Good morning!
Grain futures higher overnight… At 6:00 a.m. CDT, December corn was up 2 1/4 cents and hit a two-month high. November soybeans were up 5 1/2 cents and hit a contract high. September soybean meal was up $2.90 and hit an eight-month high. September bean oil was 68 points lower. September SRW wheat was up 7 1/4 cents and hit a contract high. HRW wheat prices rose 10 3/4 cents and notched a contract high. The bull-market runs in the grains are strong to end the trading week, but don’t be surprised if some routine profit-taking pressure surfaces during today’s trading session and heading into the weekend. Also remember that summertime weather-market rallies in the grains can pop up fast and can die just as quickly. But right now the sellers appear unwilling to stand in front of a steaming locomotive. The key outside markets today see the U.S. dollar index slightly lower. September Nymex WTI crude oil prices are lower and trading around $89.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.7%.
Trump mulls “massive attack” on Iran to bring it back to negotiating table… President Trump said he’s considering a “massive attack” on Iran to push the nation to negotiate a peace deal. Trump told Axios in an interview that he was “close to making a decision” on attacks that would be “bigger than ever before.” Iran isn’t ready to make a deal and “they haven’t received enough pain yet,” Trump was reported as saying, according to Bloomberg. “The president’s remarks underscore the bind he finds himself in after renewed fighting caused an interim peace deal to collapse and all but closed the Strait of Hormuz,” the Bloomberg report said. In a Truth Social post Thursday, Trump threatened “major military punishment” on Iran and the Houthi militant group it backs in Yemen if they target commercial ships. The Houthis claimed strikes on Saudi oil tankers this week, opening a new front in a conflict that has driven crude oil prices higher..
New U.S. tariffs imposed on dozens of countries… The U.S. said it will collect duties of between 10% and 12.5% on imports from most major trading partners, following an investigation into the alleged failure of around 60 economies to prevent forced labor in their supply chains. Goods from some trading partners deemed to have adopted forced-labor restrictions will be subject to 10% tariffs, including Mexico, the U.K., Canada and India, while duties on items from the European Union and Taiwan won’t exceed 10%. The rates under the new authority took effect 12:01 a.m. EDT today, with certain exemptions, such as for products that can’t be produced in the U.S. or where tariffs would cause economy-wide disruptions.
Total New World screwworm cases detected in U.S. at 42… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 42 total New World screwworm detected cases in the U.S. There are 10 active cases, all in Texas.
Hazardous heat continues over the South, builds over Great Basin, Northern Plains... The National Weather Service today said “heat will be making weather headlines across many areas of the country.” A large upper ridge is becoming established from the intermountain West and extends eastward. The hottest conditions are expected across the lower elevations of the Desert Southwest. Heat also builds across the western High Plains from central Montana to the Dakotas through Saturday and into the Midwest on Sunday, with widespread major heat risk and extreme heat warnings, which are already in effect for much of central and eastern Montana. Heat and oppressive humidity will remain persistent from the southern Plains to Florida. Meantime, a pleasant break from the summer heat and humidity will exist across much of the Great Lakes into the Northeast.
Final results from Wheat Quality Council’s HRS tour… The Wheat Quality Council’s spring wheat and durum tour ended Thursday with the final three-day total weighted average yield estimate of 48.0 bushels per acre of 238 fields surveyed over three days. The average spring wheat yield of 218 fields was at 48.0 bu./ac. and the average durum yield of 20 fields was at 48.2 bu./ac. In the 2025 tour, the final average yield estimate was 48.3 bu./ac., with an average spring wheat yield of 49.0 bu./ac. and an average durum yield of 37.0 bu./ac.
“Global Bonds Are Reeling as Oil Surge Renews Inflation Threat”… That’s a Bloomberg headline overnight. “Global bonds are being pummeled by the latest resurgence in energy prices, delivering losses to investors who bet the worst of this year’s rout was over. The average yield on the Bloomberg Global Treasury Index has surged to 3.68%, surpassing a peak from three years ago to reach the highest since the global financial crisis in 2008. A further sell off in bond markets would add to concern that global debt levels are becoming unsustainable, push up global corporate borrowing costs and risk spurring a rotation away from stocks,” said the report. U.K. gilt yields this week set their longest period of daily closes above 5% in almost two decades, while Germany’s 10-year yield climbed to the highest since 2011. Japan’s 40-year yield jumped 10 basis points on Friday alone, while the five-year yield is at the highest since its debut in 2000. The U.S. 30-year yield is just below the highest since 2007. ”Traders are also coming to grips with new Chairman Kevin Warsh’s revamp of Fed communications designed to provide less forward guidance — raising the prospect that any change in policy may come sooner than anticipated. Bets on a rate increase at the Fed’s July 28-29 policy meeting have risen, with the market-implied probability now standing at a one-in-three chance,” said Bloomberg.
China makes big liquidity injection into its economy… China’s central bank on Friday made its biggest addition of liquidity to the economy in five months via its medium-term lending facility to support growth. The People’s Bank of China will inject 500 billion yuan into the banking system this month, resulting in a net injection of 100 billion yuan. “The addition of liquidity is a sign Beijing intends to keep liquidity ample, following disappointing economic growth data for the second quarter, and ahead of its late July Politburo meeting. The size of the liquidity operation is another sign Beijing intends to keep liquidity ample,” said Bloomberg. Meanwhile, government bond issuance is expected to rise to a record in the third quarter, putting pressure on the central bank to increase cash injections to support demand for debt, said the report.
Malaysian palm oil futures extend gains… Malaysian palm oil futures hovered around MYR 4,750 per MT Friday, extending recent gains to their highest level since early April. Sentiment was buoyed by stronger edible oils on the Dalian market, a weaker ringgit, and firmer oil prices amid persistent hostilities in the Middle East. The market was also on track for a third weekly gain, up about 3.3% so far, buoyed by higher biodiesel mandates in Indonesia and Malaysia, which are expected to boost demand for palm oil as a biofuel feedstock. In top buyer India, demand prospects improved after forecasts pointed to higher edible oil imports between July and October, as tightening supplies ahead of the festive season are likely to boost palm oil purchases. Weather concerns added further support after Kuala Lumpur warned that record-high temperatures could weigh on production next year. Meanwhile, July 1–20 export data were mixed, with AmSpec Agri noting shipments fell 0.9% from June, while Intertek Testing Services reported a 4.1% growth.
USDA monthly COF, cold storage and semiannual cattle inventory data this afternoon… The trio of USDA reports this afternoon will be watched for clues a historic cattle-market selloff has run its course. The USDA data will provide an update on the supply picture for both cattle and beef, having ramifications for price action following the peak of grilling season. Pro Farmer’s Spencer Langford breaks down what to watch when the reports hit after today’s close: Will Friday’s USDA triple play halt the cattle selloff?
Cattle futures see corrective bounces in bear markets… August live cattle on Thursday rose $2.20 to $225.40 and hit a seven-month low early on. August feeder cattle gained $2.60 to $343.775 and hit a six-week low early in the session. The cattle futures markets saw short covering and perceived bargain hunting from the speculators, as the markets had become technically overdone on the downside and were due for corrective rebounds. However, both markets remain in bearish near-term technical postures amid price downtrends still in place on the daily bar charts. Fundamentally, the recent steep drop in the cash cattle market and declining boxed beef cutout values are likely to limit further upside in futures prices. Livestock stress continues high in the Plains states and will stay high because of oppressive heat. USDA at midday Thursday reported more active cash cattle trading, with steers averaging $230.26 and heifers $230.09. The agency Monday reported average cash cattle trading last week at $238.28.
Lean hog futures bulls in the driver’s seat… August lean hog futures on Thursday rose $0.70 to $102.15, near the daily high. The lean hog futures market saw renewed chart-based buying interest, as a price uptrend remains in place on the daily bar chart. Bulls have also been encouraged by rising cash hog prices. The latest CME lean hog index is up 44 cents to $97.08. Today’s projected CME index price is up another 40 cents at $97.48. The national direct five-day rolling average cash hog price quote for Thursday was $100.67. The next upside price objective for the hog bulls is to close August futures prices above solid chart resistance at $105.00.