Good morning!
Soyoil futures pull back overnight... After two days of limit-up trade, soyoil futures pulled back overnight, while corn, soybeans and spring pivoted around unchanged and the winter wheat markets mildly favored the upside. As of 6:30 a.m. CT, corn futures are trading fractionally lower to a penny higher, soybeans are mostly a penny higher, winter wheat markets are 1 to 3 cents lower and spring wheat is mostly 2 cents lower. The U.S. dollar index is modestly firmer, while front-month crude oil futures are around $1.50 higher.
Trump wants ‘real end’ to Israel/Iran conflict... President Donald Trump said he wanted a “a real end, not a ceasefire, an end” to the conflict between Israel and Iran and indicated he may send senior U.S. officials to meet with the Islamic Republic as the Israel/Iran air war raged for a fifth straight day. Trump predicted Israel would not ease its attacks on Iran. Washington has said Trump was still aiming for a nuclear deal with Iran, even as the military confrontation unfolds. World leaders meeting at the Group of Seven summit called for a de-escalation of the worst-ever conflict between the regional foes, saying Iran was a source of instability and must never have a nuclear weapon while affirming Israel’s right to defend itself. Trump, who left the summit early due to the Middle East situation, said his departure had “nothing to do with” working on a deal between Israel and Iran.
Trump signs executive order to implement U.S./UK trade deal... Trump signed an executive order to give British carmakers an annual quota of 100,000 cars that can be sent to the U.S. at a 10% tariff rate. The order also eliminates tariffs on the UK aerospace industry, including parts and planes. The deal expands U.S. market access for agricultural products, including beef and ethanol, while maintaining UK food standards. The UK will remove its 20% retaliatory tariff on U.S. beef and set quotas for tariff-free imports of U.S. beef and ethanol. The issue of steel and aluminum remains unresolved for now. The U.S. intends to impose a quota on steel and aluminum imports from the UK that would be exempt from 25% tariffs, but it is conditioned upon Britain’s demonstrating security on steel supply chains and production facilities, according to an executive order released by the White House. The quota level will be set by Commerce Secretary Howard Lutnick, the White House said.
Trump, Carney optimistic on U.S./Canada trade deal... Canadian Prime Minister Mark Carney said the U.S. and Canada are focused on global challenges and immediate trade pressures, including priorities for building a new economic and security relationship between the two countries. Further U.S./Canada talks are scheduled for later this week, after the G7 confab is over. Trump voiced confidence that a trade deal with Canada is “achievable” in the coming weeks, divergent approaches. He prefers tariffs for their “simplicity,” while Carney advocates a more complex but “very good” alternative. If a deal cannot be reached, Carney has hinted at potential retaliation, noting his restraint in not increasing counter-tariffs after Trump raised U.S. steel and aluminum duties to 50%.
Trump, Ishiba fail to reach trade deal at G7 summit... Trump and Japanese Prime Minister Shigeru Ishiba failed to clinch a trade agreement on the sidelines of the Group of Seven (G7) summit in Kananaskis, Alberta, an outcome that leaves Japan exposed to mounting U.S. tariffs and economic uncertainty. Despite weeks of intensive negotiations — including multiple phone calls between Trump and Ishiba, and several trips to Washington by Japan’s chief negotiator Ryosei Akazawa — the two leaders remain at odds, with key sticking points over auto and steel tariffs unresolved. With no official plans for another Trump/Ishiba meeting before the July 9 tariff deadline, talks will continue at the ministerial level.
Corn, spring wheat CCI ratings continue to improve... USDA rated the corn crop as 72% “good” to “excellent” and 5% “poor” to “very poor,” the soybean crop as 66% “good” to “excellent,” and 7% “poor” to “very poor” and the spring wheat crop as 57% “good” to “excellent” and 9% “poor” to “very poor.” On the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop inched up 0.6 point to 378.9, the soybean crop slipped 1.5 points to 363.9 and the spring wheat crop improved 4.3 points to 360.3. All three crops continue to be rated below year-ago, especially spring wheat despite a stronger rating in top producer North Dakota. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of June 15:
- Corn: 72% good/excellent (71% last week); 94% emerged (94% average).
- Soybeans: 66% good/excellent (68% last week); 93% planted (94% average); 84% emerged (83% average).
- Spring wheat: 57% good/excellent (53% last week); 89% emerged (92% average); 4% headed (6% average).
- Winter wheat: 52% good/excellent (54% last week); 93% headed (92% average); 10% harvested (16% average).
- Cotton: 48% good/excellent (49% last week); 85% planted (90% average); 19% squaring (17% average); 3% setting bolls (3% average).
Cordonnier raises Argentine soybean crop estimate... Early-harvested soybeans in Argentina performed well, while yields in later-harvested areas are surpassing expectations, compensating for losses caused by flooding in northern Buenos Aires. As a result, South American crop consultant Dr. Michael Cordonnier raised his Argentine soybean production forecast 1 MMT to 49.5 MMT. Cordonnier left his Argentine corn crop estimate at 50 MMT. He also left his Brazilian corn production forecast at 130 MMT, though he has a slightly higher bias as rains that have slowed safrinha harvest will benefit yields.
U.S. to object to SAF recommendation at UN aviation council... The U.S. is expected to object this month to a recommendation at the UN aviation agency council that Washington says unfairly favors Brazilian corn farmers at the expense of U.S. producers in development of sustainable aviation fuel (SAF), two sources familiar with the matter told Reuters. The U.S. State Department raised objections in March to a recommendation from an International Civil Aviation Organization (ICAO) technical panel, which has proposed criteria for SAF. The U.S. argued the recommendation unfairly helps Brazil over the rest of the world as it would award a lower carbon score to multicropping, a common practice in the country nation. The recommendation is coming to ICAO’s 36-member council for review ahead of the global agency’s triennial assembly this fall. ICAO cannot impose rules on member states, but countries that approve the agency’s standards and guidance usually abide by them.
Senate Republicans unveil major tax and Medicaid overhaul... Senate Republicans’ tax proposal, spearheaded by Senate Finance Committee Chairman Mike Crapo (R-Idaho), aims to make the 2017 corporate tax cuts permanent and introduces sweeping reductions to Medicaid. The Senate bill like the House measure would extend the 45Z credit through 2031 and exclude any emissions associated with indirect land use change from being used in calculating eligibility for the credit. Of note: The Senate version does not include language from the House bill terminating transferability after 2027. Regarding domestically produced feedstocks, the House bill would prevent the credit from applying to fuels made with feedstocks outside the U.S., Canada or Mexico. The Senate measure proposes cutting the value of the credit for fuels made with feedstocks grown outside the U.S. by 20%. Also, the credit value for sustainable aviation fuel (SAF) would drop from $1.75 to $1.00, equalizing the value for all eligible fuel types. The Senate version would extend the credit value of 40B for SAF to apply to fuels sold between Dec. 31, 2024, and the end of September.
Historic run for cash cattle continues... Cash cattle averaged a record $238.68 last week, up $2.06 from the previous week. This marked the ninth straight week of gains in the cash market and the eighth straight record. Cattle futures sharply rebounded on Monday given their sharp discounts to the cash market. Meanwhile, wholesale beef prices are picking up steam with Choice up $4.23 to $382.11 and Select up $3.97 to $367.47 on Monday as packers work to improve still highly negative margins.
Pork cutout highest since August 2022... Pork cutout firmed another $1.42 to $119.48 on Monday, the highest since mid-August 2022, fueled by bellies and butts. The CME lean hog index firmed another 89 cents to $103.70, extending its seasonal rise to the highest since August 2023.
Overnight demand news... Exporters reported no tenders or sales.
Today’s reports
- 1:00 p.m. Fruit and Tree Nuts Data — ERS
- 1:00 p.m. Vegetables and Pulses Data — ERS