Good morning!
Grain futures prices weaker early today… As of 6:00 a.m. CDT, December corn futures were down 2 cents, November soybeans down 6 1/4 cents and winter wheat futures were down around 2 cents. The corn market bulls have bent this week but they have not been broken and appear to have stabilized prices.The soybean market continues choppy and sideways but November beans are in danger of seeing a technically bearish weekly low close today. SRW and HRW wheat futures are trading sideways at lower levels, which could be “basing” action that soon puts in, or has already put in, market bottoms. The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are a bit higher and trading around $66.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.418%.
NWS: Dangerous heatwave develops across Southeast this weekend... The National Weather Service says a slow- moving front will produce thunderstorm activity from the central Plains to the northeast, “within a moisture-rich environment today. Storms occurring over relatively saturated soils may pose a flash flooding threat, which is why a slight risk of excessive rainfall is in effect for portions of eastern Kansas, northern Missouri, southern Iowa, Illinois and Indiana.” Unusual heat and humidity remain in place from the Middle Mississippi/Ohio Valleys through early next week, while building across the Southeast and Mid-South this weekend. Heat will be most persistent and dangerous across the Southeast and Tennessee Valley. These conditions will likely create livestock stress. “Heat will reach levels that would affect anyone without sufficient cooling and/or adequate hydration, particularly across the Southeast,” said the NWS. This includes high temperatures in the upper-90s to near 100 degrees, with heat indices potentially exceeding 110-115 degrees. “This will be a long duration heat wave, with little to no overnight relief and high humidity levels, leading to an increased danger.”
Trump criticizes Powell at Federal Reserve headquarters, but not going to fire him… On Thursday afternoon President Trump visited the Federal Reserve and its building renovations. Trump and Powell bickered on camera over the price of the renovations. Regarding U.S. monetary policy, Trump said, “I just want to see one thing happen, very simple: interest rates have to come down.” However, Trump signaled he’s not keen on firing Powell, saying, “I think he’s going to do the right thing. Everybody knows what the right thing is.”
China’s budget deficit rises to record… China’s budget deficit climbed to a fresh record in the first half of 2025, highlighting intensified government efforts to boost domestic demand as President Trump’s tariffs reduce Chinese exports to the U.S. The broad fiscal gap reached 5.25 trillion yuan ($733 billion) in January-June, according to Bloomberg and based on data released by the Chinese Finance Ministry Friday. China’s budget shortfall rose 45% from a year earlier.
EU-China summit yields little significant results… Expectations were low going into the European Union’s summit with China in Beijing this week, and they were met. The first in-person meeting between the EU and Chinese leadership since 2003 made little progress in terms of concrete commitments, Bloomberg reports. “EU Commission President Ursula von der Leyen and Council President Antonio Costa pulled no punches on China’s trade practices in their closing press conference, calling out Beijing’s support for Russia amid its invasion of Ukraine, and reiterating their view that the trading relationship is critically unbalanced.” China and the EU did agree on a plan to identify supply chain bottlenecks and endorsed a joint statement on climate, “in one bright spot of unity,” reported Bloomberg.
U.S., South Korea vow to reach trade deal… South Korea and the U.S. reaffirmed their commitment to reach a trade agreement ahead of the Aug. 1 U.S.-imposed deadline when U.S. tariffs are set to rise. U.S. Commerce Secretary Howard Lutnick and South Korea’s Industry Minister Kim Jung-kwan discussed sector and reciprocal tariffs Thursday, with Kim Jung-kwan emphasizing the need to ease trade barriers. Both sides agreed to strengthen manufacturing cooperation and continue discussions.
Trump lauds Australia lifting of curbs on U.S. beef imports… President Trump Thursday praised Australia’s decision to lift import curbs on U.S. beef amid trade negotiations between the two countries. This comes after Trump said Australia’s biosecurity measures were an unfair impediment to trade. “For a long time, and even though we are great friends, they actually banned our beef. Now, we are going to sell so much to Australia because this is undeniable and irrefutable proof that U.S. beef is the safest and best in the entire world,” Trump said on his social media platform Thursday night. Trump added that “other countries that refuse our magnificent beef are ON NOTICE.”
Palm oil futures prices lose altitude Friday… Malaysian palm oil futures prices were down over 2%, below MYR 4,250 per MT, snapping a three-session winning streak amid weakness in Dalian palm olein. Signs of higher palm oil output also pressured prices after the Malaysian Palm Oil Board projected production to rise to 19.5 million tons in 2025 from 19.3 million last year.
USDA cattle-on-feed report out this afternoon… Today’s monthly USDA cattle-on-feed report is expected to show cattle on feedlots of more than 1,000 head, as of July 1, at 99.2% of the level seen one year ago at the same time. Placements in June are seen at 98.0% of year-ago levels, with marketings in June seen at 96.4% from last year at the same time. This comes from a Reuters survey of analysts. Monthly USDA cold storage data is also out this afternoon.
Some late-week profit-taking in cattle futures markets… Thursday the cattle futures markets saw routine profit-taking pressure after hitting contract/record highs on Wednesday. Very light cash cattle trade has occurred so far this week, as expected ahead of this afternoon’s cattle-on-feed report. The lighter trade saw steers so far fetching an average price of $231.88 and heifers averaging $230.90, according to USDA.
Mild corrective pullback in lean hog futures… The lean hog futures market Thursday saw some mild profit taking after seeing a steady climb from the mid-July low. Technicals that are becoming more bullish and lean hog futures’ discount to cash hog index are limiting selling interest in futures. The latest CME lean hog index is up 64 cents to $109.23 as of July 22. Friday’s projected CME cash index price is up 72 cents at $109.95.
Today’s reports--Friday
10:00 a.m. Food Price Outlook — ERS
2:00 p.m. Dairy: World Markets and Trade — FAS
2:00 p.m. Cattle — NASS
2:00 p.m. Cattle on Feed — NASS
2:00 p.m. Cold Storage — NASS
2:00 p.m. Farm Production Expenditures — NASS
2:00 p.m. Peanut Prices — NASS
2:00 p.m. Peanut Stocks and Processing — NASS
2:00 p.m. Poultry Slaughter — NASS
2:30 p.m. Commitments of Traders — CFTC