Good morning!
Grain futures weaker overnight… At 6:00 a.m. CDT, July corn was down 1 3/4 cents and scored a new contract low. July soybeans were down 3/4 cent. July soybean meal was up $2.40. July bean oil was 151 points down and hit a six-week low. July SRW wheat was down 4 1/4 cents and July HRW was 3 cents lower. Grain market bears are now peering over the horizon, weather-wise, and seeing extended forecasts for the Midwest that are reaching out into early July—with no significant weather perils seen for the U.S. corn and soybean crops. That has the speculative bears very confident and willing to further push the short sides of the grain futures markets. That can also be read as hubris. In just one-month’s time the grain markets have pivoted from firmly bullish to firmly bearish. However, such is also a reminder that grain market prices could again pivot just as quickly, from bearish to bullish, as the most critical growing months of the season for U.S. corn and soybeans lie just ahead, in July and August, which are usually the hottest and driest months of the growing season. The key outside markets today see the U.S. dollar index slightly down, while Nymex WTI crude oil prices are lower, hit a seven-week low and are trading around $84.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.47%.
New World screwworm cases detected in U.S. now total 9… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website now reports nine total New World screwworm detected cases, in Texas and New Mexico. Meantime, Oklahoma officials are working with USDA to monitor the spread of NWS. “The Oklahoma Department of Agriculture, Food and Forestry (ODAFF) is working with the USDA to monitor the spread of NWS. No confirmed cases have been found in Oklahoma, but ODAFF is taking measures to avoid the spread just in case,” said the agency and as reported by Oklahoma News 4. Any species that comes from a NWS infested zone will need to meet the movement requirements for that state as well as obtain a permit from the Oklahoma State Veterinarian’s office, said the report.
Latest on U.S.-Iran war…
- Trump says Iran deal is close after scrapping new military strikes
- U.S.-Iran deal slowed by web of go-betweens facilitating peace talks
- Oil and gas prices extend slides on optimism over U.S.-Iran peace deal
- Benchmark Brent crude oil falls to over 3-month low on peace prospects
President Trump pulled back threatened military strikes against Iran in a stark reversal that came just hours after he vowed to hit the Islamic Republic “VERY HARD” and threatened to seize its oil infrastructure. Trump announced on social media the attacks were off, claiming again that a deal was close — without any confirmation from Iran, and described it as “a very strong memorandum of understanding that is a little conceptual,” which would restart shipping in the Strait of Hormuz. Iran’s semi-official news agency Fars said earlier Thursday that officials had not yet approved the text of any agreement with the U.S., citing an unnamed source, and talks remain stuck over several key issues, including the release of frozen Iranian funds and Iran’s demand for a ceasefire in Lebanon.
Cooler weather coming to the Plains, Midwest… The National Weather Service today said a cold front accompanied with a stronger surge of cool air from Canada will plunge into the mid-section of the country in the coming days. Temperatures behind this front will drop well down into the 40s across the northern U.S. by Sunday morning. As the cold front plunges southward, it will interact with a low-pressure wave located over the central Plains to trigger a round of strong to severe thunderstorms together with heavy rainfall. The timing of the inclement weather is forecast to begin during the day on Saturday over the central Plains, expanding toward the southern Plains, into the mid-Mississippi Valley and Midwest Saturday night into Sunday morning. Meantime, a heat wave is baking the Southeast. (See next item just below.) Elsewhere, a round of generally light rainfall is expected tonight into Saturday morning across Montana associated with the second cold front. Some monsoonal type of showers are forecast to emerge over the Four Corners and southern Rockies later on Saturday.
U.S. declares power emergency in Southeast… The Trump administration has declared a power emergency in the southeastern US as weather forecasters warned of dangerous heat that’s likely to stress power grids along the East Coast. “An emergency order issued by the Energy Department on Thursday allows Duke Energy Corp. to operate power plants at their maximum output levels and exceed certain air pollution limits, as part of efforts to boost generation to meet soaring demand in North and South Carolina. The order is in effect through Friday night,” said a Bloomberg report. “The order will mitigate the risk of unnecessary blackouts brought on by unusually high load forecasts and high temperatures across the region,” the Energy Department said in a statement.
Trump administration gets court win on tariffs… The Trump administration scored a key procedural victory over a group of states and small businesses challenging the 10% global tariffs instituted in February, after a federal appeals court ruled the government can enforce the levies while the fight plays out. The U.S. “made a sufficient showing” that it’s likely to win the dispute over President Donald Trump’s use of Section 122 of the Trade Act of 1974 to issue tariffs, a federal appeals court in Washington held Thursday, according to Bloomberg. Allowing the tariffs to continue for now is “warranted under the circumstances,” the court said. The administration imposed the Section 122 duties in February after the U.S. Supreme Court vacated earlier levies he’d imposed under the International Emergency Economic Powers Act, or IEEPA.
SpaceX stock to begin trading today… Shadow markets are pricing a SpaceX stock debut with a potential pop of at least 35%. Derivatives and perpetual futures markets are implying a market value of over $2.3 trillion, with prediction markets giving 70% odds of SpaceX stock closing above $2 trillion in total value on its first day. SpaceX on Thursday said it sold $75 billion worth of shares, marking the largest initial public offering, or IPO, in history. The pricing indicates strong investor appetite for assets at the intersection of AI and space infrastructure, which could bode well for upcoming initial public offerings and set a precedent for future mega-IPOs.
Malaysian palm oil futures firmer… Malaysian palm oil futures edged higher to above MYR 4,550 per MT Friday, extending recent gains. The market was also on track for a fourth straight weekly advance, up around 0.3% so far this week. Sentiment remained supported by stronger export demand, with cargo surveyors estimating that Malaysian palm oil shipments during June 1–10 rose between 3.5% and 4.9% from the same period a month earlier. Traders also tracked weather risks after Kuala Lumpur warned that El Niño could cut yields by 8% to 10% this year. However, upside was capped by a stronger ringgit and weaker rival oils in Dalian and Chicago markets. Meanwhile, crude oil continued to slide, as Middle East tensions eased, reducing support for vegetable oils. On the demand side, imports by top buyer India grew slightly in May from April’s four-month low but stayed below normal levels. Separately, industry data showed Malaysia’s inventories increased for a second month in May, underscoring ample supply.
Cattle futures markets on three-day winning streak… August live cattle on Thursday rose $1.175 to $242.675. August feeders gained $5.275 to $359.65 and hit a three-week high. The cattle futures markets saw a third straight day of gains amid U.S. cattle supply concerns. The current total of screwworm cases in the U.S. now stands at seven, with five now confirmed in cattle. Secretary Rollins was scheduled to speak in Texas today at an event where sterile fly dispersal will take place. USDA at midday Thursday reported very light cash cattle trading this week, averaging $254.15. The agency on Monday reported last week’s average cash cattle trading price was $256.53—down 33 cents from the week prior.
Lean hog futures bears take a respite… August lean hog futures on Thursday rose $0.475 to $95.90. The hog futures market paused as the technical sellers took a respite. Near-term technicals remain bearish as a price downtrend remains in place on the daily bar chart. The market is still short-term oversold, technically, and due for a decent corrective bounce. The latest CME lean hog index is up 16 cents at $92.92. Today’s projected cash index price is down 2 cents at $92.90. The national direct five-day rolling average cash hog price quote Thursday was $96.67.