Good morning!
Grain futures mostly firmer overnight… As of 6:00 a.m. CST, July corn was up 1 1/4 cents. July soybeans were steady. July soybean meal was up $0.50. July bean oil down 26 points. July SRW wheat was up 4 1/2 cents and July HRW was 4 1/4 cents higher. Grain market bulls are back in the saddle after getting taken to the woodshed late last week. Wheat futures led to the upside overnight as the U.S. winter wheat crop continues to deteriorate. (See item below.) The key outside markets today see the U.S. dollar index near steady, while Nymex WTI crude oil prices are near steady and trading around $108.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.61%.
Latest on U.S.-Iran war…
-- Trump says he held off bombing Iran after Gulf states appealed
--UAE restores power to drone-hit nuclear plant, watchdog says
--India raises fuel prices again as U.S.-Iran war squeezes refiners
--Australia urgently ‘needs a lot more gas,’ energy executives say
President Trump said he called off a new bombardment of Iran planned for Tuesday after Saudi Arabia and other Persian Gulf allies wanted more time to pursue diplomacy. Trump said the U.S. delayed the strikes “for a little while, hopefully maybe forever,” because “we’ve had very big discussions with Iran, and we’ll see what they amount to.” There was no immediate confirmation from Tehran of renewed talks, and Tehran’s leaders have taken a hard line, insisting the U.S. ends a blockade of Iranian ports and provides assurances they won’t be attacked again.
Frost, freeze potential in northern Plains… The National Weather Service today said frost and freeze-related advisories/warnings are in place this morning across the northern/central Plains and into portions of the nearby Rockies behind late-season snowfall. Meantime, severe thunderstorms across east-central Plains this morning will shift farther south into the southern Plains later today. Scattered showers and thunderstorms ahead of a cold front will extend farther northeast across the Mid-Mississippi and Ohio Valleys, and into the lower Great Lakes through tonight. The greatest threat of flash flooding associated with these thunderstorms are forecast to be across central to eastern Texas as well as the Midwest/Ohio Valley through tonight.
USDA weekly crop progress reports… Monday afternoon’s USDA crop progress data showed U.S. corn planting is 76% complete as of Sunday. That’s one percentage point higher than the average trade guess compiled by Bloomberg, up from 57% last week and ahead of the five-year average of 70% for this time of year. U.S. soybean plantings were 67% complete, matching forecasts, up from 49% a week earlier and well ahead of the five-year average of 53%. U.S. spring wheat plantings were 73% finished, also matching the average estimate. That’s up from 53% last week and running ahead of the five-year average of 66%.
U.S. winter wheat crop continues to deteriorate… USDA crop progress data Monday afternoon showed the percentage of the U.S. winter wheat crop rated “good” to “excellent” slipped a percentage point to 27% in the week ended Sunday, versus expectations for the reading to remain unchanged. The data showed winter wheat rated 43% “very poor” to “poor” and 30% “fair.” On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 11.39 points to 241.61. Kansas contributed the most to the decline, driven by a 7% jump in the very poor to poor ratings from last week and falling 4.73 points on the CCI.
Pro Farmer crop consultant’s U.S. corn and soybean crop estimates… Our crop consultant, Michael Cordonnier, said in his latest weekly report: “Below are my starting estimates for the 2026 U.S. corn and soybean crops. The planting pace for both corn and soybeans continues to be ahead of average, and the crops are getting off to a better than average start. I am rating both crops at a scale of 6 (with 5 as average). The two areas of concern for the crops are dry conditions in the western Corn Belt and in the southeastern U.S.
--Corn planted acreage: 93.8 million acres (down 1.5 from March)
--Corn harvested acreage: 86.0 million acres (91.7% of planted)
--Corn yield: 181.0 bushels per acre
--Corn production: 15.566 billion bushels
--Soybean planted acreage: 86.2 million acres (up 1.5 from March)
--Soybean harvested acreage: 85.1 million acres (98.8% of planted)
--Soybean yield: 52.0 bushels per acre
--Soybean production: 4.425 billion bushels
Inflation worries overhang Group of Seven meeting… “Global finance chiefs are coming to terms with the new economic reality that a consumer-price shock they had hopes of skirting is looking likely to endure,” Bloomberg reported. “As the second day of Group of Seven discussions proceed in Paris, the aftermath of a bond-market readjustment factoring in more inflation has raised the burden of proof needed to keep borrowing costs unchanged. The prospect of higher interest rates is looming, with associated stress to growth and budget deficits. The talks with finance ministers and central bankers on Tuesday will now continue against a backdrop of 30-year U.S. Treasury yields hovering close to the highest since 2007.”
OECD warns of slowing global economic growth… Risks to the global economy have worsened as the conflict in the Middle East drags on, according to the Paris-based OECD think tank. The conflict is putting downward pressure on growth and upward pressure on inflation, the OECD said. Central banks will need to deal with the combination of elevated inflation risks and weaker economic activity as they weigh possible interest-rate increases. Reads a Bloomberg headline today: “Global bond sell off threatens turmoil in weakest Asian economies.”
European Union working to finalize trade deal with U.S. … European Union officials will meet today to work to finalize legislation for the bloc’s trade deal with the U.S. Failure to reach an agreement risks missing President Trump’s July 4 deadline and could trigger a fresh round of tariff escalation. The European Parliament has added amendments to the legislation, including a stipulation that the agreement won’t be implemented until the U.S. honors its commitments.
Indonesia government mulls commodity export controls… Indonesian markets fell Tuesday as speculation mounted that the government will centralize commodity exports to control capital flows and shore up a plunging currency, said a Bloomberg report. The benchmark Jakarta Composite Index fell 3.5% , taking its year-to-date loss to more than 26% as the world’s worst equity performer. “Traders attributed the slump to speculation about the formation of a special agency for strategic commodity exports including coal, crude palm oil and minerals. Such an organization would raise concerns about greater state control over a critical industry but also potentially help bolster government finances amid a widening fiscal deficit. The concerns are amplified by the outsized role of commodities in Indonesia’s economy. The country is a major exporter as well as the world’s largest palm oil producer, so any changes to export flows can impact currency stability as well as foreign-exchange reserves,” said Bloomberg.
Malaysian palm oil futures dip… Malaysian palm oil futures eased, hovering below MYR 4,530 per MT after two days of gains, pressured by weaker Chicago soyoil and softer crude oil. On the demand side, export prospects weakened after AmSpec Agri Malaysia noted that shipments during the May 1-15 period fell 16.5% from the same period in April. In India, the world’s largest palm oil importer, purchases dropped 26% in April from March to a four-month low, weighed by softer institutional demand and a narrower discount to rival oils. Separately, Malaysia cut its June crude palm oil reference price while keeping the export duty unchanged at 10%. Caution also persisted after the Malaysian Palm Oil Council projected palm oil prices to stay near MYR 4,400 per MT in June despite support from global biofuel policies and weather-related supply risks. Still, losses were tempered by firmer Dalian edible oil prices and Malaysia’s plan to raise its biodiesel mandate to B15 from B10 starting June 1, aimed at curbing fuel imports.
Mild profit taking in cattle futures markets… June live cattle on Monday fell $0.525 to $253.375. August feeder cattle lost $2.60 to $358.85. The cattle futures markets saw a pause and some profit-taking. Solidly higher cash cattle prices fetched last week limited selling interest in futures. USDA at midday Monday reported last week’s average cash cattle trade was $262.85. That’s up $4.33 from the week prior.
Lean hog futures pause amid price downtrend… June lean hogs on Monday fell $0.225 to $98.525. The lean hog futures market saw a pause in a bear market. The near-term technical posture for June hogs is bearish as prices are still in a downtrend on the daily bar chart. That means the path of least resistance for prices at present is sideways to lower. The latest CME lean hog index is down 2 cents at $90.46. Today’s projected cash index price is up 4 cents at $90.50. The national direct five-day rolling average cash hog price quote Monday was $94.50.