Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CDT, July corn was steady after hitting a more-than-four-month low early on. July soybeans were up 4 1/2 cents after sinking to a nearly two-month low overnight. July soybean meal was down $0.70. July bean oil was 109 points higher. July SRW was 3/4 cent down and hit a six-week low. HRW wheat futures were 2 1/4 cents lower and also hit a six-week low overnight. Grain market bulls are on the ropes at mid-week. More and more, it appears that it’s going to take a significant U.S. weather-market scare in corn and/or soybeans in the coming weeks to pull the grain futures markets out of their tailspins. More years than not, some degree of a weather-market rally does occur in the grain markets in the summertime. And a summertime weather-market rally is overdue. The key outside markets today see the U.S. dollar index slightly up, while Nymex WTI crude oil prices are solidly higher and trading around $96.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.483%.
Latest on U.S.-Iran war…
-- U.S., Iran exchange military strikes to put fresh strains on ceasefire
-- Kuwait suspends flights after Iranian attack damaged airport
-- Crude oil extends gain as U.S.-Iran clashes cloud outlook for peace deal
U.S. forces intercepted Iranian ballistic missiles and drones aimed at neighboring Middle East countries and struck a command center in Iran in response. The exchange followed days of Israeli military escalation against Iran-backed Hezbollah in Lebanon, prompting a phone call between President Donald Trump and Israeli Prime Minister Benjamin Netanyahu that was reportedly intense. Tensions remain high after the U.S. attacked Iranian radar and command-and-control sites, with Iran trying to target an air base in retaliation and the U.S. and Israel having different ideas about what an end to the war should look like. “The U.S. president also faces the challenge of convincing observers — including oil-market traders — that he can break the conflict’s recurring cycle of escalation and diplomacy,” Bloomberg reported.
More stormy weather over the Plains, Midwest… The National Weather Service today said repeated rounds of showers and thunderstorms are forecast across the Plains and the southern Rockies. These storms may become strong to severe and produce large hail and severe wind gusts, leading to slight risk (level 2/5) of severe thunderstorms across parts of the Northern Plains into the upper Mississippi Valley. Localized flooding may occur over west Texas into New Mexico, as well as the eastern Dakotas. On Thursday, a secondary front will reinforce additional rounds of showers and thunderstorms across the Plains and Northern Rockies. This will bring a continuation of flooding and severe thunderstorms concerns in the Plains, upper Midwest, and Texas. Farther east, high pressure centered over Ohio Valley and Mid-Atlantic will maintain generally dry and stable conditions across much of eastern U.S. through Thursday.
New World Screwworm cases getting closer to U.S. southern border… A New World Screwworm case was found in Mexico just 25 miles from the U.S. border, USDA Secretary Brooke Rollins said Tuesday. The detection of the flesh-eating parasite in a five-year old goat in Mexico’s Coahuila state is the closest confirmed case to the U.S. border during the most recent outbreak, Reuters reported. The detection came after USDA last Friday said a case of NWS had been found in a sheep in Mexico 31 miles from the U.S. border. The U.S. border with Mexico has been closed to cattle imports since July due to the screwworm outbreak, a factor that has helped drive up prices for feeder and live cattle.
U.S. ramping up its tariff threats… The U.S. is proposing new tariffs of at least 10% on imports from 60 trading partners “in President Trump’s biggest move to rebuild his protectionist wall since his earlier levies were struck down by the Supreme Court,” Bloomberg reported. Following an investigation into how trade partners handle goods allegedly produced by forced labor, a 10% tariff rate would apply to imports from Canada, Mexico, the European Union, Taiwan and the UK, among other places, according to a statement late Tuesday from the Office of the U.S. Trade Representative. Products from other major economies, including China, India, Japan, South Korea, Brazil and Switzerland, would be subject to a 12.5% levy. USTR said it was imposing the lower rate on goods from economies that impose prohibitions on forced labor imports or have committed to doing so. Beijing denied the allegations and criticized Trump’s move.
Canada warns trade talks with U.S. could get rough… Canada made new and detailed proposals on trade to the U.S. based on negotiating progress in recent weeks, said Canadian cabinet minister Dominic LeBlanc and as reported by Bloomberg. “A strong, prosperous Canadian economy is good for North America, and we discussed how we can work together on a number of issues that strengthen the competitiveness of the North American economy,” he said at a press conference in Washington after a meeting with U.S. Trade Representative Jamieson Greer. LeBlanc refused to share details of the proposals but downplayed suggestions that Canada was being left behind Mexico. Discussions with U.S. policymakers will continue in the coming days — but he also warned that talks could still take a negative turn and that “turbulence” is to be expected. “All of us know that the road to conclusions in these conversations is sometimes not a straight line,” said LeBlanc, a longtime politician and senior cabinet minister who’s responsible for Canada-U.S. trade.
U.S. ADP jobs data out today… The U.S. economic data point of the day Wednesday is the ADP private-sector employment report for May, which is seen coming in at up 110,000 jobs in the month. The April ADP report showed a rise of 109,000 jobs. It’s “jobs week” for the U.S. marketplace, with a slate of indicators on the labor market culminating on Friday with the government’s official report on employment for May, issued by the Labor Department. The median estimates in a Bloomberg survey of economists see the unemployment rate holding steady at 4.3% in May, while payrolls are expected to rise by 89,000 jobs.
U.S. seeking public comments on U.S.-China Board of Trade… The Trump administration is seeking public comments on its plans to create a Board of Trade to manage economic ties with China. The Office of the U.S. Trade Representative is seeking comments by July 10 after placing a notice in the Federal Register. The move to create a Board of Trade comes after President Trump and Chinese counterpart Xi Jinping agreed to create the board during a high-profile summit in Beijing in mid-May.
OECD warns of global recession, rising inflation… The Paris-based OECD think tank says the conflict in the Middle East could trigger world economic recessions and significantly stronger inflation, with price pressures and weakened demand set to be felt for some time. The organization presented a scenario of prolonged confrontation and economic fallout that would trigger the deepest global slowdown for 40 years, outside of the Covid pandemic and the 2009 financial crisis. The OECD warned that policy decisions will be particularly difficult, with fiscal expansions likely to shoulder most of the burden, but governments having little space to intervene due to elevated public debt. Should disruptions persist into 2027, global growth would slip to 1.8%, tipping some economies into or close to recession, driving up unemployment, weakening investment — including in artificial intelligence — and increasing the risk of repricing on financial markets, the OECD said.
Malaysian palm oil futures gain… Malaysian palm oil futures rose more than 1% to near MYR 4,600 per MT Wednesday, bouncing back from subdued trade as markets reopened after a long holiday. Support came from a weaker ringgit, firmer Chicago soyoil, and elevated crude oil prices amid stalled U.S.–Iran talks that reinforced biodiesel demand prospects. In top buyer India, palm oil purchases edged higher in May from April’s four-month low but remained below typical levels. Meanwhile, Indonesia, the world’s largest producer, exported 7.72 million MT of crude and refined palm oil during the first four months of 2026, up 20.4% from a year earlier, according to official data. However, gains were limited by weakness in edible oils traded on China’s Dalian exchange. Concerns over soft export demand also persisted, with cargo surveyors reporting that Malaysian palm oil shipments during May 1–25 fell between 14.5% and 18.0% from April levels, partly reflecting the absence of festive buying demand.
Feeders lead cattle futures markets to the downside… August live cattle on Tuesday fell $0.95 to $239.65, ending nearer the daily high. August feeder cattle lost $3.125 to $348.425 and closed at a nine-week low close. The cattle futures markets saw renewed technical selling pressure as both markets are in downtrends on their daily bar charts. New World Screwworm was found in Mexico within 25 miles of the U.S. border, USDA Secretary Rollins said Tuesday. This is the closest confirmed case to the U.S. border during the most recent outbreak. USDA at midday Tuesday reported very light cash cattle trading at $255.00. Last week’s average cash trading price was $256.86-- down $3.63 from the prior week’s average.
Lean hog futures gain on short covering, perceived bargain buying… August lean hog futures on Tuesday $1.375 to $98.975 after hitting a six-month low early on. The hog futures market saw short covering and perceived bargain hunting amid a steep price downtrend in place on the daily bar chart. The market had become technically oversold on a near-term basis. Near-term charts remain bearish, although good follow-through buying today would suggest the bears have become exhausted. The latest CME lean hog index is up 11 cents at $91.51. Today’s projected cash index price is up 29 cents at $91.65. The national direct five-day rolling average cash hog price quote Tuesday was $94.26.