Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, May corn was down 1 1/4 cents. May soybeans were 3 3/4 cents lower. May soybean meal was up $1.30 and May bean oil was 40 points lower. May SRW wheat was up 1/4 cent and May HRW wheat was 1/2 cent lower. The grain market bulls at mid-week are working to stabilize their markets after early-week backslides that still have them on their heels. That means the bearish speculators could be more aggressive on the short sides in the near term. The key outside markets today see the U.S. dollar index slightly up, with Nymex crude oil prices lower and trading around $94.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.2 percent.
Latest on the war in Iran…
--Iranian attacks in the Persian Gulf continued with a fresh wave of missiles and drones, targeting the UAE, Saudi Arabia and Kuwait.
--The attacks followed Iran’s confirming the assassination of its security chief, Ali Larijani, in an Israeli strike. Also, Israel says Iranian Intelligence Minister Esmail Khatib has been killed. Israel’s killing the two officials leaves Iran’s wartime leadership largely in the hands of hardliners who may be less likely to seek a diplomatic pathway out of the war.
--Trump said the U.S. would soon be ready to end the war: “We’re not ready to leave yet. But we’ll be leaving in the near future.”
--Israel has stepped up an offensive in Lebanon, where strikes have killed more than 900 people, according to the Lebanese government.
--Iran has been moving its crude through the Strait of Hormuz at rates broadly comparable to before the war began.
--Oil prices dip as Iraq signed a deal to resume exports via Turkey that avoid the Strait of Hormuz, and as the U.S. stepped up efforts to force the reopening of the key waterway.
-- U.S. to ease Venezuela sanctions to unlock more oil amid Middle East war
--China to tap its vast crude oil stockpiles to offset Iran crisis
FOMC meeting ends today; likely no change in U.S. monetary policy… Traders and investors will be looking to Federal Reserve Chair Jerome Powell for insight on how the U.S. central bank is weighing risks to the economy amid war in the Middle East. Fed officials are expected to keep interest rates steady and release fresh economic projections that could reveal how they’re interpreting recent economic data and geopolitical events. Powell will hold a press conference early this afternoon, where he will likely emphasize that Fed officials need more time to see how long the U.S. conflict with Iran lasts and to assess how it might impact economic growth and inflation. “Bond traders are scaling back aggressive bets that had driven markets to price out Federal Reserve interest rate cuts this year. The market has shifted back to pricing at least one quarter-point cut by the end of 2026, after a sell off in short-end Treasuries accelerated due to inflationary worries fueled by oil topping $100 a barrel,” said a Bloomberg report.
U.S. producer price index on deck, too… This morning’s producer index is expected to rise by 0.3%, month-over-month, in February—below the 0.5% rise in January and the least in three months. Core PPI, which excludes food and energy, is also forecast to increase by 0.3%, compared with a 0.8% jump in the previous month. On an annual basis, headline producer inflation is projected to remain at 2.9%, the same as in January. Core producer inflation is expected to edge up to 3.7%, which would be the highest reading since March of last year and compares to 3.6% in January.
Very warm weather from West to spread eastward… The National Weather Service today said a strong and persistent upper-level high pressure system is forecast to further expand and remain nearly stationary over the desert Southwest. This weather pattern, more indicative of a summer regime than spring, will allow a highly unusual heatwave to begin to intensify across the western U.S. so early in the season.Progressively intense summer-like heat temperatures across California and into the Great Basin/desert Southwest early this week will expand eastward into the Rockies and then the Great Plains by Thursday.New daily and even monthly record highs for March will likely establish at many locations as temperatures soar into the 80s, 90s, and even the 100s in the Desert Southwest.The heat wave looks to continue into the weekend before conditions begin to return closer to average early next week. Most of the country will be relatively quiet precipitation-wise the next couple of days. Meanwhile, critical fire weather concerns have shifted into Wyoming today and is expected to last into early on Friday as dry, gusty and warm downslope winds develop.Strong and gusty downslope winds are forecast across Montana on the southern side of the clipper system.
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Malaysian palm oil futures dip… Malaysian palm oil futures slipped for a second session on Wednesday, hovering below MYR 4,550 per MT and pressured by a stronger ringgit and weakness in rival edible oils on Dalian and Chicago exchanges. Meanwhile, industry veteran Dorab Mistry cautioned that global edible oil markets remain volatile, with Middle East energy disruptions boosting biodiesel demand expectations but subdued buying from key importers clouding the outlook. Geopolitical risks, including a possible delay of the Trump–Xi summit later this month, also weighed. Still, losses were capped by signs of firm demand, as cargo surveyors noted March 1–15 shipments surged 43.5%–56.9% mom on Eid-related buying. Meanwhile, palm oil imports by India, the main buyer, rose 11% in February to hit a six-month high, aided by discounts to rival oils. Meanwhile, top producer Indonesia is considering new commodity taxes, including on palm oil, to keep its budget deficit within 3% of GDP, a step that may constrain global supply.
Cattle futures markets once again show keen resilience… April live cattle on Tuesday rose $1.975 to $235.225. March feeders gained $4.35 to $359.80. The cattle futures markets continued good corrective rebounds amid perceived bargain hunting. Once again, the cattle bulls have shown keen resilience when their chips get down. Better risk appetite in the general marketplace so far this week was also a positive for the cattle futures markets. Work has stopped at the Greeley, Colorado JBS facility amid a union strike. The company is shifting cattle deliveries to facilities in Grand Island, NE and Cactus, TX. Cattle traders will continue to closely monitor this situation. USDA Monday reported lower cash cattle trading last week, with the average price of $234.83—down $5.11 from the week prior. In the Plains states, high temperatures will reach the lower 100’s in some places in the southwest this Friday and Saturday. The heat will notably stress livestock, especially after the rapid change from early-week unusually cold weather.
Lean hog futures pause… April lean hog futures on Tuesday rose 22 1/2 cents to $93.725. Hog futures so far this week are pausing as bulls work to stabilize the market after recent selling pressure. This week’s minor gains in hog futures prices, amid solid gains in the cattle futures, is not a good sign for hogs. The near-term technical posture of the lean hog futures market has deteriorated the past two weeks. The latest CME lean hog index is up 16 cents at $91.76. Today’s projected cash index price is up another 10 cents at $91.86. The national direct five-day rolling average cash hog price quote Tuesday was $69.80.