Good morning!
Grain futures mixed but mostly higher overnight… At 6:00 a.m. CDT, December corn was up 15 1/2 cents and hit a new contract high. November soybeans were 1 1/4 cents lower. September soybean meal was up $1.60. September bean oil was 171 points lower and hit a nearly three-week low. September SRW wheat was up 15 1/2 cents and hit a four-week high, while September HRW wheat prices were up 13 1/4 cents and poised to close at a contract high close today. King Corn led grain price strength overnight by gapping higher on the daily chart, which has the technical traders wondering if it’s a “breakaway” upside price gap that will fuel more strong gains in the near term. The price-bullish Pro Farmer Crop Tour results are fundamental fuel for the corn bulls early this week. Beans are being constrained by Crop Tour results that suggested a slightly bigger U.S. soybean crop than the August USDA report showed. (See item below.) Winter wheat prices are being pulled higher by the big rally in corn and by ongoing and serious grain-shipping disruptions in the Black Sea region. On tap today are USDA’s weekly export inspections and crop progress reports. The key outside markets today see the U.S. dollar index higher. October Nymex WTI crude oil prices are lower and trading around $85.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.708%.
Pro Farmer Crop Tour results rally the corn market… The big news in the grain markets last week that is still impacting the markets early this week is the annual Pro Farmer Crop Tour. Pro Farmer Friday afternoon after the grain markets closed pegged the national U.S. corn crop production number at 15.344 billion bushels on an average yield of 173.2 bushels per acre. The tour data projected a U.S. soybean crop of 4.572 billion bushels on an average yield of 53.3 bushels per acre. For more on the Pro Farmer estimates, click here.
India scraps its wheat export ban… India, the world’s second-biggest wheat producer, has scrapped a years-long ban on exports of the grain, “a move that could ease global supplies that are under strain from escalating attacks between Russia and Ukraine,” Bloomberg reported. “The government has permitted exports of wheat, including the durum variety, as well as flour and other products, according to notifications issued on Monday by the Directorate General of Foreign Trade. In February, the government had permitted limited shipments of the grain. India’s outbound wheat shipments could ease supply pressures in import-dependent countries across Asia, Africa and the Middle East at a time when a pickup in attacks on commercial vessels and ports in the Black Sea has disrupted grain flows from some of the world’s top exporters,” said the report. India’s last wheat harvest climbed to an all-time high of 120.6 million tons. However, the government has largely prohibited wheat exports since 2022 — the year Russia’s invasion of Ukraine began — citing food security concerns, said the report.
Scattered showers in Midwest; high heat still grips southern Plains… The National Weather Service today said a strong ridge anchored over the Southwest and south-central U.S. will continue to bring hazardous heat across the Southern Plains and lower Mississippi Valley, and gradually into the Southwest by mid-week. Daytime highs will reach 100-110 degrees across the southern Plains, while portions of the Southwest can reach up to 115. The western periphery of the ridge will remain a corridor for monsoonal moisture extending northward across the Four Corners and intermountain West/Rockies. Farther north, a progressive westerly flow will persist across the northern Rockies/Plains and upper Midwest. As the frontal boundary moves eastward, it will interact with warm unstable air, supporting repeated organized showers and thunderstorms across the Rockies/Plains into the Upper Midwest. Locally heavy rainfall and severe thunderstorms will be possible with stronger storms through Tuesday, especially over the central/southern High Plains.
U.S.-Canada trade talks fall apart… U.S.-Canada trade negotiations unraveled late last week, with 50% U.S. tariffs hitting billions of dollars of Canadian goods and Prime Minister Mark Carney vowing to retaliate in a dispute that looks poised to intensify. “The U.S. import taxes kicked in Saturday on hundreds of items from Canada, such as plywood, liquor, electrical equipment and hockey gear, totaling around $20 billion. The Trump administration invoked a Depression-era authority for the first time to justify the move,” said a Bloomberg report. Carney said he suspended talks with Washington and that his government would match those duties “dollar for dollar to protect our workers and businesses.” If he does, U.S. officials are pledging to present President Trump with options to escalate. The two sides blamed each other for the collapse. U.S. Trade Representative Jamieson Greer said the Canadian negotiators made 11th-hour demands that upended a draft deal worked out over days of negotiations. “Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days,” Greer said in a statement. A U.S. official, speaking on condition of anonymity late Friday, said there were no new talks scheduled, according to the Bloomberg report.
Bessent lays out U.S. economic sanction plans for Iran today… President Trump is betting new sanctions, a naval blockade and ramped-up economic pressure against Iran’s trading partners can accomplish what thousands of bombs and missiles could not: force Tehran to accept a deal to end the war on U.S. terms, said a Bloomberg report. A key part of the U.S. effort will come today when Treasury Secretary Scott Bessent unveils details of a plan designed to shift the conflict from tit-for-tat strikes across the Middle East to full-blown economic isolation — a campaign that could touch nations ranging from China and India to Turkey and the United Arab Emirates. “Yet significant new economic pressure is likely to prompt Iran to retaliate with military strikes across the Gulf — including against energy infrastructure — in an attempt to push up oil prices and raise the cost of the U.S. effort, forcing Trump to shift his approach once again,” Bloomberg reported. Bessent suggested last week that the shift to an economic campaign “means that likely there will not be a large-scale kinetic restart.” But analysts aren’t so sure that Iran will refrain from a return to open hostilities, even if the U.S. does.
U.S. Treasury yields stable ahead of Fed’s annual Jackson Hole symposium… U.S. Treasury prices rose at the start of a potentially pivotal week for the U.S. bond market, with remarks from Federal Reserve Chairman Kevin Warsh and U.S. Treasury Secretary Scott Bessent likely to determine where yields go next. Warsh is in traders’ and investors’ crosshairs with his keynote speech at the Kansas City Fed’s annual Jackson Hole symposium Friday. He will be under pressure to address how the Fed will navigate tackling inflation that is running well above target amid Bessent’s intervention to bring down long-term borrowing costs. Another key question for investors is what the Treasury Secretary will do next. Having surprised the market last week with a plan to increase buybacks of longer-dated notes, bondholders now want specific details on a financial initiative touted by Bessent as a way of tackling the country’s vast budget deficit.
Malaysian palm oil futures prices pull back… Malaysian palm oil futures on Monday hovered below MYR 5,000 per MT, snapping five sessions of gains and pulling back from their highest level since December of 2024. Traders booked profits amid weaker soyoil prices on the Dalian and Chicago markets. Crude oil also eased ahead of an expected announcement from Washington on potential new sanctions against Iran, reducing support for competing vegetable oils. Ample supplies added further pressure, with Malaysian palm oil inventories rising to a five-month high in July. Meanwhile, cargo surveyors estimated that palm oil shipments for August 1–20 fell between 5.5% and 13.2% from the same period in July, pointing to softer export momentum. Still, losses were limited by a weaker ringgit, while buyers in top supplier Indonesia stepped up purchases ahead of the full implementation of the B50 biodiesel mandate in October. Concerns that a developing El Niño could intensify dryness and curb output in Indonesia and Malaysia also provided underlying support.
USDA monthly COF report: cattle on feed up 2%... USDA Friday afternoon reported cattle and calves on feed for the slaughter market in the U.S. for feedlots with capacity of 1,000 or more head totaled 11.1 million head on August 1. The inventory was 2 percent above August 1, 2025. Placements in feedlots during July totaled 1.42 million head, 11 percent below 2025. Net placements were 1.37 million head. Placements were the lowest for July since the series began in 1996. During July, placements of cattle and calves weighing less than 600 pounds were 310,000 head, 600-699 pounds were 215,000 head, 700-799 pounds were 320,000 head, 800-899 pounds were 322,000 head, 900-999 pounds were 185,000 head, and 1,000 pounds and greater were 70,000 head. Marketings of fed cattle during July totaled 1.62 million head, 7 percent below 2025. Marketings were the lowest for July since the series began in 1996. Other disappearance totaled 55,000 head during July, 8 percent above 2025.
Cattle futures prices at eight-month lows… October live cattle on Friday fell $0.075 to $217.925 and hit an eight-month low early on. For the week, October cattle were down 95 cents. September feeder cattle rose $0.10 to $329.025 and also hit an eight-month low early on. On the week, September feeders were down $5.475. Cattle futures traders were blindsided and spooked by Friday’s news that President Trump said he would allow up to 300,000 MT of ground beef to be imported into the U.S. without impacting tariff quotas as a part of a 90-day deal aimed at bringing down beef prices. However, the psychological shock of the matter had worn off by the close and sharp early losses were erased. In other news, the detection of New World Screwworm in the Mexican state of Sonora on Wednesday threatens to complicate the planned Aug. 24 reopening of the U.S.-Mexico border to Mexican cattle imports. Cattle futures were also pressured by lower cash cattle trade last week. USDA at midday Friday reported more active cash cattle trading taking place at lower money, with steers averaging $225.29 and heifers averaging $225.23. The agency reported cash cattle trading the week prior averaged $228.52.
Lean hog futures hit 12-month low… October lean hog futures on Friday rose $0.65 to $80.875 and hit a 12-month low early on. For the week, October hogs were down 88 1/2 cents. The lean hog futures market saw short covering following recent losses. Prices are still in a downtrend on the daily bar chart. Also, the cash hog market is still trending down as seasonals suggest higher slaughter numbers in the coming weeks. The latest CME lean hog index was down 24 cents to $93.72. Today’s projected CME index price is down another 46 cents at $93.26. The national direct five-day rolling average cash hog price quote for Friday was $93.35.