Good morning!
Grain futures modestly up overnight… At 6:00 a.m. CDT, December corn was up 2 cents. November soybeans were 1 1/4 cents higher. September soybean meal was up $0.20 and hit a five-week low. September bean oil was 17 points higher. September SRW wheat was up 5 1/2 cents and September HRW wheat prices were 7 cents higher. More short covering and position evening were featured overnight, ahead of Wednesday morning’s USDA crop production and monthly supply and demand reports (WASDE). A Reuters poll of analysts puts U.S. corn production at 15.93 billion bushels, about 66 million below USDA’s July figure, with 2026-27 U.S. corn ending stocks near 1.73 billion. U.S. soybean production is expected at 4.47 billion bushels, with 306 million bushels in carryout. Average U.S. yield guesses see 182.4 bushels an acre for corn and 52.9 bushels an acre for soybeans. Grain traders are also anticipating next week’s annual Pro Farmer crop tour that this year will feature more real-time analysis and commentary. The key outside markets today see the U.S. dollar index slightly up. September Nymex WTI crude oil prices are higher and trading around $84.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.733%.
U.S., Iran showing no signs of peace progress… President Trump hardened his stance toward Iran as negotiations to reopen the Strait of Hormuz continue, pronouncing that the Islamic Republic must pay reparations for past attacks. “Trump made his sweeping new demands on Monday after accusing Tehran of itself seeking compensation for war damages through public statements even though the issue had never been raised in negotiations,” said a Bloomberg report. “I am likewise demanding compensation from Iran, for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts,” Trump wrote on social media. “Additionally, compensation should be paid to the families of the hundreds of thousands of innocent protestors that Iran has killed over the last 50 years.” Trump on Monday said he’s ready to let economic pressure build on Iran. “The hardening positions on both sides makes it unlikely that Washington or Tehran will be able to agree to any immediate pact on Hormuz, where around a fifth of the world’s oil and liquefied natural gas flowed before the conflict began,” said the report.
Crude oil prices, bond yields back on the rise… Government bond yields up-ticked and stocks churned overnight as rising crude oil prices have revived inflation concerns a day before the release of key U.S. inflation data. Ten-year U.S. Treasury yields rose three basis points to 4.73% after a six-point jump on Monday. Germany’s bunds fell for a second day and U.K. gilts also slid as Brent crude headed toward $90 a barrel. Nymex WTI crude is trading around $84.50 a barrel. Wednesday’s July consumer price index report (CPI) is the U.S. economic data point of the week. The marketplace consensus is for up 0.1% month-on-month and up 0.2% for the core CPI (minus food and energy). The annual rates are expected to show 3.4% headline CPI and 2.5% core CPI. That would mark a second month of improvement after June’s 0.4% decline — the largest monthly drop since April 2020. The Producer Price Index (PPI) report comes Thursday. July PPI is seen rebounding to a modest 0.1% rise, month-on-month, after June’s energy-led 0.3% decline, with core near 0.2%.
Potentially heavy rain across much of the central U.S. … The National Weather Service today said a frontal boundary meandering across the north-central U.S. will keep the focus for thunderstorms and heavy rainfall across the Midwest, lower Great Lakes, and Ohio Valley over the next few days. For today, there is particular concern about the Ohio Valley for flash flooding as another 2-4" of rain falls near an area inundated from the previous day of flash flooding. An active day for severe weather is also anticipated across northern Illinois and the Ohio Valley primarily for damaging wind gusts. The heavy rain threat is forecast to continue on Wednesday along this corridor. Meantime, over the Northern High Plains daily chances of scattered severe weather and isolated heavy rainfall will remain in the vicinity of a stationary front and weak low-pressure wave. Also, over the next two days hot weather will spread from the central Plains to the Southeast this week, while a cooling trend sets in across the West and Northern Plains. A few high temperature records remain possible in the central High Plains and Southeast.
USDA weekly crop progress reports… The agency’s reports Monday afternoon showed U.S. corn and soybean conditions little changed in the past week. The percentage of the corn crop rated good or excellent was unchanged at 61% as of Sunday. The Pro Farmer Crop Condition Index (0-to-500 scale, 500 equals perfect) for corn saw a 2.28 point decline to 358.39. Soybeans were rated 62% good or excellent, down one percentage point from last week. The soybean CCI rating fell 0.48 point to 363.84. The U.S. spring wheat crop was rated 51% good or excellent, down from 55% last week. USDA said 24% of the spring wheat crop had been harvested, up from 5%. Winter wheat harvest was pegged at 91%, up from 86% a week ago and matching expectations. The spring wheat CCI rating fell 3.69 points to 340.91 in response to state-level ratings changes, as declines were seen in every state except Idaho. Read more about the latest Pro Farmer CCI readings here.
Pro Farmer crop consultant leaves U.S. corn, soybean yield forecasts unchanged… In Dr. Michael Cordonnier’s weekly report, he left his 2026 U.S. corn yield unchanged at 181.0 bu/ac, with a neutral bias. “Weather last week and over the weekend continued to be favorable for crop development,” he said. Cordonnier also left his 2026 U.S. soybean yield unchanged at 52.0 bu/ac, with a neutral bias. “The weather during the first half of August has been generally favorable for soybean development.If the weather during the second half of August is as good as the first half, the nationwide soybean yield might move slightly higher,” he said.
Trump administration extends Jones Act waiver, but narrows it… The Trump administration on Monday extended its exemption of the Jones Act by another 90 days, but narrowed its scope as it attempts to keep domestic fuel supplies flowing during the Iran war. The Jones Act requires the transport of goods between American ports to be conducted by American vessels. The extension was narrowed to apply only to vessels hauling certain energy sources, CNBC reported, citing a White House official. The extension also requires the Pentagon to consult with the U.S. Maritime Administration to determine if the waiver applies to each individual shipping voyage, the report said.
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 now four active cases, all in Texas.
Malaysian palm oil futures extend gains… Malaysian palm oil futures pushed higher Tuesday, hovering above MYR 4,740 per MT and marking the strongest level in more than two weeks, as a softer ringgit boosted export competitiveness and firmer palm olein prices on the Dalian exchange also lent support. Export estimates reinforced the bullish tone, with cargo surveyors reporting Malaysian palm oil shipments increased between 2.6% and 14.8% in the first 10 days of August. Demand prospects in top consumer India also improved, with July edible oil imports climbing to a 10-month high as refiners stepped up palm oil and soyoil purchases ahead of the festive season. However, gains were capped by signs of abundant supply. Malaysia’s July inventories rose 3.32% month-on-month to 2.63 million MT, while production jumped 9.41% to 1.79 million MT. Meanwhile, in China, another key buyer, both consumer and producer price inflation eased in July, underscoring weak domestic demand that could limit further upside in palm oil.
Short covering in live cattle futures… October live cattle on Monday rose $1.625 to $226.90. September feeders lost $0.65 to $344.575, near mid-range. October live cattle futures saw short covering, while September feeders saw some mild technical selling pressure. Selling interest was limited by higher cash cattle trading that occurred last week. USDA at midday Monday reported cash cattle trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. October live cattle and September feeder cattle futures still see price uptrends in place on the daily bar charts but they need to show fresh power soon to keep them alive.
Lean hog futures also see short covering… October lean hogs on Monday rose $1.45 to $83.675. The hog futures market saw heavy short covering and perceived bargain buying, after recent selling pressure that last Friday pushed October hogs to a four-week low. Good follow-through buying today would begin to suggest the hog futures market has put in a near-term price bottom. However, the cash hog market is still trending down, to keep the bears in control. The latest CME lean hog index is down 36 cents to $96.30. Today’s projected CME index price is down 21 cents at $96.09. The national direct five-day rolling average cash hog price quote for Monday was $98.90.