After several weeks of uncertainty, the U.S. and China have come to an outline for future trade. U.S. Trade Representative Jamieson Greer has stated that China would be buying “billions” of dollars of ag products, not just soybeans, over the next three years. According to the White House fact sheet, China has agreed to purchase $17 billion of ag products between 2026 and 2028. This is above and beyond the $25 billion in soybeans China has already agreed to purchases over the same period, and a welcome relief for U.S. exporters.

Several private analysts have updated their global grain production numbers. One of these was AgResource who projected a 2026 U.S. wheat crop of 1.62 billion bu, down 18 percent from 2025. The group also lowered its EU/UK production to 138 million metric tons, down 5 percent from 2025. On corn, AgResource is predicting a U.S. crop of 16.09 bbu, 5.5 percent decline from 2025. Their Brazil crop estimate is 136 mmt, down 0.7 percent from last year, and for Argentina it’s 58 mmt, down 6.5 percent on the year.

The South American group Safras also updated its wheat production forecasts. For Brazil, Safras is expecting a 6.16 mmt crop, just below the prior 6.85 mmt estimate. For Argentina, Safras sees a wheat crop of 28.2 mmt, down 5 percent from last year. This is the result of a 5 percent drop in wheat acreage.

The Rosario Grain Exchange has released its revised Argentine crop estimates. Rosario is now predicting a 2025/26 Argentine corn crop of 68 mmt, up 1 mmt from their prior estimate. The soybean crop is estimated at 50 mmt, 2 mmt more than the prior estimate. Rosario is also predicting a 2026/27 Argentine wheat crop from 18 mmt to 19 mmt. If accurate, this is a considerable decline in wheat production from this year’s 29.5 mmt crop. The USDA is currently predicting Argentine crops of 59 mmt on corn, 48 mmt for soybeans, and 21 mmt on wheat.

The Brazilian firm CONAB released its updated 2025/26 production numbers as well. CONAB has the country’s soybean crop at 180.13 mmt, up 1 mmt from last month. Brazil’s soybean exports are estimated at 116 mmt, just above the 115.4 mmt last month. The group’s corn crop estimate is now 140.17 mmt, compared to 139.57 mmt in April. CONAB sees a Brazil wheat crop of 6.4 mmt, down from the April 6.61 mmt estimate. The USDA has Brazil’s crops at 180 mmt on soybeans, 135 mmt on corn and 6.7 mmt for wheat.

Not to be left out, the research firm Datagro is predicting a 1.7 percent expansion to Brazil soybean production this year. This would put Brazil soybean plantings for the 2026/27 year at 123.5 million acres. Even with this small expansion, Datagro is forecasting a soybean crop of 187 mmt compared to 183 mmt for this year. The current USDA forecast for Brazil’s 2026/27 soybean crop is 186 mmt.

The recent rally in corn futures has been welcomed by farmers, but for corn processors, margins have been squeezed. Right now, this is mostly the case for feed and the rally in energy is supporting ethanol margins. The rally in corn has combined with poor pasture ratings and high replacement costs to deter feeder cattle interest at today’s levels.

High priced feed is not just an issue in the United States. China has cut back its corn inclusion in feed rations to 43 percent, down from 47 percent to start the year. China has access to feed wheat and barley, and when combined with U.S. sorghum imports, it is allowing the country to limit high priced corn usage.

The Consumer Price Index data for April was released with negative numbers. The CPI reading for April, which is the gauge of inflation, was a three-year high at 3.8 percent. This was an increase of 0.6 percent from March. Core inflation, which excludes food and energy costs, was above expectations at 2.8 percent, an increase of 0.2 percent from March. Energy prices increased 3.8 percent in April, which was better than the 10.9 percent spike seen a month ago. Food inflation was 0.5 percent in April after a steady reading the prior month. What was most concerning in this data was that inflation outpaced wage growth, indicating more stress for the U.S. economy.

Another set of economic figures added to the negativity from the inflation report. The Producer Price Index in April was up 1.4 percent from March, well above the 0.6 percent that was expected. The producer inflation reading for April when excluding food and energy was 1 percent, also above the 0.4 percent that was expected. Total producer inflation is now 6 percent above last year, the highest reading since 2022. These added production expenses will eventually be passed to consumers.

The Climate Prediction Center has revised its El Nino forecast. The CPC now sees an 82 percent chance of an El Nino weather event being in place by the end of July. The CPC also sees the El Nino lasting through the winter months, with a 96 percent chance of the event lasting through February 2027. If correct, not only will this be a factor for U.S. production, but the start of the Brazil soybean growing season as well. The question is how strong the event will be, with some forecasters seeing it rivaling the 2015/16 El Nino that was the strongest in 145 years.

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