Good morning!
Grain futures mixed overnight… At 6:00 a.m. CDT, December corn was down 2 3/4 cents. November soybeans were 1/2 cent higher. September soybean meal was up $1.50. September bean oil was 12 points lower. September SRW wheat was up 1 cent and September HRW wheat prices were 1 3/4 cents higher. The August USDA reports on Wednesday offered another upside acreage surprise but a U.S. corn yield estimate toward the low end of expectations. Crop problems elsewhere in the world, a tightening bottleneck in the Black Sea and a strong demand outlook made for a price-friendly corn picture, with both old- and new-crop ending stocks coming in below expectations. Corn may be taking leadership in the grains complex. Key for the corn market bulls will be their ability to show important follow-through price strength either today or Friday. On tap today is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index slightly down. September Nymex WTI crude oil prices are lower and trading around $81.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.7%.
U.S. focusing on economic pressure on Iran… “The U.S. military campaign against Iran has so far failed to force the regime to capitulate. The Trump administration is betting once again that suffocating economic pressure will do the job. Facing a shortfall of necessary munitions and wary of continuing an unpopular war, President Trump and his top officials are returning to a familiar playbook with the regime: relying on a steady increase in economic sanctions and a naval blockade to stifle oil exports,” said a Bloomberg report. “Operation Economic Fury, led by Secretary Scott Bessent, is devastating the Iranian economy,” U.S. Ambassador to the United Nations Mike Waltz told Fox News on Aug. 10. He said the country would “absorb the bombings” but that Iranians were more afraid of Bessent than Defense Secretary Pete Hegseth. Trump made a similar comment on Sunday to Axios, saying he is “low-keying it” with Iran. “We are just watching Iran with its huge inflation and the fact they have no money.” Bessent hit a similar theme weeks before on Fox, saying “the government is causing the people to suffer, and we’re going to keep pressing.”
Heat wave persists in southern, central Plains… The National Weather Service today said a heat wave has settled in across the central/southern Plains and the Southeast. Forecast highs in the upper 90s to low 100s combined with high humidity will lead to heat indices in the 105-115 degree range. Some potential record-tying/breaking temperatures are possible, with many areas forecast to see their hottest temperatures so far this year or even in the past few years. Morning lows only dropping into the mid-70s to low 80s will provide little relief from the heat overnight. Unfortunately, the heat wave is forecast to continue well beyond the current forecast period through at least mid-August. Meantime, daily thunderstorms will occur from the High Plains to the Ohio Valley. The severe weather threat with this activity is slightly lower, although isolated to scattered damaging wind gusts will be possible each day. The unsettled weather will also continue along and west of the Rockies.
U.S. producer price index on deck… This morning’s U.S. producer price index report will likely show an increase of 0.2%, month-over-month, in July following a 0.3% fall in June. Core producer prices, which exclude the more volatile food and energy components, are forecast to rise by 0.3% in July, accelerating from the 0.2% increase recorded in June. On an annual basis, headline producer inflation is projected to slow to 4.9%, down from 5.5% in June which marked its highest level in four months. Meanwhile, annual core producer inflation is expected to decrease to 4.2% from 4.7%, also reaching its lowest reading since March.
U.S. Treasury 30-year bond auction set for highest yield in a quarter-century… The U.S. government is about to sell its 30-year bonds at the highest interest rate in 25 years after a historic sell off that has stirred speculation the U.S. government will tilt borrowing further toward shorter-dated maturities. The U.S. Treasury will offer $25 billion of 30-year bonds at its monthly auction later today. In the when-issued market, where securities are traded before they are actually sold, the new bond has a projected yield of around 5.24% — which would be the highest borrowing cost since 2001. “It’s a headache for President Trump and Treasury Secretary Bessent ahead of midterm elections in November. Lofty government financing costs are already feeding through to the broader economy, after years of elevated inflation and government spending. The Treasury’s concern appeared to be on show last week when it tweaked its debt-sales guidance in a way that opened the door to potential cuts to long bond supply,” said a Bloomberg report.
China’s central bank to provide economic stimulus, but no major easing… The People’s Bank of China has pledged to roll out “practical and effective” policy support promptly, while avoiding signals of major easing. In its quarterly monetary policy report released Wednesday, the central bank said it will intensify countercyclical adjustments, boost domestic demand and channel more resources toward technological innovation and smaller firms. It vowed to conduct overnight reverse repo operations more frequently to fine-tune short-term rates and urged that loans and bond financing be assessed together rather than focusing solely on credit growth. The central bank noted that capital-heavy sectors like real estate and infrastructure have cooled, while emerging “new productive forces” are more asset-light, reducing traditional loan demand. It also stressed that global monetary recalibration is not a “drastic U-turn,” warning that history shows rapid tightening after massive easing tends to deliver sharper shocks to markets.
Total New World screwworm cases detected in U.S. remain at 45… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 45 total New World screwworm detected cases in the U.S. There are three active cases, all in Texas.
Malaysian palm oil futures prices dip… Malaysian palm oil futures slipped further Thursday, staying below MYR 4,700 per MT and hovering near a one-week low amid weakness in edible oils on the Dalian and Chicago exchanges. Signs of ample supply continued to weigh on sentiment, with Malaysia’s July palm oil inventories rising 3.32% mom, while production surged 9.41%. Lower crude oil prices also pressured edible oils after forecasts pointed to softer global oil demand in 2026. Meanwhile, Malaysia lowered its September crude palm oil reference price, but the adjustment was not enough to push the export duty below 10%. Still, a weaker ringgit helped cushion the downside by making palm oil more affordable for overseas buyers. Export prospects also improved, with cargo surveyors estimating Malaysian palm oil shipments rose between 2.6% and 14.8% in the first 10 days of August. In top buyer India, expectations of stronger festive-season demand provided additional support after July edible oil imports climbed to a 10-month high.
More chart-based selling in cattle futures… October live cattle on Wednesday fell $2.525 to $223.80. September feeder cattle lost $5.90 to $339.35 and hit a two-week low. Cattle futures saw fresh technical selling pressure as near-term price uptrends on the daily charts were negated, which reinvigorated the bears. Cattle futures bulls got no help Wednesday from higher cash cattle trading that occurred last week. USDA at midday today reported very light cash cattle taking place so far this week at $235.00. The agency on Monday reported cash trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. Solid gains in corn futures Wednesday also worked to pressure feeder cattle futures. In the southern Plains states, livestock heat stress will prevail during much of the next two weeks, making weight gains a challenge.
Tepid short covering in lean hog futures… October lean hogs on Wednesday gained $0.225 to $83.55. The lean hog futures market saw modest short covering as trading has turned choppy the past few sessions. The October contract remains in a price downtrend on the daily bar chart. The cash hog market is still trending down, which may limit further upside in futures in the near term. The latest CME lean hog index is down 15 cents to $95.94. Today’s projected CME index price is down 5 cents at $95.89. The national direct five-day rolling average cash hog price quote for Wednesday was $97.04. October lean hog futures are still in a downtrend on the daily bar chart but now just barely.