Good morning!
Corn and wheat weaker, beans firmer overnight... Corn and wheat futures pulled back from Friday’s gains during the overnight session, while surging soyoil futures supported soybeans. As of 6:30 a.m. CT, corn futures are trading 4 to 5 cents lower, soybeans are 1 to 3 cents higher and wheat futures are 3 to 6 cents lower. The U.S. dollar index is more than 200 points lower and front-month crude oil futures are about 70 cents lower as the Israel/Iran conflict hasn’t disrupted oil production and export facilities.
Generally favorable U.S. weather outlook... Most U.S. crop areas will receive rains over the next two weeks, maintaining mostly favorable conditions for crop development. World Weather Inc. says that does not mean soil moisture will be perfect for all production areas, with dryness a concern in part of the Northern Plains and some areas of the Corn Belt. The Southern Plains should see less frequent rainfall over the next two weeks, resulting in better wheat maturation and harvest conditions.
G7: High-stakes talks amid trade and global crises... The G7 summit hosted by Canada comes at a time of deep division over foreign policy and trade, especially with the U.S. under President Trump’s aggressive tariff policies. Canadian Prime Minister Mark Carney will hold a crucial one-on-one meeting this morning as the G7 Summit begins in Kananaskis, Alberta. Carney’s stated goals for the summit include advancing peace and security, fortifying supply chains for critical minerals, and supporting job growth. However, the agenda is likely to be overshadowed by contentious issues such as U.S. tariffs, the ongoing Middle East crisis after Israeli strikes on Iran, and the war in Ukraine. Carney has decided not to pursue a formal G7 communique, aiming instead to minimize discord and prioritize practical outcomes. The summit will also address global security and climate challenges, all while Trump pushes for Russia’s readmittance to the G7 — against opposition from other leaders.
Japan’s top trade negotiator holds crucial talks with United States... Japan’s chief trade negotiator, Ryosei Akazawa, held a 30-minute telephone conversation with U.S. Commerce Secretary Howard Lutnick on Saturday as part of a high-stakes push to resolve trade tensions with the United States. The timing of these talks is critical, as Japanese Prime Minister Shigeru Ishiba prepares to meet Trump on the sidelines of the G7 summit. To move talks forward, Japan has proposed increased imports of U.S. ag products, the removal of non-tariff barriers on American cars, and greater U.S./-Japan collaboration on rare earth magnets and semiconductor supply chains — key areas for both nations as they look to reduce reliance on China.
India, U.S. harden trade stance ahead of tariff deadline... Trade officials from India and the U.S. have toughened their positions as they attempt to finalize an interim trade agreement before higher U.S. tariffs on Indian goods are set to take effect July 9. Recent negotiations in New Delhi focused on several contentious issues, including U.S. demands for India to open its market to genetically modified crops, reduce tariffs and price controls on medical devices, and relax stringent data localization rules requiring companies to store data on Indian servers. India, meanwhile, is pressing the U.S. for exemptions from current tariffs on steel, automobiles, and pharmaceuticals, and has warned of retaliatory tariffs scheduled to begin July 9 if no deal is reached. Despite hardened stances, analysts believe a limited deal is still possible, but the risk of prolonged negotiations remains if neither side yields on key demands. Both countries are working toward a phased agreement with an initial pact targeted for July.
Vietnam and U.S. set for virtual trade talks... Vietnam and the U.S. have agreed to hold a virtual trade meeting in the coming days, seeking to resolve outstanding issues and lay the groundwork for direct negotiations between Lutnick and Vietnam’s Minister of Industry and Trade Nguyen Hong Dien. This follows a third round of technical-level negotiations in Washington, D.C., where “significant progress” was made, but key disputes remain. Vietnam recently agreed to significantly increase its purchases of U.S. ag products through a series of memorandums of understanding.
Israel, Iran tensions escalate... Israel and Iran continued to exchange missile strikes through the weekend in an escalation of tensions in the Middle East. Planned nuclear talks between the U.S. and Iran were canceled following the Israeli offensive, with Iran’s foreign minister declaring negotiations “unjustifiable” under fire. Trump said Sunday that while a peace deal between Israel and Iran remains possible, both sides may need to “fight it out” before reaching an agreement to end their escalating conflict. Trump confirmed the U.S. is not currently involved in Israel’s military operations, though he noted in an ABC News interview that it is “possible” the U.S. could get involved.
Record May NOPA soy crush expected... Analysts polled by Reuters expect the National Oilseed Processors Association (NOPA) to report soybean crush totaled 193.5 million bu. in May, which would be a record for the month. Crush is expected to rise 3.3 million bu. (1.7%) from April and 9.9 million bu. (5.4%) from year-ago. Soyoil stocks are expected to decline to 1.451 billion pounds.
India’s monsoon resumes... India’s monsoon has revived after stalling for more than two weeks. Rains are set to cover central parts of the country this week, bringing relief from the recent heatwave in the grain-growing northern plains, two senior weather officials said. Monsoon rains on Monday covered almost entire western state of Maharashtra and entered into neighboring Gujarat and central state of Madhya Pradesh, the official said. Heavy rainfall is likely over west coast, central and some parts of north India in next 10 days, which will significantly bring down temperatures, another weather official said. Rains are expected to be above average during the second half of this month.
Trump administration orders ICE to pause most raids on farms... In a significant and policy reversal, President Trump has officially directed Immigration and Customs Enforcement (ICE) to pause most worksite raids and arrests targeting undocumented workers in the agricultural sector, as well as in hotels and restaurants. This decision was communicated through an internal ICE directive and confirmed by multiple administration officials and the Department of Homeland Security. The directive clarifies that while ICE may continue investigations into human trafficking, money laundering and drug smuggling within these sectors, agents are not to detain “non-criminal collaterals,” meaning undocumented individuals who have not been charged with additional crimes. Despite the pause, ICE enforcement overall remains aggressive, with daily arrest rates having more than doubled compared to early in Trump’s presidency. The administration has signaled that this is a temporary measure and not a fundamental shift in its hardline immigration stance, with officials vowing continued enforcement against those deemed threats to public safety.
The week ahead in Washington... The House is out this week. The Senate is working through Wednesday. Government offices and markets are closed on Thursday for Juneteenth. The economic centerpiece of the week is the Fed’s two-day monetary policy meeting, which concludes on Wednesday. The Fed is widely expected to keep interest rates unchanged at a range of 4.25% to 4.50%. USDA will release its Cattle on Feed Report Friday afternoon.
China’s industrial production slows, retail sales perk up... China’s industrial production rose 5.8% from year-ago in May, the slowest increase since November 2024, as U.S. tariff pressures weighed on overseas demand and domestic output. China’s retail sales increased 6.4% annually in May, the biggest growth since December 2023.
China’s housing market slump now covers nearly two years... China’s new home prices in 70 cities dropped 3.5% from year-ago in May, marking the 23rd straight month of contraction in the housing sector. However, this was the smallest decline since April 2024, reflecting continued efforts by Beijing to cushion the impact of the prolonged property downturn.
Cattle futures look toppy... Cattle futures faced heavy corrective selling on Friday, producing topping action on the daily charts and potentially setting up further long liquidation. The market has been in this situation many times on the extended bull run only to see buyers show up to buy to break. Price action early this week will be key in determining if the price break is seen as another buying opportunity or the start of market top.
Cash hog fundamentals surging... The CME lean hog index is up another $1.05 to $102.81 as of June 12. Pork cutout jumped $3.56 to $118.06 on Friday, led by hams and bellies. Surging cash fundamentals should encourage traders to at least maintain sizable premiums in summer-month hog futures. July lean hog futures closed last Friday $6.665 above today’s cash index, while August hogs at a $7.315 premium.
Weekend demand news... Algeria tendered to buy a nominal 50,000 MT of optional origin milling wheat.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 11:00 a.m. Monthly Soybean Crush — NOPA
- 1:00 p.m. Dairy Monthly Tables — ERS
- 2:00 p.m. Cotton and Wool Outlook: June 2025 — ERS
- 2:00 p.m. Feed Grains Database — ERS
- 2:00 p.m. Feed Outlook: June 2025 — ERS
- 2:00 p.m. Oil Crops Outlook: June 2025 — ERS
- 2:00 p.m. Rice Outlook: June 2025 — ERS
- 2:00 p.m. Wheat Outlook: June 2025 — ERS
- 3:00 p.m. Crop Progress — NASS