Good morning!
Grain futures prices mostly higher overnight… As of 6:00 a.m. CST, July corn was up 2 1/4 cents. July soybeans were 7 1/4 cents higher. July soybean meal was up $0.70 and July bean oil was 70 points higher and hit a contract high overnight. July SRW wheat was down 1/4 cent and July HRW was off 1 1/2 cents. Corn, soybean and winter wheat markets bulls are presently enjoying price uptrends in place on their daily bar charts. Bulls are presently wondering about the prospects of a summertime weather scare in corn and soybean markets, as a weather market is presently playing out in the winter wheat markets. (See item below on odds for a weather market in corn this summer.) Asian markets were closed for a holiday today, so there was no Malaysian palm oil futures trade overnight. The key outside markets today see the U.S. dollar index up a bit, while Nymex WTI crude oil prices are slightly up and trading around $106.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.4%.
Latest on the war in the Middle East…
-- Trump vows to maintain pressure on Iran through naval blockade
-- High fuel prices start to bite in U.S. as gasoline nears $5 in Midwest
--Iran activated air defenses around Tehran to counter reconnaissance drones
--U.S. Defense Secretary Pete Hegseth sparred with U.S. lawmakers on Thursday
--Dems say Iran war near 60-day mark that requires War Powers Act of Congress
--Signs of more strain on the Iranian economy have emerged in recent days
President Trump vowed to maintain a naval blockade on Iran and was briefed by commanders on further military options. Iran’s speaker of parliament, Mohammad Bagher Ghalibaf, said the blockade will further push up oil prices and that it must be lifted for new talks to occur. Trump and Iranian leaders are waiting for the other to yield first, with Iran’s new supreme leader, Mojtaba Khamenei, casting doubt on the likelihood of any deal and vowing not to give up the country’s nuclear or missile technologies.
Chilly, frosty weekend in central, southern U.S. … The National Weather Service today said significantly below-average temperatures will linger through the weekend for much of the eastern and southern regions of the U.S. Temperatures in the southern Plains and southern Rockies could drop around 30 degrees below the seasonal average. Texas and parts of the lower Mississippi Valley may potentially set record-low daily maximum temperatures, with widespread temperatures in the 50s expected. Much-below-average temperatures are also expected in the Southeast, mid-Atlantic, Northeast, and Midwest regions. Freeze warnings and frost advisories are currently in effect for parts of the Great Lakes. Farther west, above-average temperatures will spread through the Pacific Northwest, northern and central Great Basin and California before moving eastward. Meantime, a stationary frontal boundary will continue to bring heavy rainfall for Texas and portions of the lower Mississippi Valley today.
Japan intervenes in currency market to support yen… The Japanese yen climbed to around 155.5 per dollar today before easing back, a day after Tokyo was suspected to have intervened in the currency market as officials delivered a “final” warning to traders against selling the yen. Although the Finance Ministry has not formally confirmed intervention, the sharp and sudden move led traders to widely attribute the action to Japanese government support. Market participants are now assessing the likelihood of additional steps as the government typically conducts more than one round of yen purchases. Earlier in the week, the yen had weakened beyond the psychologically important 160 per dollar threshold, a level that previously triggered official action in July 2024. The currency moves come in the context of recent policy decisions by both the Bank of Japan and the Federal Reserve, which held interest rates steady, maintaining a wide US–Japan rate differential that continues to favor dollar strength and pressure the yen. TradingEconomics.com
U.S., China talk about “Board of Trade” … U.S. Trade Representative Jamieson Greer said American officials discussed a possible “Board of Trade” in a call with Chinese Vice Premier He Lifeng Thursday, casting it as a tool that could help manage economic ties between the two nations, Bloomberg reported. Greer and U.S. Treasury Secretary Scott Bessent in the call “highlighted the role that a new government-to-government Board of Trade could play in optimizing bilateral trade in non-sensitive goods,” Greer said in a social media post, adding that they also discussed “the importance of agricultural market access in China for U.S. producers.” The U.S. and China, the world’s two largest economies, have been considering creating a new mechanism that could help oversee their trade ties and manage bilateral concerns that have flared in recent years. Greer floated the idea of a Board of Trade in March, following talks in Paris between the two countries aimed at laying the groundwork for the upcoming summit between President Trump and his Chinese counterpart, Xi Jinping, set for May 14-15.
Trump signs permit authorizing pipeline to carry Canadian crude to Wyoming… President Trump on Thursday signed a presidential permit authorizing Bridger Pipeline’s project meant to carry Canadian crude oil to Wyoming — the latest in years of back-and-forth over oil pipelines linking the countries, Bloomberg reported. “The project is a quasi-revival of the canceled Keystone XL pipeline that would have carried Canadian oil-sands crude to the U.S. and drew widespread opposition from environmentalists. Former President Barack Obama rejected the project in 2015. Trump sought to revive it during his first term, and then former President Joe Biden withdrew a key permit for it in 2021,” said the report.
What are the odds of a weather-market rally in corn futures this summer?... Pro Farmer economist Lane Akre did some research on the matter. “The past two years have not had a summer corn rally, an occurrence that has only happened once before, in the middle of the 1980’s farm crisis. Assuming the ongoing rally in December corn futures makes a higher high, the ongoing rally qualifies as a summer rally by our metrics, as our definition of summer begins May 1,” he said. More details on summer weather markets in the grains can be found in our Pro Farmer weekly newsletter that will be published on line and mailed out later today.
Fitch warns on U.S. debt burden… Fitch Ratings is warning the U.S.’s credit grade faces the challenges of a widening deficit that leaves its debt burden “far above” other nations that share its AA score, Bloomberg said in a report. “Deterioration is likely in the U.S. fiscal position this year due to tax cuts in the One Big Beautiful Bill Act, despite offsets from tariff revenue, a Fitch team including Richard Francis and Shelly Shetty wrote in a Thursday report. That emphasizes the importance of November’s Congressional mid-term elections, they wrote,” said Bloomberg. “The mid-terms could provide additional checks and balances to executive powers if the Democrats gain control of one or both houses of Congress,” they wrote. “However, divided government could make negotiating fiscal packages more difficult and raise brinkmanship risks, including on the debt ceiling,” which Fitch expects to be reached in the second half of 2027. All three major rating firms have the U.S. pegged one level below triple-A, with stable outlooks. Last May, Moody’s lowered the U.S. credit score to Aa1 from Aaa, joining Fitch and S&P in no longer grading the world’s biggest economy as a triple-A sovereign borrower.
Kalshi agrees to limit trading hours in grain-related contracts… Kalshi Inc. has agreed to limit trading hours on new financial contracts tied to crops like corn and wheat after facing pushback from the agriculture industry and derivatives exchanges, Bloomberg reported. “Trading on Kalshi, the most popular U.S. prediction market, generally happens around the clock, seven days a week, but the company has told groups representing the agriculture industry that for certain products it will stick to the same hours as traditional exchanges. An industry group representing derivatives exchanges, traders and commodities producers, the Commodity Markets Council, organized two calls with Kalshi to express its concerns about the startup’s new agriculture contracts, according to people familiar with the discussions who asked not to be named because the conversations were private. Kalshi announced in mid-April that it planned to create a new commodities trading hub with contracts tied to everything from corn and soybeans to lithium and natural gas,” said Bloomberg. In the wake of the Kalshi news, the Commodity Futures Trading Commission is asking for public input on its Commitments of Traders reports. The CFTC is considering whether the reports should be published more frequently and whether binary options should be included in the reports.
Live cattle futures see mild profit taking… June live cattle on Thursday fell $1.25 to $254.00. May feeder cattle gained $1.15 to $372.65. The live cattle futures markets bulls took a pause today after recent solid gains that pushed prices to a record high on Wednesday. Mild profit taking was also featured. Feeders posted modest gains on fresh technical buying. This week’s strong gains in the cash cattle market will limit any selling pressure in futures. Active cash cattle trading at solidly higher levels late this week saw USDA at midday Thursday report steers averaging $255.01 and heifers $254.73. That’s well above last week’s cash cattle price that averaged $246.18.
Lean hog futures bulls fizzle… June lean hogs on Thursday fell $1.475 to $102.275. The hog futures market bulls fizzled today and gave back nearly all of Wednesday’s gains. Bulls need to step up today and show strength in order to keep a fledgling price uptrend alive on the daily bar chart. The latest CME lean hog index is up 12 cents at $91.31. Today’s projected cash index price is up 10 cents at $91.41. The national direct five-day rolling average cash hog price quote Thursday was $91.99.