Good morning!
Grain futures post sharp rallies overnight… As of 6:00 a.m. CST, July corn was up 14 cents. July soybeans were up 23 1/2 cents. July soybean meal was up $2.90. July bean oil was 120 points higher. July SRW wheat was up 20 1/2 cents and July HRW was 14 cents higher. The grain futures market bulls got some good news over the weekend as the U.S. and China added more specifics on China’s intent to purchase U.S. ag products, following last week’s summit meeting. (See items below.) Late last week the grain markets sold off sharply on ideas the Trump-Xi summit meeting was not substantive on the ag trade front. On tap today is the weekly USDA grain export inspections and crop progress reports. The key outside markets today see the U.S. dollar index weaker, while Nymex WTI crude oil prices are modestly up and trading around $106.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.6%.
White House fact sheet: China will significantly increase purchases of U.S. ags... A White House fact sheet released over the weekend provided dollar amounts for Chinese agricultural purchases and other outcomes from last week’s summit meeting. “China will purchase at least $17 billion per year of U.S. agricultural products in 2026 (prorated), 2027, and 2028, in addition to the soybean purchase commitments that it made in October 2025. China restored market access for U.S. beef by renewing expired listings of more than 400 U.S. beef facilities and adding new listings. China will work with U.S. regulators to lift all suspensions of U.S. beef facilities. China resumed imports of poultry from U.S. states determined by the USDA to be free of highly pathogenic avian influenza,” said the fact sheet.
China also releases more details on Trump-Xi meeting… China over the weekend said it agreed with the U.S. to lower levies on some products to promote bilateral trade, “underscoring how ties between the world’s two largest economies are further stabilizing after the historic meeting of the leaders,” Bloomberg reported. China’s Ministry of Commerce on Saturday issued an update on the bilateral trade talks between President Trump and Chinese leader Xi Jinping. “The ministry said Beijing and Washington will adopt a series of measures, including mutually cutting levies on certain products, to expand bilateral trade in areas including agriculture. It didn’t provide more specifics, adding that both teams are still currently negotiating over the details,” said the report. The outcome shows that both countries “can find solutions to the problems through dialog and cooperation,” the Commerce Ministry said. The Commerce Ministry reiterated that the two sides agreed to establish boards of investment and trade to discuss concerns.
Latest on U.S.-Iran war…
--Iran strikes UAE nuclear plant; no major damage
--Trump says “clock is ticking” for Iran
--U.S., Iran stall on Hormuz reopening as crude oil supplies tighten
--U.S. and Iran far from Hormuz deal as drone hits UAE power plant
--Suezmax tanker with Iraqi crude reaches India after Hormuz transit
--IEA chief warns commercial oil inventories are falling very fast
President Trump expressed frustration with Iran and told it the “clock is ticking,” hours after drones targeted a nuclear power plant in the United Arab Emirates. Tehran “better get moving, FAST, or there won’t be anything left of them,” Trump said on Truth Social on Sunday, according to Bloomberg. “These were his most belligerent comments regarding the Iran war, which remains in a fragile ceasefire, since he returned to the U.S. from China on Friday.” Earlier on Sunday, a drone sparked a fire in a power station at the United Arab Emirates’ Barakah nuclear plant, underscoring the fragility of the truce. It was launched from the west of the UAE, according to the country’s defense ministry, which added that two other drones were intercepted. There was no radiological impact, Abu Dhabi’s media office said, according to Bloomberg.
One more day of stormy weather in Midwest, Plains… The National Weather Service today said there will be another day of active severe, weather across the east-central Plains as heavy mountain snow blankets the higher elevations of the northern Rockies. Meantime, heat continues to build across the eastern U.S.The greatest threat of severe weather extending from northern Kansas to southern Minnesota early this morning is expected to enter a relative lull during the day. By this evening, a final round of severe weather and heavy downpours will spread across the central Plains to the upper Midwest. Showers and thunderstorms will extend into the Ohio Valley and the mid-South Tuesday into Wednesday morning. Late-season heavy snow is in progress across the higher elevations of Wyoming, the Front Range and the Wasatch. Strong westerly winds down the slopes of the southern Rockies will meet with low relative humidity to maintain extreme fire weather danger for the southern High Plains today. Meanwhile, frost and Freeze-related advisories/warnings are in place across portions of the northern to central High Plains through Tuesday morning behind the late-season snowfall.
U.S. may take action on China dumping… President Trump will be presented with options for action on China if U.S. investigations determine industrial overcapacity is influencing Chinese exports, U.S. Trade Representative Jamieson Greer said and as reported by Bloomberg. “We’ll certainly be presenting the president with those options if those investigations show what we think they might show, which is that there’s a huge problem with overcapacity in China and other countries,” Greer said Sunday in an interview with CBS’s Face the Nation. Trade was a focus when Chinese President Xi Jinping hosted Trump for a summit last week, though both sides have released limited details on deals and Trump said tariffs weren’t discussed. The Trump administration plans to publish a readout with its view of the summit’s outcomes shortly, Greer said.
Bond traders expect “new era” of higher yields… “A new era of elevated borrowing costs is potentially under way as war-driven inflation angst intensifies in the U.S. bond market, sending 30-year yields toward a two-decade high above 5%,” said a Bloomberg report. “The slump in Treasuries came alongside a shift in wagers around the Federal Reserve, with traders now seeing an interest-rate hike as a lock by next March.” Yields are now around a half-point or more above where they stood at the end of February, with the two-year at 4.07% and the 10-year at 4.59%. Meantime, equities are at risk of a significant pullback as the global bond selloff threatens to derail the artificial intelligence-driven rally, according to Morgan Stanley strategists. If the bond market becomes more volatile and long-term interest rates keep rising, “we would expect the first meaningful correction in equity prices since markets bottomed at the end of March,” the team led by Mike Wilson wrote in a note, said Bloomberg.
U.S., Brazil see ethanol export boom… The U.S. and Brazil – the world’s two largest ethanol producers – are on track for a jump in exports of the product this year due to strong demand from countries looking to expand their fuel sources due to the continued closure of the Strait of Hormuz. Reuters said the U.S. has seen a 20% increase in ethanol exports so far this year, on top of record shipments last year. And Brazil could more than double its foreign sales in the new trading season (2026/27) that started in April, representatives for the biofuels industry told Reuters last week.
“Global inventory race intensifies in shadow of the Iran war”… That’s the headline of a Bloomberg story that is just one more clue of inflation worries that are stoking stockpiling and even hoarding. “The global rush to stockpile manufactured goods on fears of an energy-supply crunch will overshadow business surveys in the coming week gauging the impact of a third month of war in the Middle East. Purchasing manager indexes for May are projected to show continued expansion, bolstered by front-loaded stock-building, but the question is whether this points to resilience or manufacturers running on fumes before the energy shock fully hits. The indexes will reveal how the cost impact is affecting major economies and possibly hint at supply logjams, which could feed pipeline inflation pressures that central banks are watching before the next round of key monetary decisions,” said the Bloomberg report.
Xi-Putin summit… The Kremlin confirmed President Vladimir Putin’s visit to China on May 19-20, days after President Xi Jinping’s summit in the Chinese capital with his U.S. counterpart Donald Trump. Putin’s visit at the invitation of Chinese leader “is timed to coincide with the 25th anniversary of the signing the Treaty on Good-Neighborliness, Friendship and Cooperation, which is fundamental for interstate relations,” the Kremlin said in a statement. Meantime, Chinese President Xi Jinping and Russian President Vladimir Putin “exchanged congratulatory messages marking the opening of the China-Russia Expo in the northeasten city of Harbin, highlighting deepening economic ties between the two countries,” reports Bloomberg. Xi pointed to the anniversaries of the bilateral strategic partnership and the 2001 friendship treaty, emphasizing expanded cooperation across sectors, China Central Television reported on Sunday.
Malaysian palm oil futures rally… Malaysian palm oil futures surged more than 2% to above MYR 4,500 per MT, extending recent gains and reaching their highest level in a week. A weaker ringgit, firmer Dalian palm oil contracts, and stronger Chicago soyoil boosted sentiment. Meanwhile, crude oil prices jumped as efforts to end the U.S.-Israeli war with Iran appeared to stall, raising concerns over supply disruptions and boosting the broader edible oils complex. However, upside was capped by weak exports, with AmSpec Agri Malaysia reporting shipments down 16.5% mom in the first half of May. Demand concerns lingered as April activity data in China, a key buyer, signaled slowing momentum. In top consumer India, palm oil imports fell 26% in April from March, hitting a four-month low, due to weaker institutional buying and a narrower discount to rival oils. Separately, Malaysia has lowered its June crude palm oil reference price but kept the export duty steady at 10%.
Live cattle futures rally amid higher cash trade… June live cattle futures on Friday rose $1.825 to $253.90. For the week, June cattle were up $5.00. May feeder cattle futures gained $3.45 to $361.45 and on the week were down $2.775. June live cattle futures closed at a technically bullish weekly high close Friday, suggesting some follow-through chart-based buying interest from the speculators early this week. Futures markets saw buying interest Friday as cash cattle prices continue to rise despite elevated beef prices at the meat counter. USDA at midday Friday reported active cash cattle trading this week, with steers averaging $262.77 and heifers $262.32. The agency earlier this week reported cash trading last week averaged $258.52. World Weather Inc. said that in the Northern Plains states livestock stress early this week could occur too as a result of the big temperature change from hot to cold. Also, some wet snow cannot be ruled out.
Lean hog futures remain trapped in a price downtrend… June lean hog futures on Friday fell $0.775 to $98.75 and for the week were up 12 1/2 cents. The hog futures market bears are in technical control amid a price downtrend firmly in place on the daily bar chart. That suggests the path of least resistance for prices will remain sideways to lower in the near term. The latest CME lean hog index is down 26 cents to $90.48. Monday’s projected cash index price is down another 2 cents to $90.46. The national direct five-day rolling average cash hog price quote for today was $94.50. Lean hog futures bulls have been spooked by the recent case of pseudorabies reported in a small facility in Iowa, which traced back to an outdoor herd in Texas with likely exposure to feral swine. Mexico last week banned some pork product imports due to the pseudorabies case in Iowa.