Good morning!
Grain futures prices mostly firmer overnight… As of 5:30 a.m. CST, May corn was up 1 cent and hit a six-week high. May soybeans were near steady and hit a 10-month high overnight. May soybean meal was weaker but May bean oil surged to a contract and two-year high, following the spike in crude oil prices. May SRW wheat was 2 1/4 cents higher and May HRW wheat was up 6 1/4 cents. Both winter wheat markets hit eight-month highs overnight. The key outside markets today see the U.S. dollar index solidly up and hitting a five-week high, with Nymex crude oil prices sharply higher, hitting an eight-month high and trading around $72.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.96 percent.
Latest on the U.S.-Israeli war against Iran…
-- U.S.-Israeli strikes across the Middle East continue. Iran’s supreme leader killed.
--Global stocks fell today, crude oil rallied, the U.S. dollar and gold advanced.
--Kuwait said a number of U.S. fighter jets crashed. Crew members survived.
--Iran claims it shot down a U.S. fighter jet.
--Saudi Aramco halted its largest oil refinery after a nearby drone strike.
--Iran won’t negotiate with the U.S., security chief says.
--Israel bombed Beirut after Hezbollah group fired rockets and drones into Israel.
--Trump: U.S. military campaign could last several weeks but ahead of schedule.
--Dozens of oil tankers stranded in Persian Gulf as Strait of Hormuz all but closed.
Click here for Pro Farmer Editor Bill Watts’s special report and a deeper dive on the matter, and its implications on ag markets.
Marketplace adjusts interest rates outlook amid U.S.-Iran war… Money markets scaled back wagers on interest-rate cuts in the U.S., U.K. and eurozone Monday as war in the Middle East sent oil prices spiking higher and fanned inflation fears. “The chance of the Federal Reserve reducing borrowing costs three times in 2026 has dropped to 20% from almost 50% last week, according to swaps tied to policy-meeting dates. Traders no longer expect the Bank of England to deliver three reductions this year and have lowered the probability of a cut in March to 60% from more than 80%. They have halved the odds of a European Central Bank rate cut this year, pricing just five basis points,” said a Bloomberg report. “U.S., U.K. and German two-year yields — which are among the most sensitive to changes in monetary policy — have risen more than longer maturities. That reflects a sharp jump in inflation gauges,” said the report.
U.S. military action in Iran may threaten Trump-Xi summit in April… “One month before Chinese President Xi Jinping and President Trump are set to convene at a much-touted summit in China, the U.S. leader’s toppling of another friend of China risks stoking tensions between the world’s biggest economies,” Bloomberg reported Sunday. After U.S. and Israeli military strikes on Iran wiped out the Islamic Republic’s Supreme Leader, Chinese Foreign Minister Wang Yi on Sunday called it “unacceptable to openly kill the leader of a sovereign country and institute regime change.” Speaking by phone with his Russian counterpart, Wang warned that the U.S. president risked driving the Middle East into the “abyss.” Condemnation of Washington from China’s top diplomat stands out during a delicate period when officials on both sides are trying to steady relations before Trump arrives in Beijing on March 31. “Complicating that task, (Trump) has ousted two leaders with ties to Beijing in quick succession this year, after the U.S. in January snatched Venezuela’s Nicolás Maduro,” said the report.
Spring-like temps across much of the U.S. this week… The National Weather Service today said warm temperatures will be the theme of the week for most of the continental U.S. Amplified ridging will set-up across the central and eastern U.S. and effectively push a warm front through the Arctic high present across the Great Lakes. Daily high temperatures will be in the low to middle 80s across much of the South this week. By Tuesday and Wednesday, high temperatures in the middle to upper 70s will be possible farther north into the Ohio and Tennessee Valleys as the front lifts out of the region. The West will cool off as an upper trough and surface cold push through the region, but temperatures are still expected to be slightly above average. A band of rain and mixed precipitation is moving eastward across the Ohio and Tennessee Valleys. Still, winter weather advisories are in effect from Indiana eastward to Pennsylvania as areas could see a few inches of snowfall mixed with some sleet today. As the warm front brings instability across Oklahoma and Kansas, the conditions will be support some severe thunderstorms.
Extended heat wave forecast for India may damage major crops… India is forecast to see above-normal temperatures in the coming months, potentially damaging the country’s major crops, while also posing a severe health risk to citizens, Bloomberg reported. There is an increased likelihood of more heatwave days across many parts of the country in the three months through May 31, Mrutyunjay Mohapatra, director general of the India Meteorological Department, said in an online briefing on Saturday. Above-normal maximum temperatures are very likely over most areas in the three-month period, he said. Any abnormal increase in temperatures in March may pose a risk to winter-sown crops, which are at a developmental stage when excessive heat can curb yields and diminish quality. “Any prolonged hot weather this month may pull down India’s wheat output below last season’s record, undermining government efforts to secure adequate supplies,” the report said. The world’s second-largest wheat producer permitted limited overseas shipments under a quota system in February, partially easing restrictions that had been in place for more than three years. However, a smaller harvest could prompt authorities to reconsider that move, potentially tightening supplies again in a market already sensitive to weather-driven disruptions, said Bloomberg.
OPEC+ to raise crude oil output amid Middle East tensions… OPEC+ agreed to resume oil production increases at a slightly accelerated pace as a conflict sparked by U.S.-Israeli strikes on Iran threatened to bolster a rally in crude prices. Key members led by Saudi Arabia and Russia will add 206,000 barrels a day starting in April, according to a cartel statement after their monthly video conference on Sunday. The hike is unlikely to calm markets, as several OPEC+ producers have limited capacity to increase and key Gulf members could face the risk of export constraints if there are prolonged disruptions in the critical Strait of Hormuz.
Monthly USDA crush report out this afternoon… U.S. soybean processors likely crushed 6.789 million short tons, or 226.3 million bushels, of soybeans in January, according to analysts surveyed by Reuters ahead of today’s USDA monthly crush report. “If the average of estimates gathered from seven analysts is realized, the crush would be down 1.5% from the 229.8 million bushels processed in December but up 6.5% from the January 2025 crush of 212.5 million bushels. It would also be the largest January crush ever and the third largest crush for any month on record, said Reuters. U.S. soyoil stocks as of January 31 were estimated at 2.418 billion pounds, based on the average of estimates from four analysts. The estimate reflects an 11.0% increase from stocks totaling 2.179 billion pounds at the end of December and a 33.1% surge from stocks of 1.817 billion pounds at the end of January 2025. The USDA Fats and Oils report is scheduled for release at 2 p.m. CST today.
Commodity Classic conference takeaway: Farmers want stability from Trump administration… U.S. farmers have been looking for some stability after a mercurial year under President Trump’s tariffs. That appeared to be a major theme at the just-concluded annual Commodity Classic conference in San Antonio, Texas. “However, after new trade upheaval, it’s becoming increasingly clear that uncertainty is the only constant,” Bloomberg reported over the weekend. “One of the things in this industry is that there’s always uncertainties,” Krista Swanson, chief economist at the National Corn Growers Association, said in an interview at the conference. “So we’re constantly in this place of trying to balance these things.” Tariff tensions echoed throughout the presentations at the three-day Commodity Classic held last week. “The global tariffs now throw more volatility and uncertainty into the market,” said Caleb Ragland, chairman of the American Soybean Association. “We’re drastically held back when these burdens of tariffs and other issues make it where we can’t be competitive.” Said Richard Fordyce, an undersecretary at USDA, at the confab: “The president’s message is still valid to be patient, like these things don’t happen overnight,” adding that agriculture “is playing a prominent part” in trade discussions. “I don’t know that I remember an administration where the president has said soybeans so many times,” Fordyce said and as reported by Bloomberg. “The administration is listening to agriculture; they’re listening to farmers.” USDA Secretary Brooke Rollins told reporters at the conference: “We’re going to keep focusing on soybeans, focusing on China purchasing.” She also said the administration is also focusing on opening up markets so it’s “not so reliant on China.”
Malaysian palm oil futures post sharp gains… Malaysian palm oil futures jumped almost 1.5% on the first trading day of March, hovering around MYR 4,100 per MT, boosted by a weaker ringgit and firmer edible oil prices on the Dalian and Chicago markets. A rally in crude oil prices amid mounting Middle East tensions also supported sentiment. In top supplier Indonesia, authorities raised the crude palm oil export levy to 12.5% of the reference price, up from 10%, to fund its biodiesel mandate, a move expected to tighten supply. Demand signals were upbeat, with palm oil imports in India, the world’s largest consumer, surging 51% mom in January to a four-month high and boosting hopes for 2026 buying of up to 800,000 MT. However, gains were capped by weak exports, as cargo surveyor Intertek noted Malaysian shipments fell 21.5% in February to 1.15 million MT, despite seasonal demand ahead of Eid al-Fitr. Investors now await the February PMI in key buyer China, with concerns that the Spring Festival slowed economic activities.
Cattle futures hit multi-week lows, bulls in trouble… April live cattle futures on Friday fell $4.675 to $232.225 and hit a five-week low. For the week, April live cattle lost $9.875. March feeder cattle futures lost $6.225 to $355.425, hit a four-week low and on the week were down $12.60. It was a dreadful end to the trading week and month for the live and feeder cattle futures bulls. Friday’s technically bearish weekly and monthly low closes produced serious near-term technical damage to suggest market tops are in place. A hot producer price index report Friday and a risk-off day in the general marketplace were also bearish elements for the cattle markets. Lower cash cattle trade late last week was also a negative for futures. More active cash cattle was reported by USDA at midday Friday, with the agency saying steers averaged $243.51 and heifers averaging $243.21.
Lean hog futures showing resilience… April lean hog futures on Friday closed steady at $95.725 and for the week were up $2.05. The hog futures market early Friday saw a modest rebound from Thursday’s losses but could not hold those gains into the close. Still, hog futures performed pretty well given the sharp losses suffered in the cattle futures markets the past two sessions. The latest CME lean hog index is up 41 cents to $89.12. Today’s projected cash index price is up another 32 cents to $89.44. The national direct five-day rolling average cash hog price quote for Friday was $67.13. Cash hog market strength continues to lend support to lean hog futures, with rising beef prices at the meat counter driving consumers to shift toward more economical pork cuts.