Good morning!
Grains mostly lower overnight... Corn, soybean and winter wheat markets faced followthrough selling overnight, while spring wheat futures have firmed after earlier weakness. As of 6:30 a.m. CT, corn futures are trading mostly 3 cents lower, soybeans are 3 to 5 cents lower, winter wheat markets are 1 to 2 cents lower and spring wheat is around a penny higher. The U.S. dollar index is around 225 points higher and front-month crude oil futures are about 35 cents higher.
Israel/Iran ceasefire holding but Persian Gulf shipping remains on edge... The fragile ceasefire between Israel and Iran brokered by President Donald Trump appeared to be holding, with both countries pausing direct hostilities after a 12-day conflict. Israel lifted wartime restrictions and reopened airports, while Iran indicated it would continue to respect the truce if Israel did the same. Despite the tentative calm, maritime security in the Persian Gulf — especially in the Strait of Hormuz — remains precarious. A joint UK/U.S. naval task force and the Joint Maritime Information Center (JMIC) have warned shipping companies to remain on high alert, citing an “elevated” threat level for vessels in the region. Shipping companies are bracing for continued disruption in one of the world’s most vital trade corridors.
Trump administration disputes nuclear report... The Trump administration is pushing back against a leaked intelligence report that claims recent U.S. strikes on Iran’s nuclear facilities only delayed Tehran’s nuclear ambitions by a few months. Defense Secretary Pete Hegseth, speaking at the NATO summit in The Hague, confirmed the FBI has launched an investigation into the leak. President Trump, meanwhile, insisted on social media that the targeted sites were “COMPLETELY DESTROYED!” and criticized media coverage of the report.
U.S. trade deals on hold pending GOP tax-and-spending bill... The Trump administration is delaying the announcement of new trade deals until Congress passes the Republicans’ massive tax and spending bill, according to National Economic Council Director Kevin Hassett. The so-called “megabill,” currently the subject of heated negotiations, includes major tax cuts and spending provisions and is expected to be finalized around the July 4th congressional recess. Hassett said the administration is “very close” to finalizing trade arrangements with several countries but is deliberately holding off until the tax bill is enacted. Treasury Secretary Scott Bessent echoed the strategy, arguing that a stable domestic tax environment will strengthen the U.S. position in global trade negotiations and provide greater certainty to American businesses. Passage of the bill is seen as a prerequisite for unlocking trade agreements with nations including India, Japan, and Vietnam, and for addressing issues such as digital taxes on U.S. businesses abroad. Once the bill passes, officials say a wave of trade deal announcements is expected, potentially reshaping the U.S. economic landscape and its global alliances.
China signals willingness to cooperate with U.S. on fentanyl... China announced a major step toward addressing U.S. concerns about the fentanyl crisis by imposing stricter controls on two key precursor chemicals used in illicit fentanyl production. Effective July 20, 4-piperidone and 1-boc-4-piperidone will be classified as Class 2 chemicals, subjecting them to tighter government supervision. The move, unveiled jointly by six Chinese government departments, is widely seen as a gesture of goodwill toward the U.S. and a potential effort to ease ongoing trade and law enforcement tensions. This marks a pragmatic turn in China’s approach — addressing a central U.S. priority without compromising its broader strategic interests — and could open the door to improved bilateral relations and practical gains in fighting the global opioid crisis.
SovEcon raises Russian wheat crop forecast... Black Sea consulting firm SovEcon raised its forecast for Russia’s wheat crop by 200,000 MT to 83 MMT, citing improved crop conditions in areas of central Russia. The improved forecast for the Central region was partially offset by a downward forecast for Siberia and the Urals, where a sharp reduction in spring wheat areas is expected. SovEcon raised its Russian grain production forecast by 1.9 MMT to 129.5 MMT.
Ukraine drone attacks damage grain storage in Rostov, Russia... Ukrainian drone attacks overnight damaged a grain facility and other structures in Russia’s southern region of Rostov on the Ukrainian border, Russian authorities said. In the town of Azov, situated on the Don River about 16 km (10 miles) from the Sea of Azov, the attack damaged a grain storage warehouse, though no further details were provided.
More countries lift HPAI-related trade restrictions on Brazil poultry... Brazil’s ag ministry said 17 countries, including Japan, have removed trade restrictions related to the highly pathogenic avian influenza (HPAI) outbreak in May. Japan was the third largest importer of Brazilian chicken meat in 2024.
Cold Storage Report out this afternoon... USDA will detail frozen meat stocks at the end of May. The five-year average is a 28.7-million-lb. decline in beef stocks and a 28.4-million-lb. drop in pork stocks during the month.
Beef demand stays strong... Despite the second highest wholesale beef prices behind the Covid-induced spike in 2020, packers continue to move a lot of product. Last week’s total volume reached 7,354 loads, with formula sales marking a new high for the year. This was likely the final push by retailers for last-minute needs ahead of the Fourth of July and fill-in supplies for after the holiday, which typically starts a slower period for beef demand.
Cash hog index remains on the rise... The CME lean hog index is up another 89 cents to $110.44, extending the seasonal price rise. Since April, the index has surged more than $25.00 to the highest level since August 2022, though it remains nearly $12.00 below that year’s peak.
Overnight demand news... South Korea purchased 266,000 MT of corn from unspecified origins.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 10:00 a.m. Food Price Outlook — ERS
- 2:00 p.m. Coffee: World Markets and Trade — FAS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Cold Storage — NASS
- 2:00 p.m. Poultry Slaughter — NASS