Good morning!
Grain futures lower overnight… As of 6:00 a.m. CDT, July corn was down 5 1/2 cents. July soybeans were down 8 3/4 cents. July soybean meal was down $3.20. July bean oil was off 31 points. July SRW was 8 3/4 cents lower and HRW wheat futures were down 6 cents. Solid losses in the crude oil market are helping to pressure the grain markets to start this holiday-shortened trading week. Growing weather in the Corn Belt also leans price-bearish for corn and beans, amid no threatening conditions at present. On tap today are the weekly USDA export inspections report this morning and the weekly USDA crop progress reports this afternoon. The key outside markets today see the U.S. dollar index modestly down, while Nymex WTI crude oil prices are solidly lower and trading around $92.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.5%.
Latest on U.S.-Iran war…
--U.S. and Iran clash near Hormuz even as both tout peace talks progress
--Trump says Iran talks ‘proceeding nicely’ as peace deal appears closer
--Trump pushes Saudis to recognize Israel as part of Iran deal
--European gas prices drops as U.S. signals progress toward deal with Iran
--Rubio sees good news coming on Hormuz as Iran talks continue
U.S. and Iranian forces clashed near the Strait of Hormuz overnight, highlighting the tension between the two sides even as they tout progress toward an interim peace deal. The U.S. military said it conducted self-defense strikes in southern Iran, targeting missile-launch sites and boats attempting to lay mines, while the Islamic Revolutionary Guard Corps said it fired at an F-35 fighter jet and several drones. Meantime, President Trump said negotiations with Iran over an interim deal to extend their ceasefire and reopen the Strait of Hormuz were “proceeding nicely.” An Iranian delegation traveled to Doha for consultations with senior Qatari officials on the negotiations, including discussions on the release of frozen Iranian funds. The U.S. and Iran still need to finalize key details, including whether ships transiting the Hormuz Strait will be allowed free passage and how quickly billions of dollars of Iranian funds will be unfrozen.
Hot weather coming to Plains, Midwest … The National Weather Service on Tuesday said unseasonably hot weather will persist across the northern Plains and upper Midwest through mid to late week. High temperatures are expected to soar well into the 80s and 90s Tuesday, Wednesday, and Thursday, with a few places across eastern Montana possibly nearing 100 degrees. The Weather Prediction Center continues to highlight widespread moderate to major levels of heat risk for a large portion of the northern Plains and Upper Midwest. A frontal system dropping southward out of Canada may spark a few showers and thunderstorms later this afternoon and evening, but this is unlikely to bring much in the way of relief from the heat heading into the middle part of the week. Severe weather will be possible across parts of western and southwestern Texas later this afternoon and evening. The main hazards for strong to severe thunderstorms would include large hail, damaging winds and isolated tornadoes.
With Warsh at the Fed’s helm, bond traders foresee U.S. rate hikes… “As Kevin Warsh takes the helm at the Federal Reserve, bond investors are betting he’ll prioritize the central bank’s inflation-fighting credibility over President Donald Trump’s push for lower interest rates. With the Iran war unleashing the biggest inflation surge since 2023, traders are pricing in that the Fed is virtually certain to start raising rates by December. That’s a sharp reversal from just three months ago, when markets were betting there were deeper cuts ahead,” said a Bloomberg report on Monday. “The shift reflects the impact of turmoil in the Middle East, the resilient U.S. economy and an AI-investment boom pushing the stock market higher, all of which have fueled concerns that inflation could remain stuck above the Fed’s 2% target for some time,” said the report. However, Kevin Hassett, President Trump’s chief economic adviser at the White House, signaled he’s confident that an eventual drop in oil prices will create space for the Federal Reserve to lower interest rates. The White House expects energy prices to drop once there’s a deal with Iran, Hassett said on Fox News’ Sunday Morning Futures.
Brazil prosecutors suing to ban glyphosate weed killers… Brazilian prosecutors are suing health agency Anvisa and the federal government to ban the use of glyphosate, “citing risks to human life, occupational health and the workplace environment,” said a Bloomberg report. “The lawsuit seeks to ban the registration of products containing glyphosate and its derivatives, and to prohibit authorization for the production, export, import, sale and use of the active ingredient and its compounds. An effective cancellation of glyphosate’s registration in Brazil would hit companies such as Germany’s Bayer AG, which has used the active ingredient in some formulations since its patent expired,” said the report.
China eases its monetary policy… China let the interest rate on a one-year policy loan to banks decline to a record low, a sign Beijing is stepping up efforts to support an economy that’s losing momentum. Some banks borrowed from the People’s Bank of China’s one-year medium-term lending facility at rates as low as 1.45% in May, down from 1.5% in April. The decline in borrowing costs comes as China’s economy shows signs of faltering after a strong first quarter, with growth slowing across the board in April.
China cracks down on cross-border stock trading… China’s crackdown on cross-border stock trading may affect as much as HK$250 billion of assets in Hong Kong, according to Citic Securities. The move is Beijing’s most aggressive attempt yet to curb citizens from accessing overseas markets outside approved channels, under the nation’s strict capital controls. Existing investors may continue to access their accounts but will only be allowed to sell assets and withdraw funds during the two-year transition period, with purchases and fund deposits prohibited. Chinese regulators last Friday announced the surprise campaign against illegal cross-border trading, saying they planned to penalize brokerages including Futu, Tiger Brokers and Long Bridge Securities Ltd. for operating on the mainland without licenses and confiscate what they described as “illegal gains” from their domestic and offshore entities.
Energy price spike hamstrings India’s economy… India’s top officials are trying to allay concerns about their economy as soaring oil prices affect financial markets and the Indian currency. Finance Minister Nirmala Sitharaman defended Prime Minister Narendra Modi’s call for austerity to save foreign exchange amid surging oil import bills, saying domestic economic conditions remain resilient. Reserve Bank of India Governor Sanjay Malhotra said the rupee may be undervalued and authorities would take necessary measures to curb speculation in the foreign exchange market. India has been among the economies hardest hit by the Middle East conflict because of its reliance on energy shipments through the Strait of Hormuz.
Monthly USDA cattle-on-feed report leans price-bearish… USDA Friday afternoon reported cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.6 million head on May 1, 2026. The inventory was 2 percent above May 1, 2025 and slightly higher than market expectations. Placements in feedlots during April totaled 1.70 million head, 6 percent above 2025 and well above market expectations. Net placements were 1.65 million head. During April, placements of cattle and calves weighing less than 600 pounds were 330,000 head, 600-699 pounds were 245,000 head, 700-799 pounds were 390,000 head, 800-899 pounds were 457,000 head, 900-999 pounds were 210,000 head, and 1,000 pounds and greater were 70,000 head. Marketings of fed cattle during April totaled 1.64 million head, 10 percent below 2025, in line with market expectations. Other disappearance totaled 52,000 head during April, 4 percent above 2025.
Malaysian palm oil futures gain… Malaysian palm oil futures rose modestly to near MYR 4,500 per MT Tuesday, rebounding from prior losses amid a weaker ringgit and firmer edible oils on the Dalian exchange. Crude oil strength also provided support after U.S. defensive actions in southern Iran boosted the broader vegetable oil complex. Meanwhile, the top producer, Indonesia, exported 2.17 million metric tons of palm oil products in March, down from 2.88 million tons in March 2025, according to an industry association. Jakarta plans to route commodity shipments through a state-run firm starting September, a move seen as potentially aiding Malaysian flows in the interim. However, gains were capped by weak exports. Cargo surveyors noted that Malaysian palm oil exports for May 1–25 fell between 14.5% and 18.0% from April. Demand prospects from India, the world’s largest palm oil importer, also remained uncertain after imports plunged 26% in April to a four-month low. Markets will be closed on Wednesday for a holiday.
Cattle futures bulls losing their grip… June live cattle futures on Friday rose $0.15 to $249.30 and for the week were down $4.60. August feeder cattle futures Friday lost $6.675 to $349.85, hit a two-month low and for the week were down $11.60. The steep downdraft in the feeder cattle futures market late last week, in which heavy profit taking and weak long liquidation were featured, also limited buying interest in live cattle futures. August feeders are now trending down on the daily bar chart and combined with Friday’s bearish weekly low close will likely see follow-through selling pressure this week. Cash cattle prices also slipped late last week. USDA at midday Friday reported active cash cattle trading, with steers averaging $260.88 and heifers $260.85. The agency reported cash trading the week prior averaged $262.85.
Lean hog futures bears keeping a firm grip… June lean hog futures on Friday rose $0.625 to $95.75 and for the week were down $3.00. The lean hog futures market paused Friday, following last week’s steep downdraft that drove prices to a five-month low last Thursday. Bears are in firm technical control amid a price downtrend firmly in place on the daily bar chart. The latest CME lean hog index is up 7 cents to $91.07. Today’s projected cash index price is down 19 cents to $90.88. The national direct five-day rolling average cash hog price quote for Friday was $93.57.