Good morning!
Grain futures mostly higher overnight… As of 6:00 a.m. CST, May corn was up 3 1/2 cents. May soybeans were up 1/2 cent and hit a nearly four-week high. May soybean meal was down $0.50 and May bean oil was 85 points higher. May SRW wheat was up 11 1/4 cents and May HRW was 13 1/2 cents higher. Soybean futures saw some follow-through technical buying overnight after decent gains posted late last week. Corn and winter wheat markets saw corrective bounces after hitting multi-week lows on Friday. On tap today is the weekly USDA export inspections report and the weekly USDA crop progress reports. The key outside markets see Nymex WTI crude strongly higher and trading around $104.50 a barrel. The U.S. dollar index is higher. The yield on the benchmark 10-year U.S. Treasury note is presently 4.35 percent.
Latest on the war in the Middle East…
--Fragile ceasefire between U.S., Iran appears to be holding, for now
--U.S. blockade from 10 a.m. ET Monday of all maritime traffic entering, exiting Iran ports
--Iran rejects U.S. restrictions on shipping and threatens ports in the Persian Gulf
--Iran-U.S. talks broke down over U.S.’s “shifting goalposts,” Iran says
--Brent, WTI rise sharply; European gas futures spike; Asian stocks, U.S. futures decline
-- Saudi Arabia says east-west oil pipeline restored to full capacity
-- “A Panicked Race for Barrels Grips the Global Oil Market,” reads Bloomberg headline
-- U.S. intelligence shows China set to supply Iran arms, CNN reports
President Trump said the U.S. would blockade the Strait of Hormuz following the collapse of peace talks with Iran in Islamabad this past weekend. “Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” Trump said in a social media post. The U.S. blockade is due to take effect at 10 a.m. ET. Vice President JD Vance and envoys Steve Witkoff and Jared Kushner left the region Sunday after 21 hours of negotiations with top Iranian officials, mediated by Pakistan in an effort to end the six-week-old war. The talks’ collapse left the ceasefire agreed upon last week in limbo and Trump’s post signals more peril for the deal. Iran’s semi-official media cited “excessive” U.S. demands, while the foreign ministry said it was natural that differences wouldn’t be resolved in a single round of talks, leaving the door open for more discussions. Iran, meanwhile, said no port in the Persian Gulf or the Sea of Oman would be safe if its ports are threatened, the Wall Street Journal reported.
Rain, thunderstorms across the Plains, Midwest… The National Weather Service today said that in northern-tier states showers and thunderstorms will develop today, with strong to severe thunderstorms and heavy rain chances for the upper Midwest to the Great Lakes tonight into Tuesday morning. A lull in the thunderstorm activity is expected during the day on Tuesday before another round of strong to severe thunderstorms with heavy rain returns later Tuesday across the Midwest/upper Midwest. Strong to severe thunderstorms are also likely in the southern Plains through the next couple of days. Above-average temperatures will occur over much of the eastern half of the U.S. early this week. Warm temperatures, dry air and some gusty winds will promote a critical risk of fire weather over the central to southern High Plains and nearby southern Rockies over the next couple of days.
Trump warns “fertilizer monopoly”… The U.S. “will not accept PRICE GOUGING from the fertilizer monopoly!” President Trump said in a Truth Social post over the weekend. The President said he’s watching fertilizer prices closely during the Iran conflict. Said his Truth Social post: “I am watching fertilizer prices CLOSELY during our FIGHT FOR FREEDOM in Iran. The United States will not accept PRICE GOUGING from the fertilizer monopoly! American Farmers, we have your back!”
Australia taking steps to secure fertilizer… Australia set up a government working group with the fertilizer industry to safeguard urea supplies at risk from disruptions linked to the war in Iran, Agriculture Minister Julie Collins said, according to Bloomberg. The country has sufficient urea supplies in reserve and “on the water,” Collins said, adding the government is working with industry to secure longer-term availability. Grocery prices may immediately rise 3% to 4% as higher fuel and fertilizer costs linked to the conflict feed through the economy, Collins said, citing Treasury estimates. About 60% of Australia’s urea — a key nitrogen fertilizer used to boost crop yields — typically passes through the Strait of Hormuz.
Asian rice fields go unharvested… Harvest-ready rice fields in Asia are lying idle and farmers are deciding whether to skip planting for the upcoming season due to spiking fuel and fertilizer costs from the war in the Middle East, Bloomberg reported. “The scarcity of supplies has underscored how the war has upended global trade and raised concerns around food shortages, with Asia particularly affected by the near-closure of the Strait of Hormuz. Farmers are struggling with input costs that have doubled or even tripled, and are also finding themselves squeezed by persistently low prices, with some considering scaling back or switching to other crops to reduce their dependence on imported fertilizers and fuel,” said the report.
After the war, prices will remain elevated for a while: IMF chief… Global prices will take time to come down to levels seen before the U.S.-Israeli war with Iran even if a ceasefire holds, International Monetary Fund Managing Director Kristalina Georgieva said, according to Bloomberg. “It will take some time, yes, and it will take more time for locations that are experiencing higher degree of disruption,” Georgieva said in comments aired Sunday on CBS’s Face the Nation ahead of this week’s spring meetings of the IMF and the World Bank. “That’s why we need to remember the asymmetry of this shock.” Georgieva reiterated that the IMF will lower its global growth forecast as a result of the war in Iran. “We are going to have a downgrade, and the size of this downgrade will depend on these two things, duration and speed with which everything can come back to the same level of production that we had before,” she said.
JBS Greeley, Co. beef plant workers union agrees to deal… A tentative agreement has been reached between JBS and the union representing workers at the company’s Greeley, Colorado, plant following a three-week strike, the union announced Friday, according to the Denver News 7 TV station. The agreement comes after workers returned to work last Tuesday, and the company and union came back to the bargaining table last Thursday. United Food and Commercial Workers Local 7, the union representing workers at the meatpacking plant, said the tentative agreement would be presented to workers for a ratification vote Sunday. The agreement is set to cover 3,800 Greeley workers, according to the union.
Malaysian palm oil futures rally… Malaysian palm oil futures jumped around 1% to near MYR 4,600 per MT Monday, rebounding from recent weakness as a softer ringgit and firmer Chicago soyoil lent support. A rally in global crude oil prices following the collapse of U.S.–Iran talks also lifted sentiment, boosting risk appetite. Fundamentals added strength, with monthly data from the Malaysian Palm Oil Board showing March inventories fell for a third month to a seven-month low. In top buyer India, expectations of restocking ahead of seasonal demand grew after March imports slid 19% to a three-month low. However, gains were tempered by weaker export estimates, as cargo surveyors noted palm oil shipments slipped between 30.7% to 38.9% in the first ten days of April from the same period in March. Policy developments in Indonesia, the largest supplier, drew attention after President Prabowo ordered legal action against firms resisting a forestry crackdown, with 5.88 million hectares of oil palm plantations already seized.
Cattle futures bulls keep their pedal to the metal… June live cattle on Friday rose $2.00 to $249.20, hit a contract high and for the week were up $2.875. May feeder cattle futures gained $1.925 to $372.35, hit a 5.5-month high and for the week were up $1.725. The live cattle and feeder cattle futures markets once again finished last week strong, including technically bullish weekly high closes that suggest follow-through buying strength early this week. Technical buying was featured. Cattle bulls were also encouraged by higher cash cattle trading late last week. USDA at midday Friday reported very light cash cattle trading, with steers averaging $245.58 and heifers $245.53. The agency earlier last week reported cash trading the week prior averaged $244.96.
Lean hog futures starting to sputter… June lean hogs on Friday fell $0.40 to $103.725 and hit a two-week low. For the week, June hogs were down $0.75. The lean hog futures market Friday saw a technically bearish weekly low close, which sets the table for follow-through chart-based selling pressure from the speculators early this week. The latest CME lean hog index is down 1 cent to $90.39. Today’s projected cash index price is down another penny at $90.29. The national direct five-day rolling average cash hog price quote for Friday was $68.37.