Good morning!
Grain markets await USDA’s data... Corn, soybeans and wheat traded on both sides of unchanged in a relatively light overnight session as traders await USDA’s reports later this morning. As of 6:30 a.m. CT, corn futures are trading mostly 2 to 3 cents lower, soybeans are 2 to 4 cents higher and wheat futures are fractionally to 2 cents lower. The U.S. dollar index is nearly 250 points lower and front-month crude oil futures are about 30 cents lower.
Big USDA report day... USDA will release its Acreage and Quarterly Grain Stocks Reports at 11:00 a.m. CT. Both reports have the ability to greatly impact markets – and this is historically the most volatile trading day of the year. The pre-report estimates for the Acreage Report suggest analysts on average expect relatively modest changes from March planting intentions. However, the ranges for expectations for corn and soybean plantings are wide, so there could be a surprise. Quarterly stocks have consistently been difficult for analysts to peg, especially corn. The range of estimates for June 1 corn stocks is 325 million bu., meaning someone will be surprised. Click here to view pre-report estimates.
Less rain, not as hot for most U.S. crop areas... Seasonal temps are likely across the Plains, Midwest, Delta and Southeast this week, while rainfall will be scattered. While temps won’t be as hot as recent weeks, some areas may see soil moisture decline if rains miss. The Pacific Northwest will be hot and dry, stressing crops in that region.
Canada tries to revive U.S. trade talks... Canada has announced it will rescind its Digital Services Tax (DST) in a significant concession after President Donald Trump announced last Friday he was terminating trade talks with Ottawa. Canadian Prime Minister Mark Carney and President Donald Trump have agreed that both sides will resume negotiations immediately, with the goal of reaching a final deal by July 21. The Canadian government’s move comes after months of U.S. pressure and repeated warnings the DST was a major sticking point in efforts to reset the cross-border trading relationship. Meanwhile, Canada Bill C-202 is now law after passing both the House of Commons and Senate and garnering a Royal Assent. The legislation prohibits Canadian trade negotiators from making commitments that would increase tariff rate quotas (TRQs) or reduce tariffs on supply-managed goods — namely dairy, poultry, and eggs — in future trade negotiations. However, its actual power to prevent the government from adjusting its negotiating stance is limited, sources signal.
India draws ‘red line’ on agriculture in U.S. trade talks... India’s agriculture and dairy are “very big red lines” in its ongoing trade negotiations with the U.S., Indian Finance Minister Nirmala Sitharaman told the Financial Express newspaper. In the trade talks, the U.S. is pushing for more Indian purchases of grains and ethanol, citing a significant trade imbalance, along with expanded market access for dairy, alcoholic beverages, automobiles, pharmaceuticals and medical devices. Meanwhile, India’s auto, pharmaceutical and small-scale firms are lobbying for a gradual opening of the protected sectors, fearing competition from U.S. firms.
The week ahead in Washington... The Senate will vote today on Trump’s One Big, Beautiful Bill, a multi-trillion-dollar spending and tax package at the core of his second-term agenda. If the measure clears the Senate, it will then require a second House vote before reaching Trump’s desk. The House is tentatively set to take up the measure on Tuesday, aiming to pass it before the July 4 deadline. However, the path is fraught with internal party drama and unresolved policy disputes that threaten the bill’s future. The other focus in Washington this week will be ongoing trade negotiations with key trading partners ahead of Trump’s July 9 deadline to enforce heavier tariffs. This week’s economic spotlight will be on the June jobs report on Thursday. Markets and government offices are closed on Friday for the July 4 holiday.
Senate modifies, strengthens 45Z credit... The Senate’s updated legislative text for the 45Z Clean Fuel Production Credit as part of the reconciliation package would extend for two years the clean fuel production credit, which applies to low-emission fuels made from renewable materials such as soybeans and corn. It’s currently slated to expire at the end of 2027 and would be extended through 2029. The House bill would extend it for four years (through the end of 2031). This will likely be a point of negotiation in the conference process. The Senate version upholds the House-passed requirement that would prohibit the credit for any feedstock produced outside the U.S., Mexico, or Canada, excluding imported feedstocks like Chinese used cooking oil (UCO) and South American tallow from receiving U.S. taxpayer support. The Senate bill would eliminate a larger credit for sustainable aviation fuel, largely bar negative emissions rates that lead to larger credits and modify emission rates to exclude indirect land use changes. The Small Agri-Biodiesel Producer credit is increased to 20 cents per gallon and the 45Z credit is now transferable, making it easier for smaller biofuel producers to benefit from the program.
Major changes to California’s updated LCFS... Beginning July 1, major updates to California’s Low Carbon Fuel Standard (LCFS) will take effect, marking a pivotal shift in the state’s climate and transportation policy. Approved by the California Air Resources Board (CARB), the amended LCFS accelerates emissions goals — targeting a 30% reduction in the carbon intensity of transportation fuels by 2030 and a 90% reduction by 2045. These amendments are intended to drive deeper greenhouse gas cuts, increase clean fuel investment and support California’s 2045 net-zero ambitions.
China’s manufacturing sector improves, but remains in contraction... China’s official manufacturing purchasing managers index (PMI) rose to 49.7 in June from 49.5 in May, but that marked the third straight month of contraction in the sector. Output rose the most in three months, while sales fell at their slowest rate during that span and new domestic orders showed expansion. But new export orders remained in contraction for the 14th consecutive month.
Cash cattle decline, expected to weaken further... Cash cattle traded generally $3.00 to $5.00 lower last week, though the official average price won’t be known until later this morning. Cash cattle prices are expected to weaken again this week, despite packer margins turning positive.
Cash hog index continues to firm but gains slowing... The CME lean hog index is up another 13 cents to $112.02 as of June 26, though that’s the smallest daily gain since May 23. July lean hog futures finished last Friday at a $1.23 premium to today’s quote, while August hogs held a $1.745 discount – suggesting traders anticipate the seasonal runup will end soon.
Weekend demand news... South Korea tendered to buy up to 60,000 MT of soymeal to be sourced from the U.S., South America or China. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 11:00 a.m. Acreage — NASS
- 11:00 a.m. Grain Stocks — NASS
- 11:00 a.m. Rice Stocks — NASS
- 1:00 p.m. Agricultural Trade Multipliers — ERS
- 2:00 p.m. Egg Products — NASS
- 3:00 p.m. Crop Progress — NASS