Good morning!
Grain futures mixed overnight… At 6:00 a.m. CDT, December corn was down 4 cents. November soybeans were 6 1/4 cents lower and hit a four-week low. September soybean meal was down $2.50 and hit a three-week low. September bean oil was 10 points higher. September SRW wheat was up 4 cents and September HRW wheat prices were also 4 cents higher. “King Corn” is looking heavy at mid-week, and that’s an ominous development for all the grain futures markets. It would be very difficult for soybeans and wheat futures to sustain rallies if corn continues to trend down. December corn is nearing key technical support at this week’s low of $4.58 1/4. If that price level is breached, likely pre-placed sell stop orders would be triggered to push corn prices still lower — and also more than likely then becoming an anchor for wheat and soybean markets. The key outside markets today see the U.S. dollar index near steady. September Nymex WTI crude oil prices are slightly up and trading around $76.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.61%.
Trump says deal to open Strait of Hormuz could come this week… President Trump on Tuesday evening said a deal on the Strait of Hormuz is possible as early as today, as expectations build for an arrangement that allows for the reopening of the crucial waterway for energy markets. “It could happen. Tomorrow or the next day,” Trump told reporters in Los Angeles on Tuesday night, according to Bloomberg, when asked about reports that an announcement is imminent. Talks with Iran are “moving along very nicely,” he added. “We’ll know in 48 hours.” The U.S., Iran and Oman are preparing to announce a 60-day agreement on shipping through Hormuz as soon as Wednesday, Axios reported, citing two regional sources and a U.S. official. Under the proposal, inbound vessels would use a northern lane near Iran, while outbound traffic would travel through Omani waters in coordination with the Islamic Republic. Meantime, Yemen’s Houthi militant group said it would attack Saudi oil tankers in the northern Red Sea, a potential fresh escalation in its attacks on shipping. Houthi military spokesperson Yahya Saree said the move was a result of the kingdom diverting ships away from the Bab el-Mandeb chokepoint to the south of the waterway.
More rain across central U.S., Plains into Thursday… The National Weather Service today said a frontal boundary will trigger showers and thunderstorms from the upper Great Lakes, middle Mississippi Valley and central Plains today, with an area of heavy rain. There is a slight risk (level 2/4) of excessive rainfall from southwestern Lake Michigan into the middle Mississippi Valley and central Plains from this morning into Thursday morning. Meanwhile, monsoonal moisture will produce showers and thunderstorms with moderate to heavy rain over parts of the Southwest during the late afternoon into the late evening through Friday.A third front moving southward out of central Canada will move into parts of the upper Midwest and Northern Plains Thursday into Friday. The boundary will trigger scattered showers and thunderstorms over parts of the upper Midwest Thursday into Friday. In the Northwest, ongoing fires will lead to persistent smoke in the region, from Washington/Oregon eastward and also over the Great Basin with separate fires. Air quality alerts are in effect for much of the region.
U.S. ethanol blending rate hits record… The average ethanol content of gasoline sold in the U.S. hit a record 11.29% in May as petroleum prices reached their highest monthly averages of the Iran War, Renewable Fuels Association Chief Economist Scott Richman said Tuesday, citing Energy Information Administration figures. For the 12 months through May, the ethanol blend rate in U.S. gasoline rose to 10.57%, the highest annual share ever. Ethanol-blending economics drove the increase, Richman said in a post.
Total New World screwworm cases detected in U.S. remain at 44… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is reporting 44 total New World screwworm detected cases in the U.S. There are now four active cases, all in Texas.
What summer doldrums? U.S. stock indexes hit record highs… U.S. stock indexes closed sharply higher Tuesday, with the S&P 500 and Dow Jones reaching fresh record highs, supported by strong corporate earnings and lower oil prices amid optimism that the U.S. and Iran could reach an agreement to reopen the Strait of Hormuz. The S&P 500 rose 1.8% to 7,737, the Dow gained 907 points to 54,086, and the Nasdaq 100 jumped 3.3%. Among individual stocks, Palantir soared 29%, posting its strongest daily gain in more than two years after delivering blowout second-quarter results. Semiconductor stocks also rallied, led by Intel (+10.8%), Marvell (+13%), Micron (+7.6%), and Broadcom (+6.6%). Caterpillar climbed 5.5% after reporting better-than-expected second-quarter earnings and raising its revenue growth guidance. After the closing bell, SpaceX reported better-than-expected second-quarter revenue in its first earnings release since its June IPO. TradingEconomics.com
Federal Reserve official: Tighter U.S. monetary policy needed… Federal Reserve Bank of Kansas City President Jeff Schmid on Tuesday suggested higher U.S. interest rates are needed to achieve the Fed’s price-stability goals. Schmid said bringing annual inflation down to the Fed’s 2% objective will require tighter policy, given the strength of demand and investment. Schmid cautioned against assuming that inflation pressures stemming from supply shocks will be fleeting, saying such incidents can lead to large increases in inflation when demand is strong. Earlier on Tuesday, Philadelphia Fed President Anna Paulson said she will keep an “open mind” about the future path for interest rates based on what happens with inflation. Bloomberg
China sanctions drone exports to U.S. … China tightened its exports controls on drones to the U.S. and sanctioned multiple American companies in a series of retaliatory measures against Washington’s widening tech curbs. “The Chinese Commerce Ministry announced four sets of countermeasures on Wednesday in response to recent U.S. moves. It cited decisions including the Federal Communications Commission’s ban on some foreign-made robots and power inverters and the blacklisting of more than 40 Chinese companies accused of recruiting Uyghurs to work as forced labor,” said a Bloomberg report. As part of the retaliation package, sales to the U.S. of drones, their key components and related technologies listed on China’s dual-use export control list will be subject to “strict case-by-case review,” the ministry said.
China’s services sector expands at slowest rate in two years… The RatingDog China General Services PMI declined to 50.4 in July from 54.1 in June, falling below market forecasts of 53.7. It was the slowest expansion in services activity since September 2024. New business growth moderated for the second straight month, easing to a four-month low amid softer domestic demand. However, new export orders rose for the third consecutive month, supported by stronger overseas demand. Employment rose for the third consecutive month, though at a slower pace than in June. On the price front, input costs increased due to higher labor, raw material, advertising, and diesel costs. However, input cost inflation eased to a six-month low. Meanwhile, output prices continued to rise, marking the first back-to-back increases in the sector in a year and a half, driven by higher operating expenses, oil prices, and insurance premium changes. Finally, business sentiment fell to its lowest level since February 2020. TradingEconomics.com
Malaysian palm oil futures firmer… Malaysian palm oil futures on Wednesday edged higher to around MYR 4,700 per MT, extending recent gains as a weaker ringgit and firmer Dalian palm oil contracts lifted sentiment. Stronger exports also lent support, with cargo surveyors noting shipments in July grew between 12.1% and 19.5% from June. In India, the world’s largest palm oil importer, edible oil imports climbed to a 10-month peak in July as refiners ramped up purchases of palm oil and soyoil to replenish inventories ahead of the festival season amid tightening domestic supplies. In top supplier Indonesia, palm oil exports rose 2.5% yoy in H1 of 2026, highlighting resilient overseas demand. However, gains were limited by weaker Chicago soyoil futures. Traders also adopted a cautious stance ahead of July trade data in China, which could offer fresh insights into demand from one of the major palm oil consumers. Meanwhile, Reuters forecast Malaysia’s palm oil stocks are likely to hit a five-month high in July, tempering the upside.
Cattle futures markets extend gains… October live cattle on Tuesday rose $1.175 to $227.90. September feeder cattle rose $3.60 to $346.15 and closed at a two-week high close. The cattle futures markets extended their recent gains. For October live cattle and September feeders, technical odds have improved that near-term market bottoms are in place. Both markets are in fledgling price uptrends on the daily bar charts. USDA at midday Tuesday reported very light cash cattle trading so far this week, with steers averaging $235.00 and heifers $233.00. The agency Monday reported cash cattle trade last week averaged $233.06, which compares to an average of $230.48 fetched the week prior.
Modest short covering in lean hog futures… October lean hog futures on Tuesday rose $0.675 to $84.35. The hog futures market saw modest short covering but bears still have some momentum and confidence. October lean hog futures see a potential bearish pennant pattern forming on the daily bar chart. The cash hog market is declining, to also keep buyer interest in futures limited. The latest CME lean hog index down 55 cents to $97.58. Today’s projected CME index price is down 51 cents at $97.17. The national direct five-day rolling average cash hog price quote for Tuesday was $99.43.