Good morning!
Grain futures prices steady-mixed overnight… As of 6:00 a.m. CDT, December corn futures were up 1/2 cent, November soybeans down 3/4 cent and winter wheat futures were around 5 to 6 cents lower. After making a stand in mid-July and showing impressive price gains, the grain market bulls are fading again. The bulls need to defend solid chart support levels just below current prices, to fend off stronger technical selling pressure from the speculators, including from the funds, if those chart support levels are breached. The key outside markets today see the U.S. dollar index slightly higher and hitting a five-week high overnight. Nymex crude oil prices are near steady and trading around $66.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.408 percent.
Stormy in the Plains, sweltering in central and eastern United States… The National Weather Service early today reports severe thunderstorms and excessive rainfall are possible across portions of the Northern/Central Plains today. Storms starting in eastern Montana are forecast to sweep across parts of the Dakotas, Wyoming, Nebraska and Iowa by Wednesday morning. Slight risks of excessive rainfall (at least 15% chance) and severe thunderstorms (level 2/5) are in effect for many of the aforementioned areas, with damaging winds and hail possible. Storms are then expected to pick back up again over the Midwest on Wednesday, with flash flooding possible. Meantime, a strong upper ridge will continue to generate a dangerous and prolonged heatwave across the central and eastern U.S. through the end of the month. Daily high temperatures will be well into the 90s and 100s, with little to no overnight relief. The heat is also likely to break daily temperature records through the week, said the NWS.
USDA weekly crop progress data shows U.S. corn, soybean crops in good shape… USDA’s weekly crop progress reports Monday afternoon showed the condition of the U.S. corn crop declined 1% in the good to excellent category, to 73%. Ten states showed corn condition improved last week and 8 showed the corn condition declined. “Corn continues to perform much better than the long-term average,” reported Pro Farmer crop consultant Michael Cordonnier. The U.S. soybean crop improved 2%, to 70% good to excellent condition. Ten states showed the soybean condition improved last week and 8 states showed the soybean condition declined. Cordonnier left his 2025 U.S. corn yield estimate unchanged this week at 182.0 bu/ac, with a neutral bias going forward. His 2025 U.S. soybean yield was also left unchanged at 52.5 bu/ac, with a neutral bias going forward. USDA also reported the U.S. winter wheat crop is 80% harvested, with spring wheat 1% harvested. The spring wheat crop was reported in 49% good to excellent condition, and in 18% poor to very poor condition.
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Trump throws cold water on meeting with China leader Xi Jinping… Posting on social media late Monday in Scotland, President Trump said he is not seeking a summit with Chinese leader Xi but is considering going to China at Xi’s invitation. This comes as U.S. and China trade officials are meeting this week in Stockholm, Sweden. “Trump is facing increased criticism from China hawks in Washington that he’s conceding too much to secure a breakthrough with Xi on trade,” reports Bloomberg. U.S. and Chinese officials Tuesday started a second day of talks aimed at extending their tariff truce beyond a 90-day period that expires in two weeks.
Did the U.S. get the better end of the trade deal with the EU?... The currency markets think so. The U.S. dollar index overnight climbed to a five-week high, while the Euro currency dropped below $1.16. The Euro extended Monday’s 1.3% decline, which was the sharpest one-day drop in over two months and hit its weakest level since June 20. “There is growing investor concern that the newly announced trade deal between the U.S. and the European Union disproportionately benefits the U.S., offering little to improve the eurozone’s economic outlook,” reports TradingEconomics.com.
Fidelity: gold prices could hit $4,000 an ounce… Gold could hit $4,000 an ounce by the end of 2026, according to Fidelity International. That’s due to Federal Reserve interest rate cuts and central banks adding gold to their holdings. Fidelity International’s Ian Samson said the firm remains bullish on gold, citing a clearer path to a more dovish Federal Reserve and the potential for a softer U.S. dollar. Samson said gold’s appeal as a hard asset will continue to be reinforced by growing fiscal deficits, and said the precious metal is not necessarily overstretched in the context of a bull run.
Federal Reserve’s FOMC meeting on deck… The Federal Reserve’s Open Market Committee (FOMC) meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Jerome Powell.The Fed is widely expected to leave its benchmark Fed funds rate range unchanged this week. However, after being admonished by President Trump to lower U.S. interest rates, many market watchers think Powell might indicate at this meeting the Fed could lean easier on the Fed’s monetary policy intentions this fall.
Palm oil futures rebound… Malaysian palm oil futures snapped a two-session losing streak Tuesday and hovered around MYR 4,260 per MT. The market was supported by a weaker ringgit and gains in Dalian soyoil. Better demand from top buyer India is also expected to continue ahead of the Diwali festival in mid-October.
Cattle futures continue to set record highs… The cattle futures bulls were out of the gate strong to start the trading week Monday, following a price-friendly USDA monthly Cattle-on-Feed Report released last Friday. Some profit-taking by the shorter-term futures traders surfaced to push prices off their daily highs Monday. Live cattle futures’ discount to the cash cattle market will continue to limit selling pressure in futures. Cash cattle trading last week averaged $239.38, according to USDA, which compares to an average of $237.78 the week prior.
Lean hog futures bulls also have the edge… The lean hog futures market paused Monday but prices remain in an uptrend from the mid-July low. August hog futures’ discount to the CME cash hog index is also limiting selling interest in futures. The latest CME lean hog index is up another 33 cents to $110.28 as of July 24. Tuesday’s projected cash index price (for July 25) is up 4 cents at $110.32. The national direct five-day rolling average cash hog quote Monday was $113.39.
Today’s reports—Tuesday
1:00 p.m. Fruit and Tree Nuts Data — ERS
1:00 p.m. Vegetables and Pulses Data — ERS
2:00 p.m. Milk Production — NASS