Good morning!
Grain futures prices weaker overnight… As of 6:00 a.m. CST, July corn was down 2 cents after hitting a five-week high overnight. July soybeans were 3 cents lower. July soybean meal was down $3.50 and July bean oil was 46 points lower after hitting a contract high overnight. July SRW wheat was down 8 cents and July HRW was off 11 1/2 cents. Profit taking from the shorter-term traders was featured in corn and winter wheat futures overnight. Soybeans are being weighed down by meal futures prices being under significant selling pressure Wednesday and overnight. On tap today for the grains is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index solidly down, while Nymex WTI crude oil prices are near steady and trading around $106.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.41%.
Latest on the war in the Middle East…
--Brent crude oil hits four-year high on reports U.S. mulls Iran military options
--U.S. seeks to deploy hypersonic missile for the first time against Iran
--California gasoline price surges above $6 as Iran war spurs gains
--One by one, Asian currencies are faltering as oil worries worsen
--India’s rupee currency drops to record low as amid crude oil surge
--U.S. seeks forfeiture of seized oil tankers linked to Iran
President Trump will receive a briefing on new military options for action in Iran, signaling the potential for fresh escalation in the Middle East, Axios reported. Brent crude oil futures surged as much as 7.1% to surpass $126 a barrel — the highest since the aftermath of Russia’s invasion of Ukraine in 2022 — before paring gains to trade near $122. The head of U.S. Central Command Admiral Brad Cooper will brief Trump today, signaling a resumption of combat operations are seriously under consideration, Axios said, citing two unnamed people.
Rain in southern Plains; cooler in eastern two-thirds of U.S. … The National Weather Service today said widespread persistent rainfall will continue in Texas and parts of the southern Plains. There is the potential for excessive rainfall for central Texas today, and Texas and parts of the Lower Mississippi on Friday. Farther north, much of the eastern two-thirds of the country will experience below-average temperatures. In the central Rockies, an upper-level wave and associated surface low will bring mixed precipitation and snow through the end of the week. The mid-Mississippi Valley into the Ohio Valley and Mid-Atlantic will see showers and thunderstorms. In contrast to the cooler East, much of the western U.S. will see a notable warm-up, with temperatures climbing to above-average levels for the interior West and desert Southwest into the weekend.
Fed keeps U.S. rates steady; Powell staying… Federal Reserve officials left U.S. interest rates unchanged Wednesday, as fully expected, but revealed a deepening division over the outlook for policy amid increased uncertainty caused by the conflict in the Middle East. Four officials voted against the decision, including three who objected to language in their post-meeting statement that suggested the central bank would eventually resume cutting rates. Meantime, Fed Chair Jerome Powell said he intends to remain at the central bank as a member of its Board of Governors, and will not leave until a controversial criminal investigation into the central bank is “well and truly over with transparency and finality.”
Global biofuels boom… “Demand for biofuels has been growing in many parts of the world. Governments, particularly those in countries with big farming sectors, have viewed crop-based fuels as a way to support domestic agriculture, cut transport fossil-fuel emissions and help address climate change,” said a Bloomberg report. The energy crunch caused by the closure of the Strait of Hormuz has created a further incentive to boost production: energy security. Since the Iran war broke out, major biofuel producing countries Indonesia, Malaysia, Thailand, Vietnam and Brazil have moved to allow more biofuels to be mixed into transport fuels to cut down on imports and ensure security of supply. Biofuels now account for about 6% to 8% of global farmland use, compared with about 1% 20 years ago. In the U.S., production has been growing since the 1980s and it’s the world’s largest ethanol producer. “Governments see biofuels as a quick win: They can be blended into existing fuels and used in most engines, while leveraging existing infrastructure like refineries and fuel stations,” said the report. “For countries with large agricultural sectors — particularly emerging economies — biofuels offer a way to repurpose crops, support farmer incomes and cut fuel imports.”
U.S.-Iran war fanning inflation in China: IMF… China is seeing signs of a return of inflation as the U.S.-Iran war pushes up energy costs but will need more sustainable price gains to fully turn around deflationary pressures, according to an International Monetary Fund official. “If you look at inflation, certain numbers have come up,” Krishna Srinivasan, the IMF’s Asia-Pacific director, said in an interview on Bloomberg Television today. On whether China is experiencing reflation, he added that while there have been some signs of that, “I would want to see it on a more durable basis before I can say anything more firmly.” The world’s No. 2 economy is set to end a record streak of economy-wide deflation as producer prices emerge from more than three years in the red. China’s growth has held up this year, in part thanks to a boom in global demand for artificial intelligence and high-tech related products that has led to explosive export growth across Asia.
Stagflation starting to grip European Union… The eurozone economy unexpectedly slowed at the start of 2026, with soaring energy costs triggered by the Iran war threatening stagflation in the months ahead, according to a report by Bloomberg. First-quarter gross domestic product rose 0.1% from the previous three months — below the 0.2% median estimate in a Bloomberg poll. “Highlighting the dangers still unfolding just hours before the European Central Bank sets interest rates, a separate release from Eurostat showed consumer prices surged 3% in April — the fastest pace since September 2023” and led by rising energy costs. Slowing economic growth and accelerating inflation are a recipe for dreaded stagflation. European Commission President Ursula von der Leyen has warned that the economic damage may be felt for “years to come.” France and Italy have already trimmed their outlooks for economic growth, while Germany has halved its forecast for 2026 to 0.5%.
Malaysian palm oil futures rally… Malaysian palm oil futures extended gains Thursday, holding above MYR 4,600 per MT, amid a weaker ringgit and firmer edible oils on the Dalian and Chicago exchanges. Near-term sentiment remains constructive, with the Malaysian Palm Oil Council expecting prices to stay above MYR 4,500, supported by elevated energy costs and potential El Niño-driven supply risks. In top grower Indonesia, output is projected to fall by up to 2 million metric tons this year on dry weather and rising fertilizer costs, reinforcing supply concerns. Even so, contracts are set to post a loss in April, down around 4.5% so far, following a near 20% surge in March, as the market undergoes a natural correction. The pullback has been driven largely by weaker exports, with cargo surveyors noting April 1–25 shipments down 15.7%–16.8% from the prior month, reflecting typical post-festive softness. Meanwhile, stocks in March remained ample despite easing from February. Markets will be closed on Friday for the Labor Day break.
Live cattle futures hit record high… June live cattle on Wednesday rose $1.75 to $255.25 and hit a contract and record high. May feeder cattle fell $0.225 to $371.50 after hitting a two-week high early on. The cattle futures markets bulls came out of the chute strong Wednesday but faded a bit as the trading session progressed as profit-taking from the shorter-term traders was featured. Still, this week’s strong gains put the bulls back in firm technical control. Active cash cattle trading at solidly higher levels at mid-week also supported buying interest in cattle futures. USDA at midday Wednesday reported active cash cattle trading so far this week, with steers averaging $254.58 and heifers $254.28. That’s well above last week’s cash cattle price that averaged $246.18.
Lean hog futures rally on perceived bargain buying… June lean hogs on Wednesday rose $1.775 to $103.75 and hit a three-week high. The lean hog futures market saw more short covering and perceived bargain hunting. Strong gains in the cattle futures markets this week also supported buying interest in hog futures. The latest CME lean hog index is down 7 cents at $91.19. Today’s projected cash index price is up 12 cents at $91.31. The national direct five-day rolling average cash hog price quote Wednesday was $91.91.