Good morning!
Grain markets mostly steady overnight… As of 6:00 a.m. CDT, December corn futures were unchanged, November soybeans unchanged and winter wheat futures were slightly up. Today is the last trading day of the month, which makes it an extra important trading session from a technical perspective. The grain futures markets, except bean oil, are all in danger of seeing technically bearish monthly low closes today. The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are down a bit and trading around $69.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.35 percent.
Weather in August likely to be non-threatening to Midwest crops…The odds of seeing a blocking weather pattern in August over or near North America are low, according to a special report just released by World Weather Inc. “August is one of those months that ‘normal’ rainfall is rarely enough to counter evaporation, and net drying tends to occur in more summers than not. For that reason, producers and traders should anticipate less soil moisture at the end of August than there is today. By no means should that be interpreted as drought-like conditions.” Subsoil moisture is rated favorably in much of the Midwest today and the weather pattern in early August should do a fair job of maintaining that situation, which will be very important since subsoil moisture will carry summer crops to the finish line, said the forecaster. “Favorable subsoil moisture should protect production potentials even if and when the topsoil dries out. Meanwhile, August weather is going to provide some short-term beneficial moisture to the Delta and Tennessee River Basin to reverse recent drying, said World Weather.
Fed’s Powell stands his ground… Federal Reserve Chairman Jerome Powell shrugged off pressure from the White House and rejected arguments for an interest-rate cut from two dissenting Fed officials, saying the U.S. central bank needs to stay on guard against any problematic inflation. The Federal Open Market Committee voted to hold interest rates steady for a fifth consecutive meeting. However, this week’s meeting saw the first double dissent from Fed governors in more than 30 years. During his press conference, Powell said the Fed is well-positioned for now, given uncertainties surrounding U.S. tariffs and their economic impact. His comments were balanced, tempering expectations for a September rate cut, but not ruling out a cut at that time. Markets showed no major reactions to the FOMC/Powell news.
Strong greenback roiling Asian currencies…The Bloomberg Asia dollar spot index, which tracks the performance of a basket of leading Asian currencies versus the U.S. dollar, fell as much as 0.2% in early trading Thursday, to the lowest level since May 19. The Philippine peso led declines. The Indian rupee hovered near record lows. Regional currencies were set for their biggest monthly loss this year as the U.S. dollar has surged recently, including after the Federal Reserve held its benchmark interest rate steady Wednesday. Expectations for a September U.S. rate cut have also eased following recent upbeat U.S. economic data. Central banks across Asia have stepped up currency market intervention efforts to stabilize their own currencies. The Hong Kong Monetary Authority stepped in to buy HK$3.925 billion to defend its currency peg, while Indonesia’s central bank intervened in the foreign-exchange markets. The People’s Bank of China set a stronger-than-expected fixing to support the yuan.
Flurry of U.S. tariff activity ahead of Friday deadline… President Trump Wednesday announced tariffs of 15% on imports from South Korea, the same as neighboring Japan, and stronger 25% tariffs on imports from India that was accompanied by Trump criticizing Indian purchases of Russian energy and weapons. Trade deals are in the offing for Thailand and Cambodia. A deal with Taiwan was also being drafted as the two sides reached “a certain degree of consensus,” Bloomberg reported. Malaysia’s prime minister said Trump told him he’ll announce a levy Friday. These latest tariff moves come on the eve of an Aug. 1 U.S.-imposed trade-deal deadline. Trump has said U.S. tariff rates globally will come in from 15% to 50%, unless deals are made with other countries before Aug. 1.
“Blood on the street” in copper futures market… President Trump surprised the copper futures market with new tariff rules on copper imports, which dropped copper futures prices sharply lower. Broker SP Angel said in an email dispatch today: “Blood on the street (in copper futures) as Trump exempts refined copper from the 50% tariff he mentioned a while ago, with no immediate tariffs on copper or copper products.” Copper futures in the U.S. fell up to 6% overnight, extending the record 18% plunge Wednesday after Trump excluded refined copper from the tariff package that will start on Friday.
Central bank gold-buying backs off…Gold buying by central banks and jewelers eased in the second quarter amid the recent record high prices for the yellow metal. Central banks bought 166.5 tons in the three-month period, one-third less than in the first quarter, bringing purchases for the first half of the year to the lowest since 2022, according to the World Gold Council. Central bank demand is now forecast at about 815 tons for 2025.
Malaysian palm oil futures lower… Malaysian palm oil futures lost ground Thursday, trading at around MYR 4,250 per MT, reversing gains from the prior two trading sessions amid price weakness in rival edible oils on the Dalian and CME exchanges.
Weekly USDA export sales out this morning… This morning’s weekly USDA export sales report is expected to show U.S. corn sales of 200,000 to 800,000 MT in the 2024-25 marketing year, and sales of 600,000 to 1.6 million MT in the 2025-26 marketing year. U.S. soybean sales of 100,000 to 300,000 MT in the 2024-25 marketing year, and sales of 100,000 to 600,000 MT in the 2025-26 marketing year are expected. U.S. wheat sales are seen between 300,000 and 700,000 MT in the 2025-26 marketing year, according to a Reuters survey of analysts.
Live cattle futures market now very extended… Live and feeder cattle futures bulls still have the firm overall near-term technical advantage. Overall cash cattle and beef market fundamentals remain solid. However, this latest surge in live cattle futures prices may be a climaxing-type price move that puts in a major top sooner rather than later. Still, live cattle futures’ steep discounts to cash cattle market should continue to limit selling in futures. Very light cash cattle trade has taken place this week, with an average price fetched of $240.00, according to USDA. Last week’s USDA average cash cattle trading price was $239.38, which was a record high weekly average.
Lean hog futures market bulls lose momentum… The lean hog futures bulls are working to stabilize their market following this week’s selling pressure. Near-term technicals have deteriorated, with fresh pork market fundamentals also weakening a bit. The latest CME lean hog index is up another 13 cents to $110.45 as of July 28. Thursday’s cash index projected price quote is up 6 cents at $110.51.
Today’s reports—Thursday
-- 7:30 am Weekly Export Sales FAS
-- 1:00 pm Vegetables and Pulses Outlook: July 2025 ERS
-- 2:00 pm Agricultural Prices NASS
-- 2:00 pm Slaughter Weekly NASS