Good morning!
Grain futures prices lower overnight… As of 6:00 a.m. CST, July corn was down 1 1/2 cents. July soybeans were down 4 1/2 cents. July soybean meal was down $2.10. July bean oil was 28 points higher. July SRW wheat was down 2 3/4 cents and July HRW was 5 1/2 cents lower. Unless prices turn around in the day session, all these markets except bean oil are headed for technically bearish weekly low closes. The past two days have seen a lot of air come out of the grain markets bulls’ balloon. Profit taking from the shorter-term futures traders has been featured, as well as weak long liquidation from those traders who had just recently climbed on board the bullish train. The key outside markets today see the U.S. dollar index solidly higher, while Nymex WTI crude oil prices are up and trading around $105.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.5%.
40% of U.S. farmers undecided heading into mid-term elections: Farm Journal poll… Frustrations over the skyrocketing costs of doing business, trade policies and lack of E15 expansion have put U.S. producers’ votes – many in competitive political battleground states – in play, according to an exclusive poll of Farm Journal readers. The poll, which surveyed producers through April and was commissioned by the agriculture-focused public affairs firm Amato Advisors, shows the following: Four in 10 producers are currently undecided or considering voting for a different party. Half of those surveyed report fair to poor finances. Twenty-five percent fear they will restructure or leave farming or ranching entirely. Almost 90% negatively view tariffs, with rising input costs also a top challenge. Year-round E15 approval is a decisive voting factor for nearly half of all producers. Read the full story here.
USTR Greer says China to commit to billion in U.S. ag purchases… U.S. Trade Representative Jamieson Greer says he anticipates that China will commit to billions in American agricultural purchases, as Presidents Trump and Xi Jinping just completed their summit in Beijing. “We expect to also see an agreement for double-digit billion purchases of ags over the next three years, per year, coming out of this visit, and that’s more general, that’s aggregate, that’s not just soybeans, that’s everything else,” Greer told Bloomberg Television in an interview on Friday. Greer accompanied Trump on the trip, the first by an American president to China in nearly a decade and a crucial opportunity to help ease trade tensions between the world’s two largest economies. U.S. Treasury Secretary Scott Bessent said Thursday on CNBC that one idea is for each country to cut tariffs on about $30 billion worth of trade “for non-critical areas and areas that we’re not trying to reshore.” Xi Jinping hailed the results of his meetings with President Trump and touted an agreement on a new relationship for their countries. The two countries reached an “important consensus” on maintaining stable economic and trade relations while expanding cooperation in various fields.
Latest on U.S.-Iran war…
--Trump projects confidence on U.S.-Iran war while China stays cautious
--UAE tried in vain to get Saudis to coordinate on Iran response
--World equities slide as investors grow increasingly concerned about prolonged war
President Trump said the U.S. and China share common goals for ending the Iran war, including that the Islamic Republic shouldn’t possess a nuclear weapon and that the Strait of Hormuz should reopen. The U.S. wants China’s help pressuring Tehran into negotiations to end the conflict, but Beijing has remained cautious, urging further diplomacy and saying disputes over Tehran’s nuclear program should be resolved through dialog. Reopening the Strait of Hormuz has been a key objective for the U.S. in diplomatic efforts, but Iran insists it keep an oversight of traffic through the maritime chokepoint as part of any peace agreement.
Hot, stormy weather in the Midwest, Plains states today into the weekend… The National Weather Service today said a nearly stationary front extending across the midsection of the country will be the focus for rounds of strong to severe thunderstorms through the next couple of days. There will be enhanced thunderstorm development in the vicinity of Iowa by late afternoon into this evening. Thunderstorms could also become severe farther southwest across the central Plains to the Oklahoma and Texas Panhandles later today and tonight.Temperatures across the central to southern Plains soaring well into the 90s to the 100s will add fuel to the thunderstorms.Some of these high temperatures could break daily records for some locations.
Kansas wheat crop in rough shape: Wheat Quality Council tour… The final estimate from the Wheat Quality Council’s annual crop tour put the average yield for Kansas at 38.9 bushels per acre after 394 field stops, according to Bloomberg. That’s well below last year’s forecast of 53 bushels per acre, with a survey of the tour’s participants pegged Kansas wheat production at 218 million bushels, the second-lowest going back to 1972. That’s a drop on a scale that affirms the 25% drop in winter wheat production forecast by USDA in its Tuesday Crop Production Report. “It’s a nightmare out there,” Vance Ehmke, who grows wheat for seed, told Bloomberg. “You don’t know whether you’re coming or going with this weather.”
Mexico suspends some U.S. pork product imports… Mexico, the largest export market for U.S. pork, suspended imports of U.S. breeding pigs, semen, viscera and pork offal products after U.S. authorities detected pseudorabies virus antibodies in some swine, Reuters said Thursday, citing the head of Mexican pork producers’ group Opormex. The suspension affects about 10% of Mexico’s total pork-product imports from the U.S. but does not include pork meat because it does not pose a transmission risk, Opormex’s Ivan Espinosa told the newswire in an interview. USDA on April 30 said that routine testing detected pseudorabies virus antibodies in five boars at a commercial facility in Iowa, which came from an outdoor facility in Texas. It marked the first known U.S. case of pseudorabies, a contagious disease, in commercial swine since 2004.
Global bond markets sell off amid problematic inflation concerns… Traders and investors are shedding government bonds around the world, “propelling borrowing costs to multi-year highs from Japan to the U.S. amid intensifying fears that war-driven inflation will force central banks to pursue higher interest rates,” reported Bloomberg today. In the U.S., the yield on two-year Treasuries climbed to 4.06%, a level not seen since March 2025. Japan’s 30-year yield hit 4% for the first time since 1999. A political crisis in the U.K. lifted 30-year gilt yields to a 28-year high. “The selloff deepened heading into the weekend as Brent crude’s climb past $109 a barrel, compounding worries sparked by back-to-back U.S. inflation reports and the ongoing U.S. and Iran conflict. Along with wagers on more Federal Reserve rate hikes, policy tightening bets are also gaining traction in Japan, where producer prices jumped by the most since 2014. “The move higher in global bond yields is a little unsettling,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities in Singapore. “An extended and persistently high oil price could be the nail in the coffin for bonds.” Inflation is the overwhelming risk facing the economy, Federal Reserve Governor Michael Barr said on Thursday.
Indian monsoons forecast to arrive early… India expects its monsoon rains to arrive early this year, offering some relief for farmers who rely on the rains for timely sowing of crops like rice and soybeans. “The June-September rainy period will begin on May 26 in the southern state of Kerala, according to a statement from the India Meteorological Department. If realized, that would be the second earliest start date in data through 2020,” Bloomberg reported. Still, the agency last month forecast the annual rains to be below-average, affected by the looming El Niño weather phenomenon. The four-month season brings most of India’s yearly precipitation and is vital for replenishing aquifers and supporting farm activity.
Weak rupee prompts India’s government to restrict gold imports… India’s gold imports are slowing to a trickle as banks and bullion traders grapple with new restrictions aimed at shoring up a weak rupee battered by the Middle East war. “An increased import duty and a curb on volumes have strained gold flows into the world’s second biggest bullion consumer. Domestic prices do not currently reflect the additional costs as some speculators offload their existing stockpiles into the marketplace. However, immediate demand is likely to stay low, according to analysts and traders,” Bloomberg reported today. “The duty increase dwarfs a 4 to 6% increase in local prices. That means it is not currently viable to import and sell — though the gap between the import cost and local prices will reduce over time, said Sunil Kashyap, managing director of FinMet Pte Ltd,” said the report. India, the world’s third-largest oil importer, more than doubled gold and silver tariffs to 15% on Wednesday, as part of a swathe of austerity measures to cushion the economy from the inflationary shock caused by energy disruptions in the Persian Gulf. The nation further tightened rules on Thursday, requiring bullion imports by jewelers and manufacturers under tax-exempted status to be capped to a maximum of 100 kilograms per license. Subsequent imports would be issued only after 50% is exported.
Malaysian palm oil futures rebound… Malaysian palm oil futures strengthened Friday, hovering above MYR 4,400 per MT and rebounding from the downside seen since early May. Sentiment was supported by a weaker ringgit, alongside firmer soyoil prices in Chicago and a sharp rise in crude oil prices amid concerns over ship attacks and seizures in the Strait of Hormuz. Markets also monitored a second day of talks between the U.S. and Chinese presidents in Beijing, with investors hoping for signs of easing trade tensions. However, palm oil contracts were still on track for a third straight weekly decline, down roughly 1.7% so far, pressured by softer demand from key buyer India. The country’s palm oil imports plunged 26% in April from March to hit the lowest level in four months, as institutional buying softened and palm oil’s price discount against rival edible oils narrowed. Meanwhile, export data for the first ten days of May remained mixed, with AmSpec Agri reporting shipments fell 10.8%, while Intertek estimated an 8.5% growth.
Cash cattle prices solidly up late this week… June live cattle on Thursday fell $0.725 to $252.075. August feeder cattle fell $2.925 to $358.00. The cattle futures markets saw corrective pullbacks following Wednesday’s good gains. Solidly higher cash cattle prices fetched in active trading late this week limited selling interest in futures. USDA at midday Thursday reported active cash trading activity, with steers fetching an average price of $262.30 and heifers $261.78. Last week’s average cash cattle trade was $258.52. Hot temperatures in the southern Plains through this weekend will stress livestock.
Lean hog futures bears still in control… June lean hog futures on Thursday fell $1.35 to $99.525. The lean hog futures market saw a downside correction following good gains posted on Wednesday. Bulls today did not get the follow-through buying that would have begun to suggest a near-term market bottom is in place. The near-term technical posture for June hogs is still bearish as prices are still in a downtrend on the daily bar chart. The latest CME lean hog index is up 26 cents at $90.74. Today’s projected cash index price is down 26 cents at $90.48. The national direct five-day rolling average cash hog price quote Thursday was $95.04.