Good morning!
Mostly weaker tone in grains overnight... Corn, soybeans and wheat mostly favored the downside during the overnight session as traders weighed heightened geopolitical tensions in the Middle East against generally favorable weather conditions. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents lower, soybeans and winter wheat markets are fractionally to 2 cents lower and spring wheat is unchanged to a penny higher. The U.S. dollar index is nearly 650 points higher and front-month crude oil futures are around 70 cents higher.
Escalating geopolitical tensions in Middle East... The U.S. military launched air strikes on Iran’s nuclear facilities at Fordow, Natanz and Isfahan early Sunday morning local time, with the U.S. intervening directly to support Israel’s efforts to dismantle Iran’s nuclear program. In response, Iran’s parliament has voted to close the Strait of Hormuz — the world’s most important oil shipping lane and a key waterway for global fertilizer shipments. The move awaits final approval from Iran’s Supreme Council. Israel carried out fresh strikes on Iran on Monday including on the capital of Tehran and Iran’s nuclear facility of Fordow which was also a target of the U.S. attack. Iran called President Donald Trump a “gambler” for joining Israel’s military campaign. China meanwhile said the U.S. attack had damaged Washington’s credibility and warned the situation “may go out of control.”
Extreme heat to abate across central United States... The extreme heat and wind across the Plains and Midwest during the weekend will abate, with seasonal temps and multiple rain chances likely this week. The high pressure ridge is expected to build over the Canadian Prairies, Rocky Mountain region and Northern Plains. The ridge is expected to weaken in early July, allowing some rain and thunderstorms into Canada, the Northern Plains and Midwest.
Trump administration suspends Biden-era farmworker rule for H-2A visas... The Trump administration announced Friday it is suspending enforcement of a 2024 rule introduced under former President Joe Biden that offered new workplace organizing protections to foreign farmworkers in the U.S. on H-2A visas. The Department of Labor explained the rule had already been effectively halted due to multiple federal court injunctions, which created “significant legal uncertainty, inconsistency and operational challenges” for employers. In a statement, the department said, “The decision provides much-needed clarity for American farmers navigating the H-2A program, while also aligning with President Trump’s ongoing commitment to strictly enforcing U.S. immigration laws.” The suspension was formalized through a field assistance bulletin, clarifying that the Labor Department will not enforce the 2024 final rule, effective immediately.
GOP food stamp reform blocked by Senate Byrd Rule... The Senate parliamentarian struck down a major Supplemental Nutrition Assistance Program (SNAP) provision from the Senate Ag Committee’s reconciliation text, dealing a blow to efforts to reform and reduce federal spending on food assistance. The rejected provision would have shifted a greater share of SNAP costs to the states, forming a significant part of the committee’s estimated $211 billion in proposed budget cuts. Other provisions rejected include language to bar immigrants who are not citizens or lawful permanent residents from receiving food assistance under SNAP and a section to extend the suspension of permanent price support authority, something that traditionally has been part of the farm bill. Senate Republican leaders are now racing to resolve major policy disputes and procedural hurdles to advance their sweeping tax and spending-cut reconciliation bill to the floor this week — aiming to deliver it to President Donald Trump’s desk by July 4.
The week ahead in Washington... The Senate will focus on budget reconciliation with fiscal year (FY) 2026 spending also on the agenda. The House Appropriations Committee is nearing completion of its FY 2026 spending bill for USDA, Food and Drug Administration (FDA), and Commodity Futures Trading Commission (CFTC), with final deliberations set for Monday evening. A major flashpoint has been the fate of the Food for Peace international food aid program. Trump administration actions on trade and Iran are other key items of congressional attention. The Supreme Court is set to weigh a landmark case that will determine whether federal pesticide labeling laws under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) pre-empt stricter state-level requirements — an issue at the heart of ongoing legal and regulatory battles nationwide. Fed Chair Jerome Powell heads to Capitol Hill for two days of testimony on Tuesday and Wednesday, where he is expected to reiterate the central bank’s patient, data-dependent approach. Economic data includes Wednesday’s final estimate of first quarter GDP and Friday’s release of the May core personal consumption expenditures price index — the Fed’s preferred inflation measure. Key agricultural data will be Wednesday’s updated food price outlook and Cold Storage Report from USDA, along with Thursday’s Hogs & Pigs Report.
Euro zone growth stalls in June... HCOB’s preliminary composite euro zone purchasing managers index compiled by S&P Global remained unchanged from the previous month at 50.2 in June. This reflected the sixth consecutive month above the expansionary threshold but continued to point to a muted pace of growth. The gauge for activity in the services sector pointed to modest improvement (50.0 vs. 49.7 in May), while manufacturing was unchanged (49.4).
USDA develops potential plan to vaccinate poultry for HPAI... USDA is reportedly actively developing a vaccination plan for U.S. poultry, a shift from its earlier stance. According to Reuters, the agency is considering the trade impacts and working with industry partners to ensure any vaccine rollout does not undermine U.S. poultry exports. Up to $100 million has been pledged for vaccine research and alternative therapies. The shift comes in response to continued outbreaks, severe supply disruptions, and ongoing pressure from egg and turkey producers for additional disease control tools.
WOAH considers Brazil HPAI outbreak on commercial farm ‘resolved’... The World Organization for Animal Health (WOAH) considers an HPAI outbreak on a commercial farm in Brazil as “resolved,” a page detailing the case on WOAH’s website showed on Friday. Earlier last week, Brazil declared itself free of HPAI in commercial flocks after observing a 28-day period without any new commercial farm outbreaks.
Neutral Cattle on Feed Report... USDA estimated there were 11.442 million head of cattle in large feedlots (1,000-plus head) as of June 1, down 141,000 head (1.2%) from year-ago. May placements declined 7.8% and marketings fell 10.1% from year-ago levels, with both categories slightly lower than the average pre-report estimates. The data is neutral compared to the pre-report expectations, but continues to paint an overall bullish supply picture. Click here for more details.
Cash hog fundamentals continue to strengthen... The CME lean hog index rose to $108.08 as of June 19. Pork cutout jumped to $122.14 on Friday. Both are at their highest levels since August 2022.
Weekend demand news... Oman purchased 110,000 MT of Russian wheat.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 2:00 p.m. Chickens and Eggs — NASS
- 3:00 p.m. Crop Progress — NASS