A possible blink by China on trade.

This morning’s grain trade is higher after making new weekly lows in the night session. At around 3:30 a.m., grain prices abruptly turned higher as it was stated that China had appointed a new trade minister and that it was open to negotiations. They also stated that negotiations need to be respectful, which obviously puts a kink in things, as we know, President Trump does not like to be told what to do. Crude oil also responded by bolting $1.50 off its night session lows.

There have been numerous rumors that our US trade representative, Jamison Greer, is preparing to announce the China vessel tax later this week. The ag industry hopes to carve out bulk commodity trade, or that the US does not tax a China-made vessel if it’s inbound, taking US goods to the world market. Others believe the USTR will kick the China vessel Tax down the road, with the decision delayed until November or December.

India has reported that as of April 1, its wheat stocks rose to 11.8 MMTs, the most in three years and well above the target of 7.5 MMTs. The extra wheat and the pending harvest suggest that India may avoid the import of wheat for another year. However, USTR continues to push for a drop in its duties on US wheat, corn, and vegetable oils to boost imports. Currently, India bans importing GMO crops, but wheat would be high on the list of imports.

The Plains and Midwest will have another dry day before active rainfall patterns start. Showers will start Friday across the Lake states as a clipper system pushes east. Over the next two weeks, a series of storms is forecasted across the Central US in a broad US Trough-Ridge pattern. The pattern looks to support outbreaks of severe weather across the Plains and Delta. Meanwhile, there is broad dryness across the Black Sea winter grain areas into late April. Heat persists across Central and Eastern Europe.

Yesterday was another strong day for live and feeder cattle futures. Nearby April futures stopped just short of $205, but the deferred and cheapest months marked their best daily gains. The April feeder stopped just short of contract highs, while the May contract closed the chart gap that was left three weeks ago. The cash index gained $0.91 to $288.07.

Initial asking prices this week for negotiated trade are $208 in the South, which would be four dollars higher. Trading interest is expected to pick up later today with a firm outlook offered for the week. NAS S will release the April Cattle on Feed report on Thursday afternoon. Average estimates are for the March marketing rate at 101% of last year, a placement rate of 103% in April feedlot inventory, and 98% in May. A year ago, the March placement rate fell 12%, the lowest level since the pandemic, and was the second lowest since 2015. The placement rate of 103% last year will still be 3% below the 5-year average.