Good morning!
Grain futures prices mostly firmer overnight… As of 6:00 a.m. CST, July corn was up 1/2 cent but near its highs for the year. July soybeans were 6 3/4 cents up and hit a six-week high. July soybean meal was up $0.90 and July bean oil was 17 points higher and hit another contract high overnight. July SRW wheat was up 3/4 cent and July HRW was off 4 1/2 cents. On tap today is the weekly USDA export inspections report this morning and the USDA weekly crop progress reports this afternoon. The key outside markets today see the U.S. dollar index up a bit, while Nymex WTI crude oil prices are solidly up and trading around $105.00 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…
--Iran media says Iran hit U.S. ship with missiles near Strait of Hormuz; U.S. denies report
--U.S. says “Operation Freedom” to help civilian ships leave Gulf region
--Iran juggles oil cuts and storage strain to resist U.S. blockade
--Supertanker appears to have crossed the Strait of Hormuz
--U.S. Is oil supplier of last resort as Hormuz disruptions worsen
--Bessent says U.S. is ‘suffocating’ Iran with oil industry creaking
Crude oil prices jumped more than 5% this morning, with Brent crude reaching a new four-year high, following reports that two missiles struck a U.S. warship after it ignored Iranian warnings. The IRGC Navy also released a new map, designating areas of the Strait of Hormuz under Iranian military control. The U.S. has denied any of its ships have been attacked, according to a social media post by Axios.
Meantime, a fresh plan announced by President Trump to help vessels through the Strait of Hormuz “has left shipping executives perplexed, as attacks continue and traffic remains at a near standstill,” Bloomberg reports. Trump said “Project Freedom” will see the U.S. guide ships trapped in the Persian Gulf “safely out of these restricted Waterways, so that they can freely and ably get on with their business.” No further details were announced. The head of the Iranian parliament’s National Security Commission, meanwhile, has already responded that U.S. interference in Hormuz would constitute a violation of a fragile ceasefire in place since last month.
Cool and wet early this week for the Plains, Midwest… The National Weather Service today said a strong cold front has entered the Northern Plains from Canada and will continue its southeastward trek through the Plains, reaching the southern Plains and Southeast by the middle of the week. From the Midwest and Northeast to the southern Plains and into parts of the central Rockies widespread showers and thunderstorms are expected by midweek throughout much of the country. The southern Plains and lower Mississippi Valley see the potential for strong to severe thunderstorms beginning Tuesday afternoon. Showers and thunderstorms will also develop across parts of the Midwest, Great Lakes, mid-Atlantic and the Northeast. Significantly cooler temperatures are expected early this week throughout the northern and eastern portions of the U.S. as the aforementioned cold front progresses.
OPEC+ agrees to mild increase in crude oil production… Major OPEC+ nations agreed to a modest and symbolic increase in their June production quota levels, “as the group sends a business-as-usual message following the surprise exit of the United Arab Emirates,” Bloomberg reported over the weekend. Seven countries led by Saudi Arabia and Russia will add 188,000 barrels a day in June under the agreement, which was finalized at a video conference Sunday, OPEC said in a statement. A small increase was expected by delegates before the UAE exit. The actual restoration of those barrels will depend on the Strait of Hormuz being reopened and shuttered production being restored.
China companies told to ignore U.S. sanctions… China has ordered its companies to ignore U.S. sanctions, “an unprecedented act of defiance that threatens to trap a vast banking sector in the crossfire as tension rises between the world’s largest economies,” Bloomberg said in a report. “Beijing has often railed against unilateral sanctions and pronounced them illegitimate, but it has also quietly allowed its largest companies to comply with them, in order to avoid blowback on its own economy and to preserve access to the U.S. financial system,” said the report. Saturday’s announcement — coming before a long-awaited meeting later this month between President Donald Trump and his counterpart Xi Jinping — signals a far more aggressive stance. “Beijing has now directed companies not to abide by U.S. sanctions on private refiners linked to the Iranian oil trade, including heavyweight Hengli Petrochemical (Dalian) Refinery Co. which was sanctioned last month.”
Europe ready to respond to any new U.S. tariffs… Europe is ready to respond should President Trump follow through on his threat to raise tariffs on cars and trucks from the European Union to 25%, according to Eurogroup President Kyriakos Pierrakakis and as reported by Bloomberg. “The number-one choice is always dialogue — we want to be a predictable partner in the international economy, we believe in the transatlantic relationship,” he told Bloomberg Television. “But having said this, if there is a deviation from what we have agreed upon, obviously all options are on the table and all choices will be on the table.” The spat has added to tensions over the much-delayed U.S.-EU trade deal. The two sides initially reached an agreement last July, but EU lawmakers have yet to ratify the pact as they seek further amendments. Trump claimed on Friday that the EU had failed to fully comply with a trade pact.
Higher inflation in Euro zone only temporary: ECB survey of analysts… Euro-zone inflation will jump to 2.7% on average this year but return close to the European Central Bank’s 2% target next year, according to the institution’s quarterly survey of professional forecasters. Respondents revised up their expectations for 2026 significantly — from 1.8% in the previous round — while they see price gains of 2.1% and 2% in 2027 and 2028. At the same time, they forecast slightly slower economic growth than before. A separate ECB poll concluded that the broader pass-through from higher energy costs due to the Iran war “might be more gradual than in the past” but also warned that things could get worse if the fighting isn’t over soon. The data come after the ECB last Thursday kept interest rates unchanged while signaling that an interest-rate increase will be considered at the next meeting.
Malaysian palm oil futures dip… Malaysian palm oil futures remained below MYR 4,600 per MT, falling for a second straight session amid a firmer ringgit and weaker soyoil prices on the Chicago exchange. Trading cues were also limited as Dalian markets stayed closed for a public holiday, with activity set to resume on May 6. On the export front, signs of softer demand emerged, with cargo surveyors noting that shipments for April 1–25 declined by 15.7%–16.8% from the prior month, reflecting typical post-festive weakness. Still, downside pressure was partly cushioned by a constructive near-term outlook. The Malaysian Palm Oil Council expects prices to hold above MYR 4,500, supported by elevated energy prices and potential supply disruptions linked to El Niño. In key buyer India, refiners are likely to step up purchases in the coming months to rebuild inventories if prices ease, particularly ahead of festive demand, after March imports fell 19.0% mom to a three-month low.
Cattle futures markets see routine profit-taking… June live cattle futures on Friday fell $1.00 to $253.00 after hitting a contract and record high early on. For the week, June cattle were up $7.775. May feeder cattle futures Friday fell $1.25 to $371.40 and hit a contract high early on. For the week, May feeders were up $10.50. The live cattle and feeder cattle futures markets should see continued buying interest early this week after USDA Friday reported active cash cattle trading at solidly higher levels than the week prior, with steers averaging $255.02 and heifers $254.75. The prior week saw cash trading average $246.18.
Lean hog futures bulls fading… June lean hog futures on Friday fell $1.00 to $101.275 and for the week were down 62 1/2 cents. The hog futures bulls fizzled to end the trading week, after showing some impressive but brief strength at mid-week. Friday’s technically bearish weekly low close sets the table for follow-through, chart-based selling pressure early this week, as June lean hogs are in a price downtrend on the daily bar chart. The latest CME lean hog index is up 10 cents to $91.41. Today’s projected cash index price is down 11 cents to $91.30. The national direct five-day rolling average cash hog price quote for Friday was $92.26.