Good morning!
Grain futures prices down overnight… At 6:00 a.m. CDT, December corn was down 13 1/2 cents. November soybeans were down 34 3/4 cents. September soybean meal was off $7.60. September bean oil was 161 points lower. September SRW wheat was down 7 1/4 cents and September HRW wheat prices were off 7 3/4 cents. While scorching temps enveloped much of the Midwest and Plains over the weekend (see item below), they were not enough to convince the grain market bulls to continue to advance their recent buying campaigns. It also appears that sharply lower crude oil prices to start the trading week are also spooking the grain market bulls. On tap today are the weekly USDA export inspections and crop progress reports. The key outside markets today see the U.S. dollar index lower. September Nymex WTI crude oil prices are sharply lower and trading around $83.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.63%.
U.S., Iran pause hostilities; crude oil prices drop… The U.S. and Iran held off attacks on each other for a third straight night, helping lift global stock and bond markets and push down oil prices. President Trump, who last week threatened to step up attacks in Iran, is giving diplomacy “some space,” Mike Waltz, Washington’s ambassador to the United Nations, said on Sunday, Bloomberg reported. The New York Times reported Trump and his advisers decided to hold off on plans to escalate U.S. strikes, partly because of concerns about diminishing stockpiles of air defenses such as Patriot interceptors. Waltz, speaking to NBC, said American forces had all the weaponry they needed. Trump has consistently said “he prefers a diplomatic solution, but he continues to retain all options if Iran continues terrorist activities in the Strait of Hormuz or against allies,” a White House spokesman said in a statement. Still, tensions between the warring sides remain high and Iran has said there’s no change to the status of the Strait of Hormuz, meaning it’s likely to continue targeting commercial ships that don’t receive its permission before transiting. Traffic through the vital waterway — through which one fifth of the world’s oil and liquefied natural gas supplies flowed before the conflict — remains negligible.
USDA announces phased reopening of southern border for cattle trade… USDA late Friday announced “a coordinated, phased reopening of southern cattle ports, contingent on Mexico’s adherence to the Joint Action Plan. Beginning August 24, 2026, USDA will open the Douglas, AZ port of entry to cattle trade, while simultaneously initiating the operational steps necessary for subsequent openings at the Santa Teresa, NM, and Columbus, NM, ports. Every animal entering the United States through these ports will undergo a full USDA inspection to ensure it is free of any signs of New World screwworm (NWS),” said a USDA press release Friday evening. “Thanks to the work across the federal government as well as state, local, and industry partners, it is now safe to reopen the Douglas, Arizona, port in 30 days to resume the hundreds-year-old movement of cattle,” said USDA Secretary Brooke Rollins. The reopening timeline will remain flexible and may be adjusted based on Mexico’s progress in meeting Action Plan milestones and addressing critical issues, said the press release. Read: U.S. plans phased reopening of southern border to Mexican cattle imports
Total New World screwworm cases detected in U.S. still 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. since June 3. There are now 9 active cases, all in Texas.
Extreme heat bakes central, western U.S. … World Weather Inc. said in a late-Sunday dispatch that excessive heat impacted many areas in the central and western United States during the weekend. Highest temperatures reached 114 degrees at Philip, S.D., while readings of 100 to 111 were common from Montana and western North Dakota through central and western Kansas and eastern Colorado to west and north-central Texas. “Serious crop and livestock stress occurred in most of the Great Plains and portions of the intermountain West,” said the forecaster. “Hot weather will continue through this week in the Great Plains and portions of the Rocky Mountain region, with only a small amount of it reaching into the western Corn and Soybean Belt. The hottest weather will come and go around brief periods of showers and thunderstorms in the northern and central Plains, while the southern Plains and southwestern desert region stay hot throughout the week.” Showers and thunderstorms are likely in the northern U.S. Plains, upper Midwest and portions of the western Corn and Soybean Belt Wednesday into Friday of this week. “Resulting rainfall will be quite erratic and often light, but there will be some areas of significant moisture that will offer a temporary reprieve from recent heat and dryness.”
China Ministry of Commerce slams U.S. tariffs... China’s Ministry of Commerce on Monday voiced firm opposition to the U.S. decision late last week to initiate a Section 301 investigation and impose unilateral tariffs on China as part of a crackdown on forced labor, calling the move a typical act of unilateralism and protectionism and urging Washington to correct its “wrong practice” and remove relevant unilateral tariff measures, Global Times, a state-run tabloid, reported. “China is willing to continue dialogue and consultation with the US on the basis of mutual respect, equality, and mutual benefit, in order to address each other’s concerns,” a commerce ministry spokesperson said.
High heat strains U.S. power grid to the limit… “Back-to-back heat waves across the U.S. are straining electricity grids serving millions of households and businesses amid a surge in demand from data centers that require around-the-clock power,” Bloomberg reports. “Emergency alerts have been cascading across grids covering more than half of the 50 U.S. states in recent weeks, including the Midcontinent Independent System Operator and the Southwest Power Pool. The situation at PJM Interconnection LLC, which serves 67 million people, is projected to get worse in coming years, with concerns that it won’t have enough resources to navigate a major winter storm or meet periods of high demand,” said the report.
Fed’s policy meeting this week… The Federal Reserve’s Open Market Committee (FOMC) meeting begins Tuesday morning and ends Wednesday afternoon with a statement and press conference from Fed Chair Kevin Warsh. Wednesday’s rate decision “is approaching with more suspense than many anticipated after June consumer price data in the U.S. came in much cooler than expected. That’s been overtaken, however, by renewed hostilities in the Middle East,” said Bloomberg. “The resulting surge in oil prices has boosted expectations for dissent from some officials — possibly Dallas Fed President Lorie Logan and Cleveland’s Beth Hammack — who favor a rate increase now. It’s also sparked widespread discussion over whether new Chairman Kevin Warsh might surprise investors with a hike.” Said Bloomberg Economics: “We expect a hawkish hold. Warsh is likely to stress that inflation remains too high and keep a September hike in play, but the soft CPI data should be enough to prevent action this month.”
Russia may end its ban on diesel exports… Deputy Prime Minister Alexander Novak said that while Russia is extending its curb on gasoline exports through year-end, the nation plans to lift a ban on diesel exports once the market recovers, Bloomberg reported. “The diesel ban will be lifted in due course to prevent refineries from facing a glut and having to cut processing volumes, Novak told reporters in Omsk, Siberia, on Saturday, according to Interfax,” said the report. Moscow is considering extending the diesel export ban for another month as Ukraine steps up attacks on the country’s oil industry, Interfax reported.
Malaysian palm oil futures down… Malaysian palm oil futures retreated below MYR 4,700 per MT Monday, snapping recent gains after touching their highest since early April. The pullback was fueled by profit-taking, a firmer ringgit, and weakness in rival edible oils on the Dalian and Chicago exchanges. A sharp drop in crude oil added pressure, as hopes for a diplomatic breakthrough in the Middle East raised expectations of normalized shipping through the Strait of Hormuz. Still, stronger export demand helped limit losses, as cargo surveyor Intertek Testing Services estimated July 1–25 exports rose 15.9% from the same period in June. Higher biodiesel blending mandates in Indonesia and Malaysia are also set to boost consumption. In India, the world’s largest buyer, imports are forecast to rise between July and October as tightening edible oil supplies ahead of the festive season spur purchases. Weather risks remain supportive, with Kuala Lumpur warning that record-high temperatures could curb output next year.
USDA cattle data dump Friday p.m. … A trio of eagerly anticipated USDA reports on cattle inventory, cattle on feed, and cold storage, released Friday afternoon, are not likely to move futures markets in a big way early this week, doing little to offset downward pressure tied to negative packer margins and concerns about consumer affordability, while also offering no sign beef supplies are likely to grow over the next year. Cattle inventory showed the first July 1 increase since 2018, but herd rebuilding still appears to be a slow affair. Cattle on feed as of July 1, June placements and marketings, meanwhile, were all somewhat below market expectations. The heifer-steer ratio, a proxy for heifer retention, came in at 37.4%, up a meager 0.1% from last quarter but down 0.7% from the previous year. USDA Cold storage data also showed beef stocks down 3% from month-ago and year-ago levels, indicating consumer demand was likely slightly firmer than was seen the month prior. Read Pro Farmer’s full breakdown of the data here: USDA’s Cattle Report shows first year-over-year inventory increase since 2018
Cattle futures bulls showing a pulse… August live cattle futures on Friday rose $1.675 to $227.075 and for the week up $2.65. August feeder cattle futures gained $1.55 to $345.325 and for the week were down 62 1/2 cents. The cattle futures markets Friday saw some follow-through buying from Thursday’s rebounds. Two sessions in a row of decent gains in the cattle futures markets, including Friday’s technically bullish weekly high close in August live cattle, are early clues the bears may finally be exhausted and market bottoms might be in place. Still, the futures market bulls are still timid amid falling cash cattle prices. USDA at midday Friday reported active cash cattle trading, with steers averaging $230.37 and heifers $230.08. The agency reported average cash cattle trading the week prior at $238.28.
Chinese government works to lift domestic pork prices amid glut… The Chinese government’s campaign to lift domestic pork prices is finally gaining traction. But the rally is running into a familiar obstacle: consumers still aren’t buying enough, said a Bloomberg report. State-ordered capacity cuts and financial losses among breeders are starting to reduce supply. After hitting a 16-year low in June, wholesale pork prices have risen nearly 7% this month. That’s helpful for the government’s priorities of fighting deflation and securing rural incomes. But oversupply persists and the recovery is likely to be drawn out. Still,, the price increase is noteworthy because summer is usually a low season for demand. But broader consumption trends aren’t favorable, suggesting supply still needs to shrink and that any recovery is likely to be gradual and grinding.
Lean hog futures prices still trending up… August lean hog futures on Friday rose $0.70 to $102.85, hit a nine-week high and for the week were up $1.20. The hog futures market saw more technical buying interest from the speculators amid charts that are bullish as prices are in a solid uptrend on the daily bar chart. Friday’s technically bullish weekly high close only adds to that bullish chart posture heading into futures trading this week. The latest CME lean hog index is up 40 cents to $97.48. Today’s projected CME index price is up 43 cents at $97.91. The national direct five-day rolling average cash hog price quote for Friday was $100.60.