Good morning!
Grain futures higher overnight… At 6:00 a.m. CDT, December corn was up 4 1/2 cents and hit a contract high. November soybeans were 3 cents higher. September soybean meal was up $4.10 and hit a four-week high. September bean oil was 121 points lower. December SRW wheat was 11 3/4 cents higher and hit a four-week high. December HRW wheat prices were up 12 3/4 cents and also hit a four-week high. Corn is leading the bullish charge in the grain markets at mid-week. Tuesday’s price action was very important for the corn market, from a technical perspective. After a low-range close on Monday that had many wondering if the corn bulls had become exhausted, the bulls stepped on the gas at midsession Tuesday to produce a fresh contract high in December corn by the close. Tuesday’s price action also suggests Monday’s gap-higher move in December corn is a “breakaway” price gap that signals still more price upside in the near term. The key outside markets today see the U.S. dollar index slightly up. October Nymex WTI crude oil prices are lower and trading around $80.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.64%.
Scattered storms in Midwest; extreme heat continues to bake southern Plains… The National Weather Service today said a strong upper-level ridge will remain anchored across the Southwest into the south-central U.S. into late week, bringing daytime highs in the upper 90s to low 100s, with isolated areas reaching between 100-115 degrees in the Southwest and southern Plains. A boundary from the central/southern Plains and Midwest into the Ohio Valley will see scattered showers and thunderstorms in those regions. Meanwhile, daily thunderstorms will roll across the portions of the Southwest, Great Basin, Rockies, and central/southern Plains. The combination of high moisture and instability may lead to strong winds, large hail and lightning across the central/southern High Plains.
American Soybean Association pushes back on small refinery waivers… The American Soybean Association on Tuesday raised the alarm over reports the U.S. government may issue far more small refinery waivers than expected for the 2025 Renewable Fuel Standard (RFS) year. Under a revised methodology, these refinery exemptions could reportedly cover more than 1.8 billion biofuel credits (RINs)—nearly double what the EPA originally planned for in its latest target rules. The ASA said such a large increase in exemptions would slash demand for biomass-based diesel by around 500 million gallons, cost farmers approximately $1 billion in lost revenue and put refiner interests ahead of farmers. “At a time when soybean farmers are already struggling to support our farms, we cannot afford for the rug to be pulled out from under one of our most important sources of domestic demand,” said ASA Vice President Dave Walton, an Iowa soybean farmer.
China warns U.S. on any further sanctions regarding Iran… Beijing warned the U.S. on Tuesday that it would retaliate if the Trump administration includes Chinese companies in any significant expansion of new secondary sanctions related to Iran. Measures announced Monday by U.S. Treasury Secretary Scott Bessent targeted Hong Kong- and mainland-based companies but stopped short of listing major Chinese financial institutions, the Financial Times noted. An increase in U.S. sanctions on China, which buys around 90% of Iranian crude, could upend a U.S.-China trade truce ahead of Chinese leader Xi Jinping’s scheduled U.S. visit next month.
Key U.S. inflation data out today… U.S. PCE inflation reports are out this morning. The personal Income and outlays report for July is expected to see personal spending and personal income to rise 0.2% and 0.3%, respectively. On top of that, headline PCE prices are set to inch 0.1% higher from the previous month, and up 3.6% year-on-year. Meantime, core PCE prices (excluding food and energy) are expected to rise 0.2%, leaving the annual rate for the latter at 3.3%. The releases come in tandem with the second estimate for the second-quarter GDP report this morning. Separately, Nvidia’s quarterly results, due after the closing bell today, will also be closely watched for signs of continued strength in artificial intelligence-driven demand.
Crude oil price slide continues at mid-week… Oil prices fell for a third day as Iran and Oman discussed a potential deal to resume shipping through the Strait of Hormuz. Brent slipped below $86 a barrel, taking its decline this week to about 9%, while West Texas Intermediate futures fell under $80. Iranian Foreign Minister Abbas Araghchi and his Omani counterpart Badr Albusaidi discussed the initiative to establish a “temporary joint maritime corridor,” according to a statement carried by the Oman News Agency and as reported by Bloomberg. Crude prices have declined this week as diplomatic efforts once again gained traction, though multiple previous rounds of talks have failed to bring a permanent halt to the conflict, which began in February. “In the meantime, the situation in the Strait of Hormuz, which previously handled about a fifth of the world’s oil, remains complex. Millions of barrels a day of crude are escaping the waterway, but attacks on shipping also continue. At the same time, relatively little refined fuel is making its way out, and prices for those products remain elevated,” said the report.
U.S. considering further trade duties on Canada… The Trump administration is discussing additional trade penalties against Canada after Prime Minister Mark Carney unveiled dollar-for-dollar retaliation to new tariffs imposed by the U.S. Additional U.S. escalation against Canada could include higher tariffs and other trade actions, according to a White House official and as reported by Bloomberg. The Canadian government on Tuesday announced it would double its existing counter-tariffs on U.S. steel and aluminum products to 50% and apply new 50% duties to other U.S. products, affecting $20 billion worth of annual U.S. exports to Canada.
Copper futures hit a record high… Copper futures today climbed above $6.70 per pound, reaching a new all-time high as supply-side risks persist despite a recent easing of the market squeeze. Traders continued to divert shipments toward the U.S. amid elevated premiums and expectations of new tariffs under the Trump administration, with the White House yet to make a final decision on the matter. Copper inventories in warehouses tracked by the London Metal Exchange have fallen by almost half since mid-May following a 42-day streak of declines.
‘Dolly was a farmer…' Tributes poured in after Dolly Parton’s death at the age of 80 was announced Tuesday in a video message by her nephew, Bryan Seaver. President Trump said he would order U.S. flags to be lowered in tribute for the next week. The Empire State Building turned its lights pink Tuesday night in her honor. Agricultural officials and others in the farming community mourned the passing of the country music legend, the daughter of a Tennessee tobacco farmer. In the family’s video message, Seaver underlined Parton’s roots: “Dolly was a farmer just like her daddy. He farmed the soil, she farmed songs and happiness.”
Malaysian palm oil futures weaker… Malaysian palm oil futures extended losses Wednesday, trading below MYR 4,900 per MT and touching their lowest level in a week as traders returned from a holiday. Sentiment was pressured by a stronger ringgit and weaker soyoil prices on the Chicago market, while crude oil fell on renewed hopes that the Strait of Hormuz could reopen. Demand concerns also weighed, with cargo surveyor Intertek Testing Services noting that palm oil product exports for August 1–25 dipped 20% from the same period in July. Ample supplies added to the bearish tone, as Malaysian palm oil inventories climbed to a five-month high in July. Separately, exports by top grower Indonesia fell 9.2% year-on-year in June, according to palm oil association GAPKI. Still, losses were capped by firmer Dalian soyoil prices. Concerns that a developing El Niño could intensify dryness and curb output in Indonesia and Malaysia also provided support, along with Indonesia’s planned full implementation of its B50 mandate from Oct 1.
Cattle futures still bleeding amid weakening cash market… October live cattle on Tuesday fell $2.65 to $210.95 and hit an eight-month low. November feeder cattle lost $5.275 to $305.70 and also hit an eight-month low. The two markets saw follow-through selling pressure as the bullish traders continue to run for cover. The Trump administration’s latest push to lower beef prices via cheaper imports still has the cattle market bulls spooked. Lower cash cattle trading last week and early this week is also bearish for futures. Cattle futures are also under pressure as Monday marked the first day of the reopening of the southern border to feeder imports at the Douglas, Arizona port. USDA at midday Tuesday reported very light cash cattle trading so far this week, at $218.00. The agency Monday said last week’s cash cattle trading activity averaged $225.01. In the southern Plains states, livestock heat stress continues this week, making weight gains continuing to be a challenge.
Lean hog futures see more chart-based selling pressure… October lean hog futures on Tuesday fell $0.675 to $80.45. The lean hog futures market saw more technical selling as the charts are firmly bearish. More solid losses in the cattle futures markets also spilled over into selling pressure in hogs. The cash hog market continues to trend down, too. The latest CME lean hog index down 40 cents to $92.86. Today’s projected CME index price is down another 21 cents at $92.65. The national direct five-day rolling average cash hog price quote for Tuesday was $92.36.