Good morning!
Grain futures prices posting gains early today… As of 6:00 a.m. CDT, December corn futures were up 2 cents, November soybeans up 4 1/2 cents and winter wheat futures were up 1 to 2 cents. The corn market bulls are working on stabilizing prices after the early-week sell off. Soybean futures are in the middle of a choppy trading range but the bean bulls have held up well given the sell off in corn this week. Winter wheat futures bears have the overall chart advantage but there are strong technical support levels just below current prices. The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are higher and trading around $66.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.392%.
Oppressive heat continues in the Midwest and Plains… World Weather Inc. late Wednesday reported a ridge of high pressure, currently over the southeastern U.S., will be slowly shifting west and into the central U.S. this weekend into next week, while also gaining strength and increasing in size. “The ridge will promote more areas of unusual heat, which will further raise livestock stress.” Also, some pockets of the Corn Belt could receive greater rain than preferred, leading to localized flooding and some fieldwork delays as thunderstorm complexes move around the outer edge of the ridge, said the forecaster.
Trump says U.S. tariffs will range from 15% to 50%... President Donald Trump late Wednesday suggested he would not go below 15% on tariff rates ahead of the Aug. 1 trade-deal deadline, indicating the floor for the increased tariffs was rising. “We’ll have a straight, simple tariff of anywhere between 15% and 50%,” Trump said Wednesday. “Trump’s comment declaring that the tariffs would begin at 15% represented the latest twist in his effort to impose duties on nearly every U.S. trading partner, and the latest indication that Trump was looking to more aggressively impose the levies on exports from countries outside the small group that so far has been able to broker trade frameworks with Washington,” Bloomberg reported.
Malaysia wants less than 20% U.S. tariffs… Reports say Malaysia is seeking to lower U.S. tariffs to less than 20% and is optimistic of reaching a trade deal ahead of the Aug. 1 deadline, according to a Malaysian trade official. President Trump has threatened a 25% levy, separate from sector tariffs, unless Malaysia can strike a trade deal with the U.S.
U.K., Japan stock indexes hit record highs… The United Kingdom’s FTSE 100 and Japan’s TOPIX stock indexes hit record highs Thursday, following the announced U.S.-Japan trade deal earlier this week and on optimism the U.S. and European Union can reach a deal before the Aug. 1 U.S.-imposed deadline. Reports have suggested the U.S. and EU are moving toward a 15% tariff agreement.
Trump to visit Federal Reserve in Washington, D.C. … President Trump will personally visit the Federal Reserve building in Washington today to tour a construction site he has criticized for cost overruns. CNBC reported it has been at least 20 years since a sitting president has visited the Federal Reserve.
European Central Bank likely to hold rates steady… The European Central Bank is holding its monetary policy meeting today and will likely leave interest rates unchanged for the first time in more than a year as the ECB awaits more clarity on what U.S. trade tariffs will do the European Union economy. The deposit rate will likely be kept at 2%. However, many analysts expect another 0.25% rate cut from the ECB in September.
“Strange” U.S. dollar means Fed should tread lightly… A Bloomberg opinion article today says the U.S. economy has not seen tariffs like these in around 80 years. “Given the lack of recent precedent, the Federal Reserve is right to wait on more evidence that consumer prices aren’t spiking before proceeding with interest rate cuts.” There’s also another reason for the Fed to tread carefully: the “strange” behavior of the U.S. dollar, according to the story. Many economists, including Council of Economic Advisors Chair Stephen Miran, expected the greenback to strengthen when President Trump implemented tariffs. Last November, Miran wrote that U.S. dollar was “more likely than not” to appreciate alongside an improving trade balance. “Bafflingly, the dollar actually weakened for reasons that are still hotly debated,” said the Bloomberg opinion piece. The U.S. dollar index has declined by around 7% since just before the “Liberation Day” tariffs unveiled on April 2 and is down around 10% this year.
Malaysian palm oil futures on three-day winning streak… Malaysian palm oil futures traded above MYR 4,300 per MT, rising for the third straight session amid firmer other edible oils prices. The Malaysian Palm Oil Council expects prices to range between MYR 4,100 and MYR 4,300 over the next month, supported by strong soybean oil prices.
Weekly USDA export sales report out this morning… Today’s weekly USDA export sales report is expected to show U.S. corn sales of 100,000 to 800,000 MT in the 2024-25 marketing year, and sales of 400,000 to 800,000 MT in the 2025-26 marketing year. The report is expected to show U.S. soybean sales of 100,000 to 350,000 MT in the 2024-25 marketing year, and sales of 250,000 to 500,000 MT in the 2025-26 marketing year. Traders expect U.S. wheat export sales of 250,000 to 500,000 MT in the 2025-26 marketing year.
No early chart clues cattle futures markets are near price tops…The live and feeder cattle futures markets bulls are keeping their pedal to the metal, with no solid, early technical clues that market tops are close at hand. That’s keeping the chart-based speculators active on the long side of the markets. Very light cash cattle trade has occurred so far this week, with steers averaging $240.00 and heifers $238.00, according to USDA. Packers don’t want to be too aggressive on their bids because of negative margins. Friday’s monthly USDA Cattle on Feed Report will likely push cash cattle negotiations late into the week.
Lean hog futures continue to rally from mid-July low… The lean hog futures bulls continue to make a strong push north after scoring a near-term price bottom in mid-July. The hog bulls are enjoying spillover buying interest from record-setting price gains in the cattle futures markets. The latest CME lean hog index is up another 39 cents to $108.59 as of July 21. Thursday’s projected cash index price (for July 22) is up 64 cents to $109.23.
Today’s reports--Thursday
7:30 a.m. Weekly Export Sales -- FAS
1:00 p.m. Fruit and Tree Nuts Outlook: July 2025 -- ERS
2:00 p.m. Livestock Slaughter -- NASS
2:00 p.m. Slaughter Weekly -- NASS