Good morning!
Grain futures weaker overnight… At 6:00 a.m. CDT, December corn was down 1 cent. November soybeans were 6 1/2 cents lower. September soybean meal was down $1.10. September bean oil was 117 points lower and hit a seven-week low. September SRW wheat was 9 cents lower, while September HRW wheat prices were down 14 1/4 cents. It’s a “Turnaround Tuesday” so far, following Monday’s price gains in most of the grains. Veteran grain traders know the old saying that a strong bull market in the grains needs to be fed fresh, bullish fundamental news very often. And the bull markets in grains appear hungry today. There are also now very stiff overhead chart resistance levels just above present prices for corn, soybeans and winter wheat futures. Those resistance levels will need to be overcome for the bulls to gain fresh technical power and to suggest the price uptrends can be extended. Malaysian palm oil futures were closed for a holiday Tuesday. The key outside markets today see the U.S. dollar index near steady. October Nymex WTI crude oil prices are lower and trading around $83.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.69%.
Dog days of summer; scattered rains in Midwest… “The dog days of summer continue today, as warm, wet weather is in store for millions across the country,” said Weatherbug.com. Today’s weather setup is primarily shaped by two slow-moving cold fronts. One stretches across the Southeast, while the other hangs over the north-central U.S., bringing scattered soggy weather to the Southeast through the Plains and into the Upper Midwest. While possible throughout the day, the best chance for showers and thunderstorms will be in the afternoon and evening hours, as activity becomes more widespread. Monsoon season is in full swing in the Southwest U.S. as warm, humid air continues to flow into the region, which will spark storms from the Desert Southwest into the Mountain West late in the day. Meanwhile, the south-central U.S., desert Southwest, and California’s central valley will continue to scorch, with widespread temperatures soaring into the 90s and triple digits, where some spots could approach 120 degrees.
Bessent announces “economic D-day” for Iran… Treasury Secretary Scott Bessent announced Monday that the U.S. was sanctioning more than 60 entities, individuals and vessels around the world that have enabled Iran to procure nuclear and missile technology, conduct cyber operations and generate oil revenue. “Let there be no ambiguity as to the position of the United States: An economic engagement of any kind with this murderous regime will expose those responsible to the full reach of American power,” Bessent said. But a sense of ambiguity nonetheless lingered, particularly around how China, which is the destination for around 90% of Iran’s oil exports, will be treated. The Wall Street Journal noted that while the U.S. blockade of Iran’s ports and commerce may mean that China isn’t currently buying much Iranian crude, Chinese banks and other entities are still involved in repatriating revenues to Tehran. At the same time, President Trump has made improved U.S.-China relations a top priority. China has previously committed to buy 25 million metric tons of U.S. soybeans per calendar year along with $17 billion in other agricultural goods. China has been a steady buyer of soybeans in recent weeks and Chinese leader Xi Jinping is set to visit the U.S. next month. Beijing threatened to retaliate against the U.S. and signaled it won’t back away from its cooperation with Iran. China’s Foreign Ministry spokesman Lin Jian said China opposes unilateral sanctions and warned they risk worsening conflicts, and that the most urgent task is to de-escalate tensions and return to negotiations. China’s cooperation with Iran has always been conducted within the international framework and should not be interfered with or undermined, said Lin Jian.
USDA weekly crop progress updates… The portion of the U.S. corn crop rated “good” or “excellent” as of Sunday fell to 57%, USDA said Monday, down three percentage points from the previous week and the third straight weekly decline. The portion of the soybean crop rated good or excellent fell by one percentage point to 60%, also a third straight decline. For a full rundown of U.S. crop conditions and the latest Pro Farmer Crop Condition Index readings, click here. Meantime, Pro Farmer crop consultant Dr. Michael Cordonnier this week lowered his 2026 U.S. corn yield by 1.0 bushel this week to 179.0 bu/ac, with a neutral-to-lower bias. “There is very little if any upside potential for the corn yield and more downside risks once the USDA starts to weigh the corn samples,” he said in his weekly report. For U.S. soybeans, Cordonnier’s average yield was left unchanged this week at 51.5 bu/ac, with a neutral bias.
USDA to reopen 2 New Mexico ports to Mexican cattle… USDA Secretary Brooke Rollins on Monday said the U.S. would reopen two additional ports to cattle shipments from Mexico in 30-day increments after imports restarted at an Arizona port. The port in Douglas resumed trade Monday after being halted for most of the last year due to New World Screwworm. The reopening went ahead despite a screwworm case detected over the border in the Mexican state of Sonora last week. Rollins said in a news conference Monday that a second port in New Mexico will reopen in 30 days, Bloomberg reported, followed by a third port 30 days after that. The report noted that USDA had previously said it would consider reopening ports in Santa Teresa and Columbus in New Mexico but didn’t provide a timeline, while Rollins didn’t specify which of the New Mexico ports would reopen first.
Canada to announce domestic measures after new U.S. tariffs… Canada’s government today will announce a range of measures to “protect and support” its workers and businesses in response to 50% U.S. tariffs which were applied to about $20 billion of its annual exports on Saturday, said a Bloomberg report. “Finance Minister Francois-Philippe Champagne, Industry Minister Melanie Joly, Jobs Minister Patty Hajdu and Evan Solomon, the minister for artificial intelligence, will hold a press conference to outline measures at 11 a.m. Ottawa time, the Finance Department said Monday. Domestic measures will include expanded jobless benefits, people familiar with the planning said, asking not to be named because they aren’t authorized to speak publicly. Officials will also roll out loans for businesses affected by the tariffs, one of the people said — akin to coronavirus-era economic support programs. The government is calling it the “One Canadian Economy Agenda,” that person added. On Saturday, Prime Minister Mark Carney said Canada would retaliate with “dollar-for-dollar” counter-tariffs in areas including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. That pledge has already prompted a threat from President Trump to escalate by increasing automobile tariffs against Canadian vehicles and parts. Carney had a slightly more nuanced message at a press conference on Monday. “The American economy is much, much bigger, at least for the time being, than the Canadian economy,” he said in French, according to a live translator. “Because of this, it will be difficult to have dollar-for-dollar — always difficult to carry out dollar-for-dollar retaliation, so we might go the more targeted way,” before adding “everything is on the table,” said the Bloomberg report.
U.S. Treasury yields dip a bit ahead of Jackson Hole Fed meeting… The yield on the 10-year U.S. Treasury note steadied around 4.7% today as investors continued to assess the implications of the Treasury Department’s expanded debt buyback program. Reports Monday suggested the U.S. government may tap its cash account to finance the increased buybacks, marking a shift as such purchases are typically intended to be cash-neutral and have been funded through new issuance. Treasury Secretary Scott Bessent on Monday refrained from providing further signals on a potential revamp of U.S. debt management, while reassuring markets that auction sizes for bonds would not be reduced. Meanwhile, markets speculated that the plan may offer only a temporary solution, renewing concerns over the risks of a U.S. debt crisis and dollar weakness. Traders are looking ahead to Fed Chair Kevin Warsh’s Friday morning speech at the annual Jackson Hole, Wyoming, symposium this week for fresh clues on the U.S. monetary policy outlook. TradingEconomics.com
Weaker cash cattle prices pressuring futures… October live cattle on Monday fell $4.325 to $213.60 and closed at an eight-month low close. November feeder cattle lost $5.275 to $310.975 and also closed at an eight-month low close.Cattle futures saw more technical selling pressure as the charts remain significantly bearish. The Trump administration’s latest push to lower beef prices via cheaper imports still has the cattle market bulls spooked early this week, keeping them mostly on the sidelines. Lower cash cattle trading last week is also bearish for futures. Cattle futures were also under pressure as Monday marked the first day of the reopening of the southern border to feeder imports at the Douglas, Arizona, port. USDA at midday Monday reported last week’s cash cattle trading activity averaged $225.01. That’s down $3.51 from the week prior averaging $228.52. In the southern Plains states, livestock heat stress will continue this week, continuing to make weight gains a challenge.
Lean hog futures see modest short covering… October lean hog futures on Monday rose $0.25 to $81.125. The lean hog futures market saw modest short covering. Sharply lower cattle futures prices limited buying interest in hog futures. Also, the cash hog market is still trending down, which also favors the bearish camp of futures traders. The latest CME lean hog index is down 46 cents to $93.26. Today’s projected CME index price is down another 40 cents at $92.86. The national direct five-day rolling average cash hog price quote for Monday was $93.58. October lean hog futures are still in a downtrend on the daily bar chart.