Grains find pre-weekend short covering.

This morning’s grain trade is firm-higher, led by corn and soybeans, as short covering has gained momentum ahead of the weekend. US and Chinese trade delegations are meeting in Geneva to discuss renewing some form of trade, following the heavy imposition of tariffs. As of yesterday, there were no expectations from anyone in the grain or commodity world that anything meaningful would be accomplished. However, overnight, rumors emerged that tariffs could be reduced to 50 percent over the weekend. As of this morning, President Trump stated that he is willing to lower tariffs to 80 percent.

Likely topics of discussion this weekend include China honoring the Phase 1 Trade Deal they signed, which would secure $85 billion in US goods, including $35 to 40 billion worth of US agricultural products. This development would dramatically shift the grain market’s outlook from extreme pessimism to potential optimism for grain prices, even without the usual weather issues that often arise in June and can cause price spikes.

Reuters reported overnight that India has expressed willingness to cut tariffs on US goods by 66 percent, reducing them from 13 percent to 4 percent. In exchange for an exemption from US tariffs, India has offered preferential trade access to 90 percent of the goods it imports from the US, including oilseeds, corn for animal feed, and horticultural products. India is also considering lowering or possibly imposing curbs on genetically modified crops. Additionally, US wheat is expected to benefit from lower tariffs, which will become especially important if import needs increase.

In yesterday’s announcement from the United Kingdom regarding a trade deal with the US, ethanol was highlighted as a potential boost for US agriculture. Today’s grain market will likely find support, as traders may look to reduce their short positions ahead of the weekend. Over the past several days, markets have tended to sell off after higher starts in the day session following night session rallies, pushing prices lower throughout the day. That pattern may not hold today.

The central US forecast remains dry and warm over the next eight to nine days, helping to keep spring planting on track. Any rain continues to be pushed further back in the forecast, with a trough and ridge pattern expected to increase Midwest rainfall chances next weekend. Unfortunately, confidence in the extended ten-to-fifteen-day forecast remains low, which could raise concerns for freshly planted crops if moisture fails to develop across the central Midwest and Northern Plains. In China, dryness continues across the Northern Plains despite a few light showers over the past day. Wheat may soon find support as China reenters the wheat market, not just because of Phase 1 obligations but due to actual physical needs.

Yesterday, another round of new contract highs were brought in in the live and feeder cattle trade, with August feeders closing comfortably above 300 and the September contract closing at 300. The feeder cattle cash index gained $2.37 to close at $296, just shy of last week’s record highs. Live sales were reported in the South at $220, similar to earlier in the week, representing a $3 increase. Meanwhile, dressed prices in the North strengthened by $6 to $7, trading at $355 to $360.

Beef cow slaughter rates have been holding between 45,000 and 50,000 head per week, with the latest weekly data for April 26 showing slaughter at 48,477 head. This is down 13 percent from a year ago and 24 percent below the five-year average. The cumulative slaughter for the year, at 809,000 head, is 18,000 less than in 2024 and marks the lowest level since 2016. Strong domestic demand and reduced cow slaughter continue to drive lean beef prices to record levels. April cattle contracts expired just under 216, which could possibly be the June cattle target if the current upside momentum continues.