuz and other key Middle East transit routes. Higher energy costs would push inflation higher worldwide, erode consumer purchasing power, reduce business investment, and potentially force central banks to maintain higher interest rates for longer.

For agriculture, the report carries important implications. The OECD noted that fertilizer prices tend to move closely with natural gas markets, meaning a prolonged energy shock could raise global crop input costs. Higher fertilizer expenses would add pressure to grain and oilseed production costs worldwide while also contributing to food inflation.

The organization had already sharply increased its inflation forecasts in March, projecting G20 inflation at 4.0% in 2026 — 1.2 percentage points higher than previously expected because of rising energy prices. Inflation is expected to remain elevated before easing in 2027 if energy markets stabilize.

The OECD warned that Asia would be among the most vulnerable regions due to its heavy dependence on imported Middle Eastern energy. Countries such as Japan and South Korea could face recessionary conditions under a prolonged disruption scenario. Emerging markets would also be particularly exposed because of limited energy reserves and weaker fiscal positions.

Meanwhile, the OECD noted that the United States would likely fare somewhat better than many energy-importing economies because of its position as a major oil and natural gas producer. Even so, higher fuel prices and inflation would weigh on consumer spending and economic growth. Earlier OECD projections estimated U.S. inflation could rise above 4% under a severe energy-shock scenario.

For commodity markets, the report reinforces the growing importance of geopolitical risk premiums in energy, fertilizer, grain, and livestock markets. Any prolonged disruption to Middle East energy supplies could tighten fertilizer availability, increase production costs across global agriculture, and create additional volatility in food and fuel prices heading into 2027.

—Gold surpasses U.S. Treasuries as top global reserve asset

ECB says central banks are accelerating shift toward bullion as dollar diversification continues

Gold has overtaken U.S. Treasuries as the world’s largest reserve asset, marking a historic shift in the composition of central bank reserves and underscoring growing efforts by many countries to diversify away from dollar-denominated holdings.

According to a new report from the European Central Bank, gold accounted for 27% of global central bank reserve assets at the end of 2025, up from 20% a year earlier. By comparison, U.S. Treasuries fell to 22% from 25%, while euro-denominated assets held steady at 15%.

The milestone follows a multi-year surge in central bank gold purchases and a powerful rally in bullion prices that has nearly doubled the value of gold holdings over the past two years. Central banks now hold more than 36,000 metric tons of gold, approaching levels last seen during the Bretton Woods era of the 1960s.

The Financial Times reported that the trend reflects a broader effort by reserve managers to reduce dependence on the U.S. dollar following the 2022 freezing of Russian foreign reserves after Moscow’s invasion of Ukraine. That episode prompted many governments, particularly in emerging markets, to reassess the geopolitical risks associated with holding large quantities of dollar-based assets.

Major gold buyers in recent years have included China, India, Turkey, and Poland. ECB researchers found that countries with closer geopolitical ties to China and Russia have generally increased gold holdings more aggressively than other nations.

Despite the symbolic shift, the U.S. dollar remains the dominant global reserve currency. Dollar-denominated assets still represent roughly 42% of global reserves when all forms of dollar holdings are included, and the dollar accounts for approximately 57% of disclosed foreign exchange reserves worldwide.

The ECB noted that much of gold’s rise reflects valuation gains rather than purchases alone. Gold prices have climbed sharply amid geopolitical tensions, concerns about sovereign debt levels, inflation risks, and growing questions about the long-term trajectory of the international monetary system. At constant prices, Treasuries would still rank higher in reserve portfolios.

For agricultural and commodity markets, the development is another signal that reserve managers are seeking assets perceived as politically neutral stores of value. While it does not indicate an imminent end to dollar dominance, it highlights an ongoing trend toward reserve diversification that has accelerated since 2022 and appears likely to continue as geopolitical tensions remain elevated.

—Farm economy faces prolonged downturn as Senate policy decisions loom

Farm groups point to year-round E15, farm bill action and additional economic aid as key opportunities to improve farm income and rural economic conditions

According to an analysis (link) by John Newton, vice president of public policy and economic analysis, U.S. agriculture is now experiencing its 12th consecutive quarter of economic downturn conditions, driven by a prolonged cost-price squeeze, elevated production expenses and commodity prices that remain below breakeven levels for many producers. Newton argues that several policy measures currently awaiting Senate action — including year-round E15 legislation, a new farm bill and additional economic assistance — could help stabilize farm income and improve economic prospects across rural America. 

Farm country has endured three consecutive years of worsening financial conditions, according to data cited from the Federal Reserve Bank of Kansas City’s Agricultural Credit Survey. The farm income diffusion index registered 66 in the first quarter of 2026, marking the longest sustained downturn in farm economic conditions since the period that began in 2013 and extended through 2020-21.

A major contributor has been the sharp rise in production costs since 2020. Newton notes that total farm production expenses have increased by roughly 34%, or about $120 billion nationwide, pushing annual farm operating costs toward the half-trillion-dollar mark. Meanwhile, prices for many major crops remain 11% to nearly 40% below highs reached just a few years ago, creating a significant margin squeeze for producers.

The resulting financial pressure has reduced working capital, increased reliance on operating loans and contributed to a rise in farm bankruptcies. Credit demand remains near record levels, surpassed only by conditions seen in 2016, reflecting producers’ growing need for financing to manage cash flow challenges.

The downturn is also being felt beyond the farm gate. Newton points to data from Creighton’s Rural Mainstreet Index showing farm equipment purchases have fallen to some of the lowest levels on record as producers delay major capital expenditures amid economic uncertainty.

One bright spot remains farmland values. Federal Reserve and Rural Mainstreet Index data indicate that farmland values continue to post modest year-over-year gains, helping support farm balance sheets despite record debt levels. Strong land values have helped keep aggregate debt-to-asset ratios relatively low and provide collateral that can improve access to credit.

However, Newton cautions that farmland is not a liquid asset and rising land prices do not automatically translate into greater working capital availability.

He also notes that farmland values are increasingly supported by factors beyond agricultural profitability, including consolidation, institutional investment, urban expansion, renewable energy development and growing demand for rural land associated with data center construction.

Looking ahead, Newton argues that several policy initiatives could help improve conditions. He cites congressional economic assistance provided in 2024, provisions in the One Big Beautiful Bill Act that expanded farm safety-net programs and tax relief, new agricultural trade agreements — including the recently announced framework with China that is expected to generate roughly $30 billion annually in agricultural purchases — and renewable fuel policies as positive developments for farm income.

Additional measures remain pending. Year-round E15 legislation and a new farm bill have both cleared the House and await Senate consideration.

Newton also points to growing bipartisan support for supplemental farm economic assistance aimed at offsetting higher fertilizer and fuel costs while helping producers recover from natural disasters.

Newton concludes that combining recently enacted policies with those still awaiting Senate action could significantly improve the economic outlook for farmers, ranchers and rural communities, making the coming months a pivotal period for farm country.

—USDA daily sales: 136,000 MT corn to South Korea for 2026/27. 

—Grain futures higher overnight on soybean strength, weather focus

Soybeans lead grain market gains as traders monitor demand, weather and energy markets

Overnight grain trade was mostly higher, led by gains in the soybean complex as strength in soyoil and continued attention to biofuel demand helped support prices. Corn and wheat futures also posted modest advances, while traders continued to monitor evolving U.S. weather forecasts, export demand prospects and broader commodity market trends.

July corn futures traded at $4.41 1/4 per bushel, up 1/4 cent overnight. Corn remains caught between favorable crop development prospects and concerns that portions of the western Corn Belt could experience periods of heat stress later this month. Recent forecasts have become wetter across parts of the western Midwest, helping ease some production concerns and limiting upside momentum.

July soybeans led the grain complex higher at $11.71 3/4 per bushel, up 6 1/2 cents. The soybean market continues to draw support from firm vegetable oil prices and optimism surrounding export demand. Market participants are also watching for confirmation of reported Chinese purchases of U.S. soybeans following recent comments from USDA officials suggesting that China has begun making purchases under its multi-year purchase commitments.

Soybean meal futures also strengthened, with July meal gaining $1.30 to $327.50 per short ton. Meanwhile, July soyoil rose 98 cents to 79.39 cents per pound, extending recent gains as energy markets remain elevated and traders assess the potential impact of biofuel demand and geopolitical developments in the Middle East on vegetable oil markets.

Wheat futures posted moderate gains overnight. July Chicago soft red winter wheat futures rose 2 3/4 cents to $6.05 3/4 per bushel, while July Kansas City hard red winter wheat futures gained 1 cent to $6.35 3/4. Wheat prices continue to receive support from concerns about global export competition and weather risks in portions of key producing regions, although large global supplies continue to cap rallies.

The grain trade will continue to focus on U.S. weather developments, export demand, energy market volatility and positioning ahead of USDA’s upcoming June 30 Acreage and Grain Stocks reports, which are expected to provide important direction for corn and soybean price expectations heading into the heart of the growing season.

—International grain markets under pressure as Black Sea competition intensifies

Russian wheat weakness and cheaper Argentine corn challenge U.S. export prospects

Global grain markets remain under pressure as traders focus on abundant export supplies, aggressive Black Sea competition and shifting demand patterns. Wheat values in Europe and Russia continue to soften, while South American corn retains a pricing advantage over U.S. supplies heading into the late-summer export window.

Paris September milling wheat futures rose €0.75 to €204.75 per metric ton on Wednesday, though the contract remains near its April lows as traders assess favorable crop prospects across much of Europe and continued competition from Black Sea exporters. At current exchange rates, the Paris wheat contract equates to roughly $5.45 per bushel, remaining competitive against U.S. wheat values.

In the vegetable oil sector, July Malaysian palm oil futures surged 134 ringgit to 4,637 ringgit per metric ton following a holiday closure. The strong rally reflects renewed buying interest and strength across broader edible oil markets. Palm oil remains a key competitor to soybean oil in global feed and food markets, making its price direction important for U.S. soybean demand and crush margins.

Meanwhile, Russian wheat export values continue to trend lower. July Russian 12.5% protein wheat FOB Black Sea is now quoted around $242 per metric ton, down approximately $2 from prior levels as a weakening ruble improves the competitiveness of Russian exports. On a U.S. equivalent basis, $242 per metric ton translates to approximately $6.59 per bushel FOB. Russia remains the world’s largest wheat exporter, and lower Black Sea prices often establish the benchmark for international wheat trade. Recent market reports indicate Russian wheat values have slipped back toward levels last seen earlier this spring as exporters seek to stimulate demand.

For comparison, benchmark U.S. wheat futures are trading near $6.05 per bushel, although Gulf export values typically carry additional premiums for freight and handling.

Corn markets are facing a similar competitive challenge. Argentine FOB corn offers are currently estimated at roughly $0.25 per bushel below comparable U.S. Gulf export quotations for late-summer shipment. That pricing advantage is expected to divert at least a portion of international demand toward South American origin supplies and could slow the pace of U.S. corn export sales during the second half of the summer. The discount comes as Argentina continues to market a large crop while U.S. producers move closer to the critical pollination period.

The pricing relationships underscore the increasingly competitive export environment facing U.S. grain. Russian wheat continues to benefit from currency weakness and ample supplies, while Argentina’s corn remains attractively priced for global buyers. Unless weather concerns emerge in major producing regions or import demand accelerates, Black Sea and South American supplies are likely to remain a significant headwind for U.S. wheat and corn export competitiveness in the months ahead.

—Grain markets face competing signals as weather, demand, acreage and input costs collide

USDA acreage cuts, strong export demand and global uncertainty offer support, but favorable weather, rising production potential and technical weakness limit upside

The grain markets enter June with a mixed fundamental outlook as traders balance tighter acreage projections, solid export demand and geopolitical uncertainty against favorable growing conditions, improving crop prospects and bearish chart signals.

While some of the recent bullish arguments circulating in the marketplace have merit, several factors require additional context. In particular, weather-driven yield optimism and shifting acreage estimates could ultimately point toward larger supplies and lower prices rather than stronger markets.

• For corn, USDA’s March Prospective Plantings report provided an important bullish foundation by estimating planted acreage at 95.3 million acres, down from 98.8 million acres in 2025. The reduction in acreage, coupled with continued strong export demand, has helped underpin futures despite seasonal planting pressure.

Export demand remains one of the strongest pillars of the corn market. U.S. corn sales and shipments have remained unusually robust for this time of year, helping offset concerns about larger South American supplies and slower domestic feed demand.

However, some market commentary has incorrectly characterized the potential development of El Niño conditions as bullish. Historically, El Niño tends to bring more favorable growing conditions to large portions of the Corn Belt and can boost yields above trend. If yields were to approach 190 bushels per acre, as some analysts suggest, that would increase production and likely weigh on prices rather than support them.

Meanwhile, planting progress remains ahead of normal in much but not all of the Midwest, and weather forecasts generally point toward favorable early-season crop development. Technical indicators also remain weak, with December corn continuing to trade below key moving averages and momentum studies remaining negative.

Of note: Where corn in particular is becoming established, the dry conditions have the tendency to prompt corn plants to send their main roots deeper into the soil to access moisture, which also means they are likely more easily tapping into nitrogen supplies. But those deeper roots typically translate into a corn plant that has better standability and allow plants to tap moisture that may be further from the surface. And timely rains during the remainder of the growing season can also address a lot of issues created by dry soil moisture conditions.

The solid condition ratings for corn reflect warmer temperatures that have recently been seen in the central Corn Belt in particular, helping to push corn plants forward after a cooler start had left them looking somewhat “pale.”

• Soybeans present a similarly mixed picture. USDA projected soybean acreage at 84.7 million acres, up from last year but below some pre-report expectations. The acreage figure was initially viewed as supportive because it came in below the highest trade estimates, although it still represents an increase in planted area from 2025.

Perhaps the most significant bullish factor for soybeans is domestic soybean oil demand. The Trump administration’s renewable fuel policies and expanding renewable diesel production continue to tighten soybean oil supplies. USDA projects biofuel use of soybean oil at record levels during the 2026-27 marketing year, helping support crush margins and domestic demand.

Old-crop soybean supplies also remain relatively tight, reflected in nearby futures spreads that continue to show stronger demand for immediate supplies.

Nevertheless, export demand remains a concern. China has not emerged as a major buyer in recent weeks, and global competition from Brazil remains intense. USDA currently projects soybean exports to improve modestly during the 2026-27 marketing year, but demand uncertainty remains a headwind.

• Among the major grain markets, wheat may possess the strongest fundamental bull story. USDA estimated all-wheat planted acreage at 43.8 million acres, the lowest since records began in 1919. Reduced acreage comes at a time when global wheat supplies are tightening due to smaller crops in several exporting nations, including Australia.

U.S. wheat exports have improved, and concerns over production prospects in parts of the Northern Hemisphere continue to support prices.

Meanwhile, speculative funds remain heavily short Chicago wheat futures, reflecting skepticism that weather issues will materially tighten supplies. Wheat futures have struggled to sustain rallies, and technical indicators remain mixed to negative.

• June 30 Acreage report looms large. Beyond weather, traders increasingly view USDA’s June 30 Acreage report as the next major market-moving event.

The report will provide the first comprehensive snapshot of actual producer planting decisions following a spring marked by delayed fieldwork in portions of the eastern Corn Belt and varying profitability signals among major crops.

Questions remain about whether some intended corn acreage in states such as Ohio, Pennsylvania, Indiana and Kansas was ultimately switched to soybeans or prevented from being planted altogether. Meanwhile, excellent planting conditions in Iowa, North Dakota and portions of the western Corn Belt have raised questions about whether producers expanded corn acreage beyond initial intentions.

Many analysts believe the report could reveal 1 million to 2 million acres of shifts among corn, soybeans and prevented planting categories.

For corn, acreage losses below USDA’s March intentions would tighten an already supportive balance sheet and strengthen the bullish demand story. Conversely, larger-than-expected corn acreage could quickly shift market attention toward burdensome production potential if favorable weather persists.

Soybeans face a similar dynamic. Additional soybean acreage could offset some of the support generated by renewable diesel demand and soybean oil consumption. A smaller-than-expected soybean area figure would likely be viewed as supportive, especially if export demand improves later in the marketing year.

Because it reflects actual producer decisions rather than intentions, many traders view the June 30 Acreage report as potentially more important than the March Prospective Plantings survey.

• Cotton faces demand challenges but could benefit from rising input costs elsewhere. Cotton remains the most demand-driven of the major row crops and currently faces a fundamentally different set of market forces than grains and oilseeds.

USDA’s Prospective Plantings report showed U.S. cotton acreage rising to 9.64 million acres, up about 4% from last year as producers shifted some land back into cotton following reduced profitability in competing crops. While acreage increased, the market remains primarily focused on demand rather than supply.

Global cotton consumption remains sluggish, particularly in China, which continues to struggle with weak textile demand and increasing competition from synthetic fibers. Large world cotton inventories continue to hang over the market and have limited the ability of futures to sustain rallies.

From a technical perspective, cotton appears to be attempting to establish a long-term price floor after a multi-year decline. Futures have spent much of the spring building a sideways trading range, suggesting the market may be searching for a bottom. However, significant resistance remains overhead, and most long-term trend indicators remain negative.

Unlike corn and wheat, cotton is less directly exposed to nitrogen fertilizer costs. While fertilizer remains an important production input, cotton producers are generally less vulnerable to spikes in nitrogen prices than corn growers. As a result, rising fertilizer costs could actually improve cotton’s competitive position relative to corn in some production regions if producers begin emphasizing crops with lower fertilizer requirements.

The June 30 Acreage report could also have important implications for cotton. If adverse weather or economic considerations prompted producers to shift acreage away from corn and into cotton in parts of the Southern Plains and Mid-South, planted acreage could exceed March intentions. Conversely, additional prevented planting or acreage losses due to weather could tighten the balance sheet modestly.

Perhaps the biggest outside factor for cotton remains the global economy. Cotton demand is highly sensitive to consumer spending, apparel sales and economic growth. Any improvement in global economic conditions, easing trade tensions between the United States and China, or recovery in textile manufacturing could provide a stronger demand foundation for prices.

For now, cotton’s outlook remains more dependent on demand recovery than production concerns. While corn, soybeans and wheat are increasingly focused on acreage, weather and fertilizer markets, cotton traders are watching global economic growth, consumer demand and textile consumption for signs that the market can emerge from its prolonged downturn.

• Fertilizer markets emerging as a major wild card. Another factor increasingly attracting market attention is fertilizer availability and pricing.

The prolonged disruption of shipping through the Strait of Hormuz has raised concerns about global supplies of nitrogen, phosphate and potash fertilizers. The Persian Gulf region remains a major supplier of both fertilizer nutrients and the natural gas needed to manufacture nitrogen products.

Brazil is particularly vulnerable because it imports the vast majority of its fertilizer requirements. Rising costs and logistical uncertainty are already influencing purchasing decisions ahead of South America’s next planting season. Similar concerns are emerging in Australia, where lower fertilizer application rates have been cited as one factor behind reduced wheat acreage and production forecasts.

Corn is the crop most exposed to rising fertilizer prices because of its heavy nitrogen requirements. Sustained increases in nitrogen costs could discourage future corn acreage expansion and eventually influence producer input decisions.

Wheat is also highly sensitive to fertilizer costs, particularly nitrogen, making global wheat production vulnerable if input prices continue rising.

Soybeans, by contrast, require significantly less nitrogen due to their natural nitrogen-fixing capabilities. If fertilizer inflation persists, soybeans could gain a relative economic advantage over corn, potentially influencing acreage decisions in both the United States and South America.

Meanwhile, fertilizer markets remain closely tied to energy prices. Any reopening of the Strait of Hormuz or easing of Middle East tensions could quickly reduce fertilizer costs and improve global supply availability. Continued disruptions, however, would raise production costs across major agricultural regions and could become a longer-term supportive factor for crop prices.

Taken together, weather, the June 30 Acreage report and fertilizer markets are likely to be the three most important variables shaping grain price direction during the second half of 2026. While demand has remained supportive, the ultimate path for corn, soybeans and wheat may depend on whether acreage and production potential prove larger or smaller than currently expected.

—Brazil sets new soybean export pace as record crop fuels global dominance

Strong Chinese demand, expanding production, and rising inventories position Brazil for another record year in soybean exports

Brazil’s soybean sector is on track for another historic year, with exports already surpassing last year’s pace and reinforcing the country’s position as the dominant supplier in the global oilseed market.

According to Terra Investimentos consultant Geraldo Isoldi, Brazil shipped 51.6 million metric tons (MMT) of soybeans through May, edging above the 51.5 MMT exported during the same period in 2025 before the month had even officially concluded. The milestone reflects the combination of a record harvest, competitive pricing, and continued strong demand from China.

Export momentum remained robust throughout May. Data from Brazil’s Secretariat of Foreign Trade (Secex) showed shipments reached 11.38 MMT by the third week of the month. Based on prevailing shipment rates, Terra Investimentos projected May exports could approach 15.2 MMT, keeping open the possibility of setting a new monthly export record.

The strong export performance follows another upward revision in Brazil’s production outlook. Brazil’s National Supply Company (Conab) increased its 2026 soybean export forecast to 116 MMT from 115.5 MMT, which was already expected to be a record. Private analysts are even more optimistic, with Terra Investimentos forecasting exports could reach 117 MMT this year, up sharply from approximately 108 MMT exported in 2025.

Underlying the export surge is Brazil’s massive soybean crop. Recent estimates place 2026 production above 179 MMT, further widening the country’s lead as the world’s largest soybean producer. The larger harvest is also boosting domestic inventories, with Conab forecasting ending stocks of 10.3 MMT — one of the highest levels ever recorded in Brazil.

China remains the critical driver of Brazil’s export success. Despite expectations earlier in the year that Chinese buying could slow, imports have remained strong. Analysts at Safras & Mercado note that Chinese demand accelerated Brazil’s export program during April and May and continues to support favorable market conditions.

For global soybean markets, however, attention is increasingly turning toward the second half of the year and the arrival of the new U.S. soybean crop. Historically, China shifts a portion of its purchases to the United States following the U.S. harvest, creating seasonal competition between the world’s two largest exporters.

The stakes are significant. China imported approximately 85.4 MMT of soybeans from Brazil last year, making it by far Brazil’s largest customer. Market participants are closely monitoring trade discussions between Washington and Beijing, as some projections suggest China could increase U.S. soybean purchases to roughly 25 MMT during the 2026/27 marketing year if trade relations improve.

Such a shift would not necessarily derail Brazil’s export outlook but could moderate demand growth and alter global trade flows, shipping patterns, and export premiums during the latter half of the marketing year.

For now, Brazil retains a competitive advantage. Large supplies, lower export premiums, efficient logistics, and aggressive Chinese buying have allowed the country to maintain record shipment levels. With production near historic highs and inventories continuing to build, Brazil appears well positioned to remain the dominant force in global soybean trade throughout 2026, even as competition from the United States intensifies later in the year.

—U.S. rice farmers see opportunity in Cuba as industry faces mounting pressure

Financial Times report highlights Cuba as a potential growth market for struggling southern rice producers

U.S. rice farmers are increasingly viewing Cuba as one of the most promising untapped export markets available to American agriculture, particularly as the domestic rice sector faces weak prices, rising fertilizer costs, and intense competition from heavily subsidized Asian exporters. According to the Financial Times, producers in Arkansas and Louisiana believe that expanded access to Cuba could provide a significant boost to an industry that has been under severe financial pressure. 

The opportunity stems from both geography and history. Before the 1959 Cuban Revolution, Cuba was the largest foreign market for U.S. long-grain rice. Today, despite the decades-old U.S. embargo, Cuba remains heavily dependent on imported food and produces only a fraction of the rice it consumes. U.S. growers argue they could quickly supply a substantial share of Cuban demand if financing and trade restrictions were eased.

The timing is notable. U.S. long-grain rice acreage is projected to fall to roughly 1.65 million acres this year, the lowest level since the early 1980s, as producers struggle to compete with lower-cost exports from India, Thailand, Vietnam, and China. Rice industry leaders interviewed by the Financial Times said Asian government subsidies have distorted global trade flows, while higher fuel and fertilizer costs have further squeezed margins.

For Cuba, the situation is equally challenging. The island is facing severe economic stress marked by food shortages, blackouts, and limited access to foreign currency. Tourism revenues — historically a major source of hard currency — have weakened, making food imports increasingly difficult. Yet Cuba’s need for staple products such as rice and poultry remains substantial.

Industry advocates argue that the economics strongly favor U.S. suppliers. Arkansas and Louisiana are among the nation’s largest rice-producing states and are located only a few days by vessel from Cuban ports. Transportation costs from the U.S. Gulf Coast are significantly lower than shipments from Southeast Asia, giving American rice a natural logistical advantage.

The principal obstacle remains financing. Current U.S. law generally allows certain agricultural exports to Cuba, but transactions are subject to strict payment requirements that make trade difficult. Industry groups have long argued that easing credit and financing restrictions would dramatically increase agricultural exports to the island.

For U.S. agriculture, the implications extend beyond rice. A broader opening of the Cuban market could increase demand for poultry, corn, soy products, and other food commodities produced throughout the southern United States. While any major policy shift would require action by the Trump administration and Congress, farm groups increasingly view Cuba as a nearby market capable of absorbing meaningful volumes at a time when global competition is intensifying.

From a farm-state political perspective, the issue could gain traction because Arkansas, Louisiana, Mississippi, Missouri, and Texas all have significant rice interests. With farm income under pressure and export competition rising, Cuba represents one of the few nearby markets where U.S. producers believe they possess a clear freight and quality advantage. If financing barriers were removed, industry leaders contend the impact on southern rice demand could be immediate.

—Agriculture markets yesterday:

—Precision dairy technologies boost profitability, USDA study finds

New USDA research shows widespread adoption of precision dairy tools, with robotic milking and advanced data systems delivering measurable gains in productivity and net returns 

A new study (link) from the USDA Economic Research Service (ERS) finds that precision dairy technologies have become increasingly common across U.S. dairy operations and are contributing to higher profitability, improved labor efficiency, and greater milk production. The report examined adoption trends from 2000 through 2021 using USDA Agricultural Resource Management Survey (ARMS) data and represents one of the most comprehensive analyses to date of precision dairy farming in the United States.

Researchers evaluated ten key technologies and management practices, including computerized milking systems, artificial insemination, embryo transfer, sexed semen, individual cow production records, computerized feed delivery systems, nutritionist-designed rations, and robotic “box” milking systems. By 2021, at least 90% of U.S. milk production came from farms using technologies such as individual cow production records, nutritionist-designed feeding programs, or advanced reproductive technologies.

The study found substantial variation in adoption rates based on geography and herd size. The Fruitful Rim region posted the highest rates of precision dairy technology use, although adoption was evident nationwide. Larger dairy operations were generally more likely to utilize multiple precision technologies, while robotic “box” milking systems were most commonly adopted by farms with herds ranging from 50 to 149 cows. Despite growing interest in automation, only about 6% of U.S. milk production in 2021 came from cows milked using robotic systems, while partially automated technologies such as computerized feed delivery were involved in producing roughly half of U.S. milk.

ERS found that dairy producers adopting precision technologies tended to be younger, more highly educated, and more likely to have access to high-speed internet and modern barn infrastructure than non-adopters. These farms also reported lower expenditures on labor, veterinary care, and medicine while achieving higher milk output per cow and requiring fewer operator hours. The differences were even more pronounced among operations using robotic milking systems.

The report’s most significant finding concerns profitability. USDA estimates that operations using two or more classes of precision technologies — such as advanced milking systems, reproductive technologies, or data-management systems — generate dairy net returns that are approximately 13% higher than those of non-adopters. Similarly, robotic “box” milking systems were associated with a 13% increase in dairy net returns compared with conventional operations. Dairy net returns measure profitability after accounting for operating costs, overhead expenses, milk and cattle sales, and other dairy-related income.

According to ERS, the findings are particularly important as the U.S. dairy industry continues to consolidate into fewer but larger operations. Precision technologies help producers manage larger herds more efficiently by automating routine tasks and generating real-time animal-level data that can improve feeding, breeding, and herd-health decisions. The agency notes that this study provides the first nationally representative estimates of the profitability impacts of robotic milking systems in U.S. dairy production.

—Wednesday: oil rallies above $95 as Middle East tensions and inventory draws tighten market

Escalating U.S./Iran hostilities, uncertainty over peace negotiations, and another large U.S. crude stockpile decline reinforce geopolitical risk premium in energy markets 

West Texas Intermediate (WTI) crude futures climbed above $95 per barrel Wednesday, extending gains for a third consecutive session as traders continued to price in heightened geopolitical risks stemming from escalating tensions between the United States and Iran. The latest advance reflects growing concerns over potential disruptions to global energy supplies as military activity intensifies across the Middle East and uncertainty surrounds the future of U.S./Iran diplomatic talks.

According to U.S. Central Command, Iran launched ballistic missiles toward neighboring countries, prompting retaliatory strikes by U.S. forces on Iran’s strategically located Qeshm Island. The exchange marked another escalation in a conflict that has already raised concerns about shipping security and energy flows throughout the region. While military tensions have increased, President Donald Trump maintained that negotiations with Iran remain ongoing, disputing reports from Iranian state media that claimed talks had been suspended because of the fighting in Lebanon.

The conflicting messages have left energy markets struggling to assess the likelihood of a diplomatic breakthrough versus a broader regional confrontation. As a result, traders have continued to build a geopolitical risk premium into crude prices, particularly given Iran’s proximity to key maritime energy corridors and the broader concerns surrounding oil exports from the Persian Gulf region.

Supporting the rally was fresh evidence of tightening U.S. crude supplies. Industry data released Tuesday showed U.S. crude inventories fell by 6.8 million barrels last week. If confirmed by the Energy Information Administration’s official report, it would represent the sixth consecutive weekly drawdown in domestic crude stockpiles, underscoring strong refinery demand and relatively tight market fundamentals heading into the peak summer driving season.

The combination of declining inventories and escalating geopolitical uncertainty has created a supportive backdrop for oil prices. Market participants remain focused on developments involving Iran, the status of diplomatic negotiations, and any signs that military actions could threaten regional energy infrastructure or shipping routes.

For agricultural markets, sustained crude oil prices above $95 per barrel could provide additional support for biofuel demand, including ethanol and renewable diesel feedstocks, while also raising transportation, fertilizer, and broader input costs across the farm economy. Meanwhile, energy traders will closely watch upcoming U.S. inventory data and developments in the Middle East for clues on whether crude prices can sustain their recent move higher or potentially challenge the $100-per-barrel threshold.

—Tuesday: oil climbs as Hormuz risks and falling inventories support market

Geopolitical tensions and tightening global supplies keep upward pressure on crude prices

Crude oil futures extended their rally Wednesday as traders continued to assess escalating tensions involving Iran and the potential for disruptions to energy shipments through the Strait of Hormuz. Brent crude settled at $96.00 per barrel, up $1.02 (1.1%), while West Texas Intermediate (WTI) gained $1.60 (1.7%) to close at $93.76 per barrel.

The market remains focused on the Strait of Hormuz, a strategic chokepoint that carries roughly one-fifth of the world’s seaborne oil and liquefied natural gas exports. Although Iranian officials indicated Tehran is reviewing a proposed agreement with the United States aimed at ending hostilities, reports suggest communications between the two sides have slowed. President Donald Trump, meanwhile, said negotiations remain active and expressed confidence that a deal could be reached within the next week.

Despite periodic signs of diplomatic progress, traders continue to assign a significant geopolitical risk premium to crude prices. Concerns persist that any escalation in the conflict could result in shipping disruptions or restrictions through Hormuz, threatening global energy supplies. Conflicting statements from U.S., Iranian and Israeli officials have added to uncertainty and increased market volatility.

Fundamental supply indicators have also turned increasingly supportive. The International Energy Agency has warned that global oil inventories are tightening ahead of peak summer demand, raising concerns that the market could become more vulnerable to supply disruptions. In the United States, analysts expect government inventory data to show a crude oil stock draw of roughly 4 million barrels for the week ending May 29. If confirmed, it would mark the sixth consecutive weekly decline in U.S. crude inventories.

The combination of Middle East geopolitical risks, tightening global stockpiles and sustained inventory drawdowns has reinforced bullish sentiment in energy markets. While concerns about slower global economic growth continue to linger, traders appear increasingly focused on near-term supply risks, keeping crude prices near multi-month highs.

—SAF shortage exposed by energy crisis as airlines scramble for fuel

Wall Street Journal reports that sustainable aviation fuel remains a tiny share of global jet fuel use, limiting its ability to cushion airlines from soaring energy costs during the Iran-related oil shock 

The aviation industry’s push toward sustainable aviation fuel (SAF) is facing a reality check as soaring oil prices linked to the conflict involving Iran expose how little alternative fuel is available. According to a report by the Wall Street Journal, SAF accounted for just 0.6% of global aviation fuel consumption last year, leaving airlines overwhelmingly dependent on conventional jet fuel at a time when energy markets have become increasingly volatile.

Airlines have long promoted SAF as the primary pathway to reducing aviation emissions, but production growth has lagged far behind expectations. The United Nations’ aviation agency had projected roughly 5 million metric tons of SAF production by 2026, yet current output stands at just over 2 million tons compared with nearly 300 million tons of annual global jet fuel demand. Delta Air Lines recently told investors that existing global SAF supplies would not meet airline demand for even one week.

A major obstacle remains cost. Prior to the latest energy crisis, SAF was already roughly $1,500 per metric ton more expensive than conventional jet fuel. Most SAF today is produced from used cooking oil, animal fats, and forestry waste, and unlike solar or wind energy, production costs have not declined significantly as the industry has scaled.

Investment challenges are also slowing expansion. While major energy companies such as BP, Shell, Eni, and Repsol have participated in the sector, many have focused on fuel distribution rather than converting refineries to produce SAF. According to Argus Media, roughly 260 SAF projects are planned globally, but only 42 have advanced to construction-ready status and only a handful are operating commercially. Shell’s decision last year to halt development of a major Rotterdam biofuels facility highlighted the economic difficulties facing the industry.

Regulatory mandates are beginning to support demand. The European Union and United Kingdom now require that 2% of jet fuel supplied at airports be SAF, with the mandate gradually increasing to 70% by 2050. However, future SAF requirements will increasingly rely on synthetic e-fuels produced from captured carbon and green hydrogen, technologies that could cost several times more than today’s fossil-based jet fuel.

The United States has made progress in boosting output. Domestic SAF production rose to roughly 240 million gallons in 2025 from just 39 million gallons a year earlier, according to EPA data cited by the Journal. However, that remains far below the Biden administration’s target of 3 billion gallons annually, and the reduction of the federal SAF production tax credit from $1.75 to $1.00 per gallon has created additional uncertainty for investors.

The current energy crisis is renewing interest in SAF not only as a climate solution but also as a supply-security tool. SAF developers report increased inquiries from airlines seeking to diversify fuel sources beyond traditional petroleum markets. Yet industry leaders acknowledge that current production volumes are far too small to offset major disruptions in global oil supplies.

Upshot: As Airlines for America sustainability chief Kevin Welsh told the Journal, SAF should ideally serve as a buffer during oil shocks. “Where we are today, because volumes are so small, we’re not at a point where SAF can play that role.”

—House advances oil and gas permitting fee extension

Measure would preserve BLM authority to collect drilling permit fees through 2037 and fund faster permit reviews on federal lands 

The House on Tuesday approved legislation to extend the federal government’s authority to collect permitting fees from oil and gas companies seeking to drill on federal lands, advancing a measure designed to support and streamline the permitting process.

Lawmakers passed HR 7831 by voice vote, extending through fiscal year 2037 the authority of the Bureau of Land Management (BLM) to collect Application for Permit to Drill (APD) fees. The authority is currently scheduled to expire after Sept. 30, 2026.

Under the bill, all revenue generated from the fees would continue to be deposited into the BLM Permit Processing Improvement Fund. The fund allows the agency to use the money without further congressional appropriations to help accelerate environmental reviews, staffing, and permit processing activities associated with oil and gas development on federal lands.

The APD fee for fiscal year 2026 is $12,850 per application and is adjusted annually for inflation.

Supporters argue the fee structure provides a dedicated funding source that helps the agency process drilling applications more efficiently while ensuring costs associated with permitting are borne by applicants rather than taxpayers.

The legislation was introduced March 5 by Rep. Mike Kennedy (R-Utah), vice chairman of the House Natural Resources Subcommittee on Federal Lands. The measure cleared the full House Natural Resources Committee by unanimous consent on May 14 before advancing to the House floor.

The bill now moves to the Senate, where lawmakers will decide whether to extend the permitting fee program before the current authority expires at the end of the fiscal year.

—China unveils 15th Five-Year plan for agricultural and rural modernization

Beijing sets 2030 targets for food security, rural revitalization, technology, and farmer incomes while tightening rural governance

China’s State Council has released its 15th Five-Year Plan for Accelerating Agricultural and Rural Modernization, laying out the country’s agricultural and rural development strategy through 2030, with longer-term objectives extending to 2035. The plan reinforces President Xi Jinping’s vision of building a “strong agricultural country” while linking food security, technological innovation, rural revitalization, environmental sustainability, and social governance under a single framework.

The document places the “three rural” issues — agriculture, rural areas, and farmers — at the center of national development policy and calls for continued implementation of Xi Jinping Thought and the Communist Party’s rural development agenda. Officials emphasized that agricultural modernization and rural modernization must advance together, with reforms, innovation, and technology serving as key drivers of growth.

A central goal of the plan is strengthening China’s food security and agricultural production capacity. The government aims to improve both the quantity and quality of agricultural output while balancing productivity with environmental sustainability. Officials also highlighted the need to optimize the agricultural supply structure, reflecting Beijing’s ongoing efforts to reduce dependence on imports and improve domestic production of key commodities.

The plan also reiterates China’s commitment to preventing a return to large-scale rural poverty. After declaring victory in its poverty eradication campaign, Beijing intends to maintain monitoring and support systems to ensure vulnerable populations do not fall back into poverty.

Technology plays a major role in the strategy. China plans to expand investment in agricultural science, innovation, and equipment modernization, with the goal of achieving major breakthroughs in what policymakers describe as “new quality productive forces” in agriculture. This includes advanced breeding technologies, mechanization, digital agriculture, artificial intelligence, and other productivity-enhancing tools designed to boost yields and efficiency.

Increasing rural incomes remains another major objective. The plan calls for expanding village-based specialty industries, encouraging entrepreneurship, creating new employment opportunities, and strengthening rural economic development to improve living standards and narrow urban-rural income gaps.

Environmental sustainability is also elevated as a national priority. The government intends to accelerate the green transformation of agriculture by promoting environmentally friendly production practices, reducing resource consumption, and improving long-term agricultural sustainability.

Beyond agriculture itself, the plan focuses heavily on improving rural living conditions. Beijing aims to upgrade infrastructure, expand public services, and improve housing and environmental conditions in rural communities as part of its broader rural revitalization strategy.

The document also contains a notable governance component. Authorities pledged to expand the “Fengqiao Experience,” a model emphasizing local-level dispute resolution and social management. The plan calls for continued campaigns against organized crime in rural areas, efforts to reshape social customs, measures to curb excessive bride-price practices, and stronger oversight of clan organizations and ancestral halls. These provisions reflect the Party’s broader emphasis on social stability and ideological management in rural communities.

To support implementation, the plan calls for stronger agricultural support policies, increased investment in rural development, continued rural reform initiatives, and expanded efforts to recruit and develop rural talent.

For global agricultural markets, the plan signals that China will continue pursuing greater domestic food production, technological self-sufficiency, and rural development while maintaining food security as a strategic national priority. The emphasis on production capacity, agricultural technology, and supply-chain resilience suggests Beijing remains focused on reducing vulnerabilities to external shocks and geopolitical disruptions as it works toward its 2035 modernization goals.

—Trump administration abandons controversial Anti-Weaponization Fund

Acting Attorney General Todd Blanche says $1.8 billion program will not move forward amid political and legal challenges

The Trump administration has formally abandoned its proposed $1.8 billion “Anti-Weaponization Fund,” a program that sparked bipartisan controversy and became a flashpoint in congressional budget negotiations. Testifying before the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies on Tuesday, Acting Attorney General Todd Blanche made the administration’s position clear. “We’re not moving forward with the fund, period.”

The fund had been proposed by the Department of Justice as a mechanism to compensate individuals whom the administration argues were harmed by what President Donald Trump and his allies have described as the “weaponization” of government agencies against political opponents.

The proposal drew sharp criticism from Democrats and skepticism from some Republicans, who viewed it as a potential vehicle for rewarding Trump allies and political supporters. The controversy created complications for Senate Republicans as they attempted to advance a broader immigration enforcement package. GOP leaders were concerned that Democrats would force politically difficult votes on amendments designed either to eliminate the fund entirely or impose strict oversight requirements.

The issue also faced legal headwinds. A federal judge recently paused the administration’s ability to implement the fund, prompting the Department of Justice to state that it would comply with the court’s order while litigation proceeds.

Blanche’s testimony appeared aimed in part at reassuring congressional Republicans that the administration would no longer pursue the initiative, potentially removing a major obstacle to passage of the party-line immigration legislation currently under consideration in the Senate. ICE and CBP funding has been delayed over Republican opposition to the $1.776 billion fund. Blanche’s assurance should help Senate Majority Leader John Thune (R-S.D.) cobble together the votes to pass the reconciliation bill.

Despite announcing the fund’s demise, Blanche defended the rationale behind its creation. He argued that concerns about government misconduct remain valid and reflected a long-standing priority of President Trump. “The reasons for the fund … remain as important as [they] were before,” Blanche told lawmakers, adding that Trump has long argued that some Americans were unfairly targeted by government institutions.

The decision marks a significant retreat by the administration on one of its more controversial Justice Department proposals. While the administration continues to emphasize its broader efforts to address alleged government overreach, the specific funding mechanism will no longer be pursued, according to Blanche’s testimony.

Politically, the move removes a contentious issue from ongoing budget and immigration negotiations while allowing the administration to maintain its underlying argument that government agencies have, at times, been used improperly against certain individuals and groups.

—Tuesday’s primaries reshape the 2026 midterm landscape

Iowa upset, California uncertainty, and key House battles offer early clues about November

The June 2 primary elections across six states — California, Iowa, Montana, New Jersey, New Mexico, and South Dakota — provided one of the clearest early indicators yet of the political environment heading into the 2026 midterm elections. While many races were largely procedural, several contests offered important insights into President Donald Trump’s influence within the Republican Party, Democratic candidate recruitment, and the battle for control of Congress. 

• Iowa delivers the biggest surprise of the night. The most significant development came in Iowa, where businessman and farmer Zach Lahn defeated Trump-endorsed Rep. Randy Feenstra (R-Iowa) in the Republican gubernatorial primary. Lahn cleared Iowa’s 35% threshold needed to avoid a convention, handing Trump one of his few notable endorsement losses of the 2026 cycle.

The result matters for several reasons.

First, it demonstrates that while Trump’s endorsement remains powerful, it is not invincible. Feenstra entered the race with substantial institutional support and national conservative backing, yet Lahn successfully positioned himself as an outsider focused on state-level concerns.

Second, the race creates uncertainty for Republicans in a state that suddenly appears more competitive than expected. With Gov. Kim Reynolds not seeking another term, Iowa will have its first open gubernatorial contest since 2006. Democrat Rob Sand, currently the state’s only elected Democrat holding statewide office, enters the general election as a well-funded and credible challenger.

The Senate race also crystallized. Democratic state Rep. Josh Turek secured his party’s nomination and will face Rep. Ashley Hinson (R-Iowa) for the seat being vacated by retiring Sen. Joni Ernst (R-Iowa).

Democrats believe Iowa could become one of their best Senate pickup opportunities if national conditions continue to move against Republicans.

• California offers mixed signals. California hosted the highest-profile primary night of the cycle, with the race to succeed term-limited Gov. Gavin Newsom attracting national attention.

Early results showed former HHS Secretary Xavier Becerra and Republican Steve Hilton among the leading candidates, although several prominent Democrats, including former Rep. Katie Porter (D-Calif.) and former Los Angeles Mayor Antonio Villaraigosa, fell short.

For Republicans, Hilton’s performance offers a measure of optimism in a state where statewide victories remain elusive. However, California’s top-two primary system means the ultimate partisan implications may not become clear until final vote tabulations are completed.

The broader significance is national. California’s congressional map could become one of the primary battlegrounds in the fight for House control, and both parties are investing heavily in competitive districts across the state.

California’s 1st Congressional District: Gallagher wins, but November could be different. The immediate successor to the late Rep. Doug LaMalfa (R-Calif.) is likely to be James Gallagher, who won Tuesday’s special election outright with more than 50% of the vote, avoiding an August runoff. Gallagher, a longtime California assemblyman from the northern Sacramento Valley, was widely viewed as the Republican establishment favorite and had Trump’s endorsement.

However, the bigger story is November.

California’s voter-approved redistricting overhaul dramatically altered the district. The old LaMalfa district was a reliable Republican seat. The new version stretches westward into Sonoma County and other Democratic-leaning areas, making it substantially more competitive.

The likely Democratic challenger is Mike McGuire, who finished second in the special election. McGuire is well-known throughout Northern California and has a fundraising network that could make the race nationally competitive.

Political significance: Republicans gained an immediate House seat replacement, preserving a narrow GOP majority. But Democrats now see the redesigned CA-1 as one of their best pickup opportunities in November. What looked like a safe Republican district under LaMalfa may become a true battleground.

•New Jersey highlights the House battlefield. While New Jersey lacked a marquee statewide race, several House primaries helped define the November battlefield.

Democrat Rebecca Bennett secured the nomination in the highly competitive 7th Congressional District and will challenge Rep. Tom Kean Jr. (R-N.J.) in what is expected to be one of the nation’s premier swing-seat contests. The district has become a top Democratic target as the party seeks to chip away at the Republican House majority.

Meanwhile, former Army surgeon Adam Hamawy emerged as a prominent Democratic nominee in the state’s 12th District, underscoring the continuing influence of progressive activists within portions of the Democratic coalition.

New Jersey’s results suggest Democrats continue to focus heavily on suburban districts that shifted away from Republicans during recent election cycles.

•New Mexico produces a historic candidate. One of the most consequential gubernatorial nominations occurred in New Mexico, where former Interior Secretary Deb Haaland won the Democratic nomination for governor. If elected in November, Haaland would become the nation’s first Native American woman governor.

Republicans nominated Greg Hull, setting up a race that will test whether Democrats can maintain their recent strength in the Southwest despite concerns about inflation, border security, and economic conditions. The contest is likely to attract substantial national attention and outside spending.

•Montana and South Dakota remain Republican strongholds. The primaries in Montana and South Dakota generated less national attention but still helped shape the general-election map.

Both states continue to lean heavily Republican, and most of the key contests centered on determining which Republican candidates would advance to November. While Democrats remain competitive in select races, neither state currently appears likely to become a major battleground compared with Iowa, New Jersey, or California.

However, Republican turnout levels and margins in these states will provide strategists with useful clues about voter enthusiasm heading into the fall campaign.

•South Dakota GOP gubernatorial primary heads to runoff after fragmented vote

Doeden finishes first, Rhoden advances, Johnson eliminated in major upset

South Dakota Republicans will hold a July 28 runoff election for governor after no candidate cleared the 35% threshold required to secure the nomination outright in Tuesday’s primary. The result sets up a two-way contest between businessman Toby Doeden and incumbent Gov. Larry Rhoden while eliminating Rep. Dusty Johnson (R-S.D.) in one of the night’s biggest surprises.

With nearly all votes counted, Doeden led the field with approximately 31% of the vote, followed by Rhoden at 25%. Johnson finished third with 23%, while State House Speaker Jon Hansen received about 21%. Because no candidate reached the required threshold, the top two finishers advance to a runoff that will likely determine South Dakota’s next governor.

The outcome represents a significant setback for Johnson, a three-term congressman who entered the race as one of the best-known candidates in the field and was widely viewed as a leading contender. Instead, he failed to secure a runoff spot as Republican voters split among four major candidates.

Doeden’s first-place finish underscores the continued strength of outsider and populist candidates within Republican primaries. The Aberdeen businessman largely self-funded his campaign and focused heavily on property tax relief, government reform, and anti-establishment themes. His message resonated with conservative voters looking for a break from traditional Republican leadership.

Rhoden, who became governor after former Gov. Kristi Noem joined the Trump administration, relied on his incumbency and support from many establishment Republicans to secure second place. While finishing behind Doeden, Rhoden now has an opportunity to consolidate support from voters who backed Johnson and other establishment-oriented candidates in the first round.

The results also highlight an emerging divide within South Dakota Republicans between the party’s traditional governing wing and a more populist faction that has gained momentum in recent election cycles. That dynamic will likely define the runoff campaign over the next eight weeks.

From a national perspective, the race is another example of Republican primary voters showing a willingness to challenge establishment candidates. Combined with Tuesday’s gubernatorial upset in Iowa, where Trump-endorsed Rep. Randy Feenstra lost his primary, the South Dakota results suggest grassroots Republican voters remain highly independent and focused on state-specific issues rather than institutional endorsements.

Although Democrat Dan Ahlers awaits the Republican nominee in November, South Dakota’s strong Republican lean means the July runoff is widely expected to determine who succeeds Rhoden and leads the state into 2027. The contest between Doeden’s outsider campaign and Rhoden’s incumbent operation now becomes one of the most closely watched Republican gubernatorial runoffs of the 2026 cycle.

•What the results mean for November. Three broader themes emerged from Tuesday’s elections.

First, candidate quality continues to matter. Iowa’s gubernatorial upset demonstrated that endorsements and fundraising advantages can be overcome by strong grassroots campaigns and effective messaging.

Second, Democrats appear increasingly focused on recruiting candidates with moderate profiles in competitive states. The nominations of Josh Turek in Iowa and Rebecca Bennett in New Jersey reflect a strategy aimed at appealing to suburban and independent voters.

Third, control of the House and Senate remains highly competitive. Several of the candidates selected Tuesday will immediately move into races that could determine congressional control in 2027. Iowa’s Senate race, New Jersey’s swing House districts, and California’s competitive congressional contests all remain firmly in play.

For Republicans, the evening generally produced nominees aligned with the Trump administration, but Iowa served as a reminder that the party’s grassroots electorate remains willing to chart its own course.

For Democrats, the results offered evidence that they are assembling a potentially competitive midterm coalition, particularly in suburban districts and open-seat contests.

With less than five months until Election Day, Tuesday’s primaries transformed the 2026 midterms from a theoretical contest into a defined battlefield. The candidates are now set, and the fight for control of Washington enters its next phase.

—Walter: Democrats face steep but achievable Path to House majority in 2026

Redistricting gives Republicans a structural edge, but political headwinds against President Trump could expand the battlefield

Recent Republican-led redistricting efforts in Louisiana, Tennessee, and Alabama have reshaped the 2026 House landscape and strengthened the GOP’s structural advantage heading into the midterm elections. According to analysis by political analyst Amy Walter of the Cook Political Report, Democrats currently face a difficult mathematical path to reclaiming the House, though broader political conditions could significantly improve their prospects over the next several months.

Latest ratings. Following Louisiana’s adoption of a new congressional map and assuming Alabama’s revised map survives legal challenges, the Cook Political Report’s latest ratings show Republicans favored in 212 House seats compared to 205 seats leaning Democratic. Another 18 districts are currently rated as Toss Ups. Under that scenario, Democrats would need to capture roughly 13 of the 18 Toss Up races — about 72% — to secure the 218 seats needed for a majority, while Republicans would need to win only about six Toss Ups to maintain control.

On paper, that presents a daunting challenge for Democrats. However, Walter argues that the broader political environment may offset some of the GOP’s structural advantages. President Donald Trump is currently facing weak approval ratings, while Democrats hold a reported seven-to-eight-point advantage on the generic congressional ballot, creating conditions that could resemble previous wave elections.

Historical precedent suggests that the number of competitive seats often expands as Election Day approaches. Walter points to the 2018 midterm cycle, when Democrats initially appeared to face similarly long odds. At this stage in 2018, Cook Political Report ratings showed Democrats favored in just 198 seats, Republicans favored in 212, and 25 Toss Ups. Democrats would have needed to win roughly 80% of those Toss Ups to gain control. As the political environment deteriorated for Republicans during that cycle, however, more GOP-held districts moved into competitive territory. By Labor Day, Democrats needed to win only about half of Toss Up races to secure a majority. By late October, that threshold had fallen to roughly 30%, and Democrats ultimately captured about 70% of Toss Up contests while gaining 40 House seats overall.

The key difference between 2018 and 2026 is the size of the potential battlefield. In 2018, more than 60 Republican incumbents represented districts that President Trump had either lost or carried by 10 points or less. Today, only about two dozen Republican-held districts fall into that category, limiting the number of seats that can realistically become competitive.

Walter notes that roughly half of those potentially vulnerable Republican districts are already rated as Toss Ups or Lean Democratic, meaning many of the most competitive opportunities are already reflected in current ratings. That creates a ceiling on how large a Democratic wave can become compared to previous cycles.

Still, if political conditions continue to favor Democrats, additional Republican-held districts could move into the competitive column. Walter outlines a plausible late-cycle scenario in which Democrats are favored in 206 seats and Republicans in 203, with a larger pool of Toss Ups remaining. Under those conditions, Democrats would need to win fewer than half of the Toss Up contests to reclaim the majority. If they matched their 2018 performance and won roughly 70% of Toss Up races, they could net approximately 18 seats.

The analysis underscores a central reality of the 2026 House battle: Republicans retain a meaningful structural advantage due to redistricting and the limited number of competitive districts, but favorable political conditions for Democrats could still produce enough movement in the playing field to put House control within reach. The outcome will depend less on the current map and more on whether national political trends continue pushing additional Republican-held districts into contention over the final months of the campaign.

— NWS outlook: xxx

—Wetter western Corn Belt forecast improves soil moisture outlook

Multi-inch rains expected across key crop areas as heat accelerates emergence; Southeast Corn Belt gets planting window

The U.S. weather outlook has turned considerably more favorable for crop development and soil moisture recharge, particularly across the western Corn Belt, where forecasters have significantly increased expected rainfall totals over the next two weeks.

According to the latest forecast updates from the Weather Prediction Center, widespread rainfall of 2 to 4 inches is now expected across much of the western Corn Belt during the next 15 days. The wetter outlook marks a notable shift from earlier forecasts and should help replenish soil moisture reserves in portions of Iowa, Minnesota, Nebraska, South Dakota, and surrounding areas that have been experiencing growing dryness concerns.

The moisture pattern is expected to gradually expand eastward later this week, bringing additional rainfall opportunities to portions of the central Corn Belt on Thursday and Friday. However, the southeastern Corn Belt — including parts of Illinois, Indiana, Ohio, and Kentucky — is expected to remain relatively dry through the upcoming weekend.

That dry stretch is viewed as beneficial for producers still working to complete spring planting operations. Field conditions should improve across those areas, allowing farmers an important opportunity to finish corn and soybean seeding before a more active precipitation pattern potentially returns next week.

Meanwhile, temperatures across the northern Plains and western Corn Belt are forecast to remain above to well above seasonal norms through at least June 10. The warmest anomalies are expected around June 6-7 and again near June 10, creating favorable conditions for rapid germination, crop emergence, and early vegetative growth.

The combination of increasing moisture and warmer temperatures could provide a significant boost to newly planted corn and soybean crops, particularly in regions where planting was delayed by earlier weather disruptions.

Further south, the Hard Red Winter wheat belt continues to benefit from recurring rainfall events. Additional precipitation across Kansas, Oklahoma, Texas, and neighboring states is expected to build upon recent moisture gains that have improved yield prospects in many wheat-producing areas.

While excessive rainfall remains a concern in isolated locations, the overall pattern continues to support grain fill and crop development.

Looking beyond the next 10 days, forecast models are showing increasing confidence that a broad cooling trend will develop across the central United States between June 13 and June 17. The anticipated moderation in temperatures could help reduce crop stress, slow evaporation rates, and improve moisture retention following the current period of warmth.

For grain markets, the evolving weather pattern presents a mixed signal. Improved rainfall prospects across portions of the western Corn Belt and continued moisture in the wheat belt are generally viewed as production friendly. However, traders will continue monitoring whether forecast precipitation verifies, particularly in drought-affected areas, as weather remains one of the most important drivers of yield potential heading into the critical summer growing season.

—Historic dryness spreads across the U.S. as drought footprint reaches near-record levels

Expansive moisture deficits heading into summer are raising concerns for crop production, water resources, wildfire risk, and weather-driven commodity market volatility

The United States is entering the summer growing season with one of the broadest areas of dryness ever recorded by the U.S. Drought Monitor. While claims that drought covers 77% of the continental United States overstate the extent of official drought classifications, they accurately capture the extraordinary reach of dry conditions across the country. When both drought and “abnormally dry” areas are combined, nearly three-quarters of the Lower 48 states have been affected by moisture deficits this spring, making 2026 one of the most widespread dryness events since national drought monitoring began in 2000.

The 77% figure requires an important distinction. According to the latest U.S. Drought Monitor data, approximately 60.8% of the continental U.S. was classified in moderate to exceptional drought (D1-D4) as of late May. However, when areas categorized as abnormally dry (D0) are included, the total footprint expands to roughly 77% of the country.

Even with that clarification, the broader story is significant. The extent of dryness observed during late spring 2026 ranks among the largest in the 26-year history of the U.S. Drought Monitor. Unlike previous drought episodes that were concentrated in the Southwest, Southern Plains, or Western states, this year’s dryness has stretched across multiple regions simultaneously, including portions of the Southeast, Mid-Atlantic, Great Plains, Rockies, and sections of the Midwest.

For agriculture, the timing is especially important. Corn and soybean crops are entering critical early development stages, while many livestock producers are already managing pasture stress and reduced forage growth. Soil moisture reserves that typically support crops through early summer have been depleted in many areas, increasing dependence on timely rainfall during June and July.

Winter wheat producers have also been closely monitoring conditions. While recent rains have improved prospects in parts of the Southern Plains, significant moisture deficits remain in portions of the western Great Plains and Northern Plains. Dry conditions can affect yield potential, grain fill, and pasture availability for cattle operations.

Water resources are facing similar challenges. Below-normal snowpack and runoff in parts of the West have reduced streamflow projections, while low reservoir levels and declining groundwater supplies remain concerns in several regions. In the Southeast, prolonged dryness has increased wildfire danger and placed pressure on local water systems.

Commodity markets are paying close attention because widespread dryness does not automatically translate into crop losses. The critical factor will be whether weather patterns shift during the summer. Much of the Corn Belt and Plains can still recover from spring dryness if rainfall improves during key reproductive stages for corn and soybeans. However, if hot and dry conditions persist into July and August, production concerns could quickly intensify.

The current situation differs from the historic 2012 drought, which developed into a severe growing-season event that sharply reduced crop yields across the Midwest. Nevertheless, the breadth of today’s dryness provides a reminder of how quickly weather can become a dominant market factor when large portions of the country enter summer with depleted moisture reserves.

For producers and traders alike, the next several weeks will be critical. Forecasts for precipitation, temperature, and soil moisture recharge are likely to play an increasingly important role in shaping expectations for crop yields, livestock forage conditions, water supplies, and agricultural commodity prices through the remainder of the growing season.