Good morning!
Grain futures prices higher overnight… As of 6:00 a.m. CST, May corn was up 4 cents. May soybeans were 10 cents higher. May soybean meal was slightly down, while May bean oil prices were sharply up. May SRW wheat was up 4 1/2 cents. May HRW wheat was 4 cents higher. Technical buying was featured overnight as the grain markets remain in price uptrends on the daily bar charts. The corn and soybean markets bulls are impressive at mid-week, having so far recovered well from the big price downdrafts seen on Monday. Wheat bulls have struggled a bit more but at mid-week are producing decent gains. The key outside markets today see the U.S. dollar index modestly higher, with Nymex crude oil prices up and trading around $85.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.16 percent.
Latest on the war in Iran…
--The IEA said to propose releasing record 300-400 million barrels from reserves
--Market volatility follows a day of mixed messages from U.S. officials
--Three ships were hit in Middle East; drones fell near Dubai airport
-- Tuesday night was rough in Tel Aviv, with four volleys of Iranian missiles fired
--In Bahrain, sirens are sounding in the country
--Iran also staged more strikes against the United Arab Emirates
--U.S. and Israel continuing to hit targets in Iran
-- Trump warns Iran against laying mines in Strait of Hormuz
-- The U.S. said no oil tanker has been escorted by its navy through Strait of Hormuz, refuting earlier social media post by Energy Secretary Chris Wright.
--Bloomberg headline: “War in Iran is creating a fertilizer crisis like never before”
The International Energy Agency is proposing a release of emergency crude oil reserves that would be the largest-ever in its history, with a decision possible later today, according to a person familiar with the matter and as reported by Bloomberg. The IEA has proposed a release in the range of about 300 million to 400 million barrels, the person said, as governments seek to contain a spike in energy prices driven by the Middle East war. The move under consideration would exceed the 182 million barrels that IEA members put into the market in 2022 after Russia invaded Ukraine. The IEA has said its 32 members hold more than 1.2 billion barrels in emergency stockpiles, including the largest buffer, the U.S. Strategic Petroleum Reserve.
One more day of warmer temps over eastern half of U.S. … The National Weather Service today said there will be one more day of well- above-average, spring-like temperatures across much of the eastern U.S. on Wednesday. However, an approaching cold front will bring a sharp cool-down to more seasonable conditions on Thursday. Widespread showers and thunderstorms are expected to continue today ahead of a cold front stretching from the Ohio Valley/mid-Atlantic southwest through the Tennessee/lower Mississippi valleys to the Gulf Coast. There is a risk of severe weather (level 2/5) across the region for at least an isolated threat of large hail, damaging winds, and tornadoes. From eastern Texas through the lower Mississippi Valley there is a greater threat for tornadoes. To the north, a swath of wintry precipitation is forecast from the Great Lakes to northern New England today. Then on Thursday an intensifying clipper-like system will quickly sweep eastward across the northern Plains towards the Great Lakes bringing another swath of wintry precipitation. There will be strong, gusty winds across the northern Plains Thursday. There will be some moderate snow for the High Plains of Montana.
U.S. consumer price index out this morning… The year-over-year inflation rate in the U.S. likely held steady at 2.4% in February, unchanged from January and remaining at its lowest level since May of 2025. On a monthly basis, the CPI is estimated to have risen by 0.3%, slightly accelerating from up 0.2% in January. Gasoline prices probably picked up while prices for services, food, and housing are expected to have slowed, and used vehicle prices likely remained lower. Meanwhile, core inflation, which excludes food and energy, is projected to have remained unchanged at 2.5% year over year, the same as in January and near its lowest level since 2021. On a monthly basis, core CPI is expected to have increased by 0.2%, less than 0.3% in the previous month.
Trump says new U.S. oil refinery to be built… President Trump on Tuesday announced the construction of a refinery on the southern U.S. border backed by India’s Reliance Industries, operator of the world’s biggest refining complex. Trump made the announcement amid rising U.S. gasoline prices since the start of the U.S.-Israeli war with Iran. “For the first time in half a century, the United States will build a new refinery designed specifically for American shale oil,” said America First’s chairman and founder, John V. Calce and as reported by Reuters. Many U.S. Gulf Coast refineries are unable to process light, sweet crude oil from fracking shale fields because they were configured in the last 40 years to run lower-cost heavy, sour crude, which has higher density and contains more sulfur. India’s Reliance has signed “a binding 20-year offtake term sheet” with America First, meaning it will buy products the refinery produces. That will help cut India’s trade surplus with the U.S., which has been a Trump grievance, said the report.
Euro currency slides to three-month low… The euro today gave up early gains to drop below the $1.16 mark, hitting its weakest level since late November, as lingering uncertainty over the Middle East conflict and concerns about rising inflation across the eurozone weighed on the currency. Market expectations have shifted toward a more hawkish stance for the European Central Bank. Markets are increasingly pricing in at least one 25-basis-point rate hike this year, with some traders now considering the possibility of two increases. On Tuesday, ECB head Christine Lagarde reiterated that the ECB is committed to taking all necessary measures to keep inflation under control, despite the current surge in energy prices.
There is a reckoning occurring in the private credit market: Pimco… Christian Stracke, the head of Pimco, says there is a reckoning going on in the private credit market due to years of sloppy underwriting standards in lending, calling it a crisis of really bad underwriting. “The $1.8 trillion private credit market is witnessing an exodus of investors after high-profile corporate blowups led to concerns over loan quality and exposure to software firms,” said a Bloomberg report. Stracke says the squeeze will likely result in mid-single-digit defaults for a couple of years and investor returns dropping to as low as 6% from around 10%, but he doesn’t foresee a broader credit crisis. Cliffwater LLC just became the latest to come under pressure, with its $33 billion flagship private credit fund facing redemption requests. Meanwhile, the Financial Times reported that JPMorgan Chase & Co. has told private credit lenders that it marked down the value of some loans.
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Malaysian palm oil futures rebound… Malaysian palm oil futures hovered around MYR 4,450 per MT on Wednesday, recovering from the prior session’s sharp drop as a weaker ringgit and firmer Chicago soyoil prices supported sentiment. Bargain hunters also stepped in after prices hit a 4-1/2-month low. Export prospects further boosted sentiment, with shipments of palm oil products for March 1–10 estimated to have surged 37.9%–45.3% from the same period in February, reflecting strong Ramadan and Eid demand. Monthly data from the Malaysian Palm Oil Board showed February stocks fell 3.9% to a four-month low of 2.70 million MT, while crude palm oil output slumped 18.6% to 1.28 million MT. Separately, Indian buyers increased purchases amid concerns that soyoil and sunflower oil shipments could be disrupted by Middle East tensions. Gains were capped, however, as Indonesia, the world’s top producer, considered accelerating its B50 biodiesel mandate, which could tighten export supply.
Cattle futures see corrective bounces… April live cattle on Tuesday rose $2.225 to $232.375. March feeder cattle gained $2.70 to $353.35. The cattle futures markets saw corrective rebounds from big losses scored the previous two trading sessions. Improved risk appetite in the general marketplace amid falling crude oil prices also helped to spur some buying interest in cattle futures Tuesday. Gains were limited by lower cash cattle trading prices last week and worries about a potential JBS labor strike at a Greeley, Co. packing plant. USDA Monday reported last week’s average cash cattle trade at $239.94, which is down $2.77 from the week prior. Recent strong selling pressure in cattle futures produced chart damage to suggest at least near-term market tops are in place.
Lean hog futures also see corrective rebound… April lean hog futures on Tuesday rose $1.25 to $96.075. Hog futures saw a corrective bounce from Monday’s price pressure. Higher cattle futures prices Tuesday also spilled over into some buying interest in hog futures. Better risk appetite in the general marketplace amid the big drop in crude oil prices also helped to lift hog futures. The latest CME lean hog index is up 13 cents at $90.87. Today’s projected cash index price is up another 10 cents at $90.97. The national direct five-day rolling average cash hog price quote Tuesday was $67.61.