Good morning!
Grains relatively quiet overnight... Corn, soybeans and wheat traded in relatively tight ranges overnight as the broader marketplace monitors escalating tensions in the Middle East and awaits Fed commentary and other macroeconomic developments. As of 6:30 a.m. CT, corn futures are trading unchanged to fractionally higher, soybeans are 1 to 2 cents lower and wheat futures are 1 to 3 cents higher. The U.S. dollar index is more than 100 points lower and front-month crude oil futures are modestly firmer.
Iran rejects Trump’s call for unconditional surrender... Iran’s Supreme Leader Ayatollah Ali Khamenei said in a statement read on state media on Wednesday his country will not accept President Donald Trump’s call for an unconditional surrender in the conflict with Israel. He warned that any U.S. strike on Iran will have “serious irreparable consequences.” Trump was reportedly considering options that include joining Israel in attacking Iranian nuclear sites.
Insurance premiums soar for ships in Strait of Hormuz amid rising regional risks... Shipping insurance premiums for vessels transiting the Strait of Hormuz have surged as the region faces mounting risks, including electronic interference, Houthi attacks and the potential for further escalation in the Israel/Iran conflict. The strategic waterway, which handles about 20% of global petroleum liquids, has become a focal point for maritime security concerns, with shipowners and insurers closely monitoring developments. While insurance rates for ships passing through the Strait of Hormuz have not yet reached prohibitive levels, the situation remains highly volatile. Analysts warn that any further escalation in the regional conflict could trigger rapid and substantial increases in both insurance premiums and freight rates, with far-reaching implications for global energy and trade flows.
Attention on Fed’s comments, ‘dot plot’ economic projections... The Fed is widely expected to keep interest rates unchanged following the conclusion of the two-day monetary policy meeting. Focus will be on the post-meeting statement, updated economic projections from Fed officials and Chair Jerome Powell’s comments from his press conference, as policymakers assess the cooling economy, risk of higher inflation from U.S. tariffs and escalating tensions in the Middle East.
Trump expands Section 232 tariffs to consumer goods, escalating trade tensions... The Trump administration is moving swiftly to broaden Section 232 tariffs — originally imposed on steel, aluminum, and autos — to cover a far wider range of consumer goods, intensifying trade tensions and raising the stakes for importers and global supply chains. The Commerce Department is expected within weeks to announce the results of seven new national security investigations into sectors such as semiconductors, pharmaceuticals, and critical minerals. Trump has already expanded the steel and aluminum tariffs to include products like dishwashers, dryers, and washing machines, with new duties of up to 50%. The administration claims these goods are “vital to national security.”
SCOTUS asked to rule on legality of Trump’s ‘Liberation Day’ tariffs... Small businesses formally asked the Supreme Court to determine whether President Donald Trump’s “Liberation Day” tariffs are lawful — a move that could yield a final ruling by the end of the year and represents the first time these high-profile tariffs have reached the nation’s highest court, Forbes reports. Two companies, Learning Resources Inc. and hand2mind Inc., filed a petition on Tuesday urging the Supreme Court to bypass the traditional appeals process and directly address the legality of Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA), which served as the legal basis for the measures. A federal district judge previously ruled in the businesses’ favor, finding the tariffs violated IEEPA, but that decision is currently on hold while an appeals court reviews the case. The plaintiffs argue the Supreme Court must intervene swiftly to resolve the “crippling uncertainty” the tariffs have caused for businesses across the country, asking for oral arguments as early as this October. The Supreme Court has yet to announce whether it will take up the case or set a timeline.
Russia’s Krasnodar region declares state of emergency in eight districts... Krasnodar, one of Russia’s largest grain-producing regions, declared a state of emergency in eight drought-hit municipalities. Earlier in June, Rostov, another large grain-producing region announced a state of emergency in 10 districts. Despite the drought issues, Russian officials expect the country to produce 135 MMT of grain, up from 130 MMT in 2024.
France inches up wheat export forecast... France’s ag ministry raised its forecast for 2024-25 wheat exports outside the EU by 50,000 MT to 3.25 MMT, 68% below last year. The export forecast within the bloc was increased 90,000 MT to 6.64 MMT, up 5.6% from last year.
China wants to expand digital yuan, multi-polar currency system... The head of China’s central bank pledged to expand the international use of the digital yuan and called for the development of a multi-polar global currency system, lessening reliance on the U.S. dollar. China will establish an international operation center for e-CNY in Shanghai, People’s Bank of China Governor Pan Gongsheng said. At the same time, China is accelerating efforts to develop financial systems independent of Western institutions. “Developing a multi-polar international monetary system will help strengthen policy constraints on sovereign currency countries, enhance the resilience of the system, and better safeguard global financial stability,” Pan said.
USDA to reopen Texas facility in renewed fight against screwworm... USDA Secretary Brooke Rollins is set to announce the reopening of the Moore Air Base facility near Edinburg, Texas, as part of an intensified campaign to eradicate the New World screwworm (NWS). The move comes amid mounting concerns over recent outbreaks in Mexico and growing risks to U.S. livestock and wildlife. USDA recently allocated $21 million to retrofit a fruit fly facility in Mexico for additional NWS control. However, the pressure for a domestic solution has intensified. Nearly 80 lawmakers led by House Ag Committee Chair Glenn “GT” Thompson (R-Pa.) sent a bipartisan letter on Tuesday to Rollins urging immediate action and promising congressional support for the significant funding required.
China’s pork imports rise in May... China imported 90,000 MT of pork in May, up 12.5% from April and 11.7% more than last year. Through the first five months of the year, China’s pork imports totaled 450,000 MT, 5.8% above the same period last year.
Cattle futures face heavy liquidation... Profit-taking and long liquidation weighed heavily on cattle futures on Tuesday, producing stronger signs of at least a short-term top. That opens the door to followthrough selling pressure today. As we mentioned previously, key will be whether buyers continue to show up under the market given huge discounts to the cash market.
Cash hog fundamentals continue to strengthen... The CME lean hog index is up another $1.25 to $104.95 as of June 14, marking the largest daily gain in the string of seasonal strength. Pork cutout firmed 41 cents to $119.89 on Tuesday, as strong gains in butts ribs and hams more than offset a $3.56 decline in primal bellies.
Overnight demand news... Algeria tendered to buy 240,000 MT of optional origin corn. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat.
No Pro Farmer reports on Thursday... Markets and government offices are closed Thursday for the Juneteenth federal holiday. As a result, there will be no Pro Farmer updates. Grain markets reopen with the overnight session at 7:00 p.m. CT on Thursday, June 19. Livestock markets resume trading at 8:30 a.m. CT, on Friday, June 20.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 1:00 p.m. FOMC Meeting Concludes — FED
- 1:00 p.m. Cost-of-Production Forecast — ERS
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: June 2025 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: June 2025 — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. Livestock Slaughter — NASS
- 2:00 p.m. Potato Stocks — NASS