Good morning!
Grain futures prices mixed overnight… At 6:00 a.m. CDT, December corn was up 1 3/4 cents. November soybeans were down 4 1/2 cents. September soybean meal was off $0.90. September bean oil was 65 points lower and hit a three-week low. September SRW wheat was down 4 1/2 cents and September HRW wheat prices were off 1 3/4 cents. The air is coming out of the bullish balloon in the grain markets. There’s an old trader adage that says a bull market in the grains needs to be fed fresh fundamental news on a regular basis. It appears the grain bulls now need a fresh fundamental spark to reinvigorate the price rallies. Price action the next two or three trading sessions will be critical for the grain futures markets. If the downside price pressure persists during that timeframe, it’s likely the summertime bull markets have run their course. The key outside markets today see the U.S. dollar index slightly higher. September Nymex WTI crude oil prices are lower and trading around $81.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.62%.
U.S.-Iran tensions appear to be de-escalating; crude oil prices drop again… The U.S. and Iran extended their pause in hostilities Tuesday, with the focus turning to talks between Tehran and Oman over restarting shipping traffic in the Strait of Hormuz. “Omani officials hope to make an announcement signaling progress in the next few days, though there’s no guarantee that will happen, as discussions between Omani and Iranian negotiators are ongoing,” said a Bloomberg report. President Trump said there are currently “very deep talks” with Iran and suggested the negotiations involving Oman are the main track, and that Iran is talking because of the pressure caused by U.S. military strikes, said the report.
Extreme heat moving south and out of the Corn Belt … The National Weather Service today said the persistent upper ridging continues in place over the central U.S. but has moved south, bringing another period of well-above-normal temperatures across the southern U.S. as the Midwest cools off just a bit. Widespread afternoon highs will reach the mid to upper 90s, with localized readings exceeding 100 degrees across portions of Texas, Oklahoma and the lower Mississippi Valley.High temperatures combined with high humidity will produce dangerous heat indices approaching or exceeding 105 to 115 degrees. Additionally, temperatures will remain above normal across portions of the northern Plains/Rockies with highs in the 90s. Across the southwest, daily afternoon and evening thunderstorms will be fueled by monsoonal moisture over the Four Corners through the central/northern Plains. Additionally, there is a severe thunderstorm threat across the central High Plains, as the storms may be capable of producing severe hail and locally strong wind gusts. Further north across the northern/central High Plains, a surface trough will bring a severe thunderstorm threat capable of producing hail and damaging winds on Wednesday.
Weekly USDA crop progress updates… Monday afternoon’s weekly USDA crop progress reports showed U.S. corn and soybean crop conditions deteriorated more than expected last week. USDA said 63% of the corn crop was rated “good” or “excellent” as of Sunday, down from 67% a week ago and two percentage points below the average trade guess of 65% in a Bloomberg survey of analysts. Last year at this time the crop was rated 73% good to excellent. The Pro Farmer Crop Conditions Index (on a 0-to-500 scale, 500 equals perfect) saw an 8.25- point decline to 364.39. USDA pegged 63% of the soybean crop in the good or excellent categories, down from 66% last week and also two percentage points below the average guess. Soybeans were rated 70% good to excellent last year. The CCI rating dropped 5.23 points from last week as well to 365.09. The spring wheat crop’s rating was 53% good to excellent, unchanged from last week and two percentage points above the average guess. The Pro Farmer CCI dropped 7.01 points to 344.38. For more details on this week’s Pro Farmer CCI ratings, click here.
Pro Farmer crop consultant leaves U.S. corn, soybean yield forecasts unchanged… Our crop consultant, Dr. Michael Cordonnier, in his weekly report made no changes to the U.S. corn and soybean crops yields. He left his 2026 U.S. corn yield unchanged at 181.0 bu/ac with a neutral- to-lower bias. “The cool temperatures of last week gave way to the return of heat over the weekend, especially in the central U.S.A heat dome developing over the central U.S. should result in dryer-than-normal weather again this week, leading to more declines in soil moisture next Monday.Nighttime temperatures are also expected to remain elevated, which is becoming more of a concern for the corn,” he said. Cordonnier also left his 2026 U.S. soybean yield unchanged this week at 52.0 bu/ac, with a neutral-to-lower bias. “Weather forecasts for this week look better than they did last week but hotter and dryer-than-normal conditions are expected across the central U.S. The area of most concern is the western Corn Belt, especially the Dakotas which will have some of the hottest temperatures,” he said.
China continues to push back on unfair trade allegations… China has mounted a forceful defense of its booming exports, “rejecting Western claims of overcapacity as it braces for escalating trade friction with the U.S. and European Union,” said a Bloomberg report. China’s Ministry of Commerce published a 10,000-character position paper on Tuesday rejecting trading partners’ claims of excess factory production. It comes as Washington continues a probe into Chinese manufacturing, while Brussels faces an October deadline to address the bloc’s record trade imbalance with China. “Some economies have hyped up the so-called China excess-capacity issue,” Vice Commerce Minister Yan Dong said at a briefing in Beijing. The paper was intended to “set the record straight,” he said, according to Bloomberg. “The document amounts to Beijing’s most comprehensive rebuttal yet of an argument increasingly driving Western trade policy: that China’s combination of state support, weak domestic demand and continued factory investment is pushing surplus goods onto global markets and threatening producers elsewhere,” said the report. Meantime, U.S. customs officials have carried out spot inspections on China-linked factories in Vietnam to determine how much value was added before exporting to the U.S. and potential software intellectual property violations.
Total New World screwworm cases detected in U.S. still at 42… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 42 total New World screwworm detected cases in the U.S. There are 9 active cases, all in Texas.
Computer chip stocks melting down… A sell off in semiconductor stocks deepened overnight “as signs of progress in China’s advanced chipmaking compounded worries about the sustainability of the artificial intelligence spending boom,” said a Bloomberg report. U.S. technology-heavy Nasdaq 100 futures fell 0.6%, while in Asia, a 7.5% slump put a Bloomberg gauge of semiconductor shares on course for its biggest decline since April 2025. The MSCI World Semiconductor index has plunged 13% this month to track its worst performance since 2022, although it remains about 33% higher for the year. “When one trade becomes this crowded, investors don’t wait for bad news, they simply need a reason to take profits,” said Violeta Todorova, senior research analyst at Leverage Shares, said the Bloomberg report.
Fed policy meeting begins today… The Federal Reserve’s Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Kevin Warsh. There are lingering concerns the Fed could raise interest rates this week. Markets are currently pricing in an over one-third chance of a Fed rate increase on Wednesday, an unusually high level of uncertainty this close to a Fed meeting compared with recent years. Citadel Securities said it expects the Fed to raise rates this week to reinforce Chairman Kevin Warsh’s credibility in fighting inflation after the central bank chief repeatedly pledged to restore price stability.
Malaysian palm oil futures continue slide… Malaysian palm oil futures remained under pressure Tuesday, extending recent losses to trade below MYR 4,650 per MT as weaker rival edible oils on the Dalian and Chicago exchanges weighed on sentiment. Prices moved further away from last week’s 15-week high amid a sharp decline in crude oil prices after the U.S. paused strikes on Iran, reducing support by weakening the biodiesel outlook. Still, losses were capped by stronger export demand, with cargo surveyors estimating that July 1–25 palm oil shipments rose between 8.1% and 15.9% from the same period in June. Additional support came from higher biodiesel blending mandates in exporting countries such as Indonesia and Malaysia. Meanwhile, palm oil imports by top buyer India are expected to rise between July and October as tighter edible oil supplies ahead of the festive season boost demand. Weather also remained supportive, with Malaysia warning that record-high temperatures could curb output next year.
Feeder cattle futures lead live cattle lower as southern border to reopen… August live cattle on Monday fell $1.85 to $225.225. August feeder cattle lost $7.075 to $338.25 and closed at a seven-month low close. October through May feeder cattle futures contracts closed down the daily trading limit of $10.75, which means expanded daily trading limits will be in place today. The cattle futures markets saw selling pressure from the news USDA announced a coordinated, phased reopening of southern cattle ports, contingent on Mexico’s adherence to the Joint Action Plan. That rattled the futures, especially feeders, from a supply perspective. However, this news did not blindside traders, who had been reckoning a reopening of the border was coming at some point. Livestock stress continues high in the Plains states and will stay high because of oppressive heat. Livestock weight gains were down and will stay down today as the hottest weather continues one more day. USDA at midday Monday reported cash cattle trading last week averaged $230.48, which is down $7.80 from last week’s reported average cash cattle trade at $238.28.
Lean hog futures pause amid price uptrend still in place… August lean hog futures on Monday rose $0.125 to $102.975 and closed at a nine-week high close. The hog futures market paused after two sessions in a row of good gains. A price uptrend remains in place on the daily bar chart, which limited selling interest Monday and continues to invite the chart-based specs to the long side of the futures market. Bulls continue to be encouraged by rising cash hog prices. The latest CME lean hog index is up 43 cents to $97.91. Today’s projected CME index price is up another 32 cents at $98.23. The national direct five-day rolling average cash hog price quote for Monday was $100.60.