Good morning!
Grain futures down overnight… At 6:00 a.m. CDT, December corn was down 5 1/2 cents. November soybeans were down 7 1/2 cents. September soybean meal was down $2.20 and September bean oil was up 9 points and hit a four-week high. December SRW wheat was down 4 1/4 cents and HRW wheat was down 5 1/2 cents. It’s a Turnaround Tuesday for the grain futures markets, following Monday’s price gains. Some weather forecasters overnight upped their rainfall chances for the Midwest over the next week and a half, which is denting the case for a weather-market rally continuing for corn and beans. The key outside markets today see the U.S. dollar index modestly down. August Nymex WTI crude oil prices are higher and trading around $80.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.63%.
Total New World screwworm cases detected in U.S. remain at 35… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 35 total New World screwworm detected cases in the U.S. There are 19 active cases, all still in Texas.
High heat moving east from the northern Plains… The National Weather Service today said a strong upper-level high-pressure system responsible for the recent all-time high temperature records in the West will continue to build eastward through the northern-tier states toward the East Coast over the next few days. This weather pattern will prolong the heat and humidity across the northern Plains to the Great Lakes, where high temperatures ranging from 95 to 105 will break some daily high temperature records this afternoon. Extreme heat warnings remain in effect across a large portion of the Great Basin through the northern Plains.
Nymex WTI crude back above $80 as Iran says Hormuz closed…. “The interim peace between the U.S. and Iran has effectively collapsed after American forces reimposed a naval blockade and launched another wave of airstrikes, while Tehran attacked more oil tankers sailing through the Strait of Hormuz,” Bloomberg reported overnight. President Trump’s decision to restart a blockade of Iranian ports overnight came after hostilities between the two sides worsened in the past week, with tensions centered on control of the strait. Traffic through the all-important waterway has dwindled and oil has surged 20% since attacks rekindled, with Brent trading above $86 a barrel and WTI above $80. The U.S. launched airstrikes at military sites in several southern Iranian towns and cities over a five-hour period on Monday night. Iran targeted U.S. bases in Jordan and Bahrain and hit two oil tankers from the United Arab Emirates with cruise missiles. The latter attack killed an Indian crew member and wounded about eight others. Trump late on Tuesday said the strait was “open” but added to the chaos for energy companies and shippers by saying he would demand a reimbursement fee of 20% on all cargo shipped through. That would account “for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” he said on Truth Social.
USDA crop progress updates: “Good” to “excellent” ratings for U.S. corn, soybeans and wheat all came in above analyst estimates in Monday afternoon’s USDA weekly crop progress reports, defying expectations for slight deterioration in soybeans and spring wheat. The corn crop was rated 68% “good” or “excellent” as of July 12, up a percentage point from last week and a point above the average estimate. Corn was 74% good-to-excellent at the same time last year. The Pro Farmer Crop Condition Index (on a 0-to-500 scale, 500 equals perfect) offers a single, weighted figure that’s used by analysts to gauge crop potential during the growing season. The corn CCI reading registered the most influential improvement in Ohio, which saw a 0.66-point increase, though multiple other states also saw increases of less than a point to raise the national total 2.01 points to 373.63. The USDA data showed 65% of the soybean crop rated good or excellent, up a percentage point from last week and defying analyst expectations for a decline to 63%. Last year, soybeans were rated 70% good or excellent. The Pro Farmer CCI for soybeans rose 0.95 point from last week, with increases generally seen along the Delta and Southern U.S. states while steady to slightly lower ratings occurred in most of the Midwest. Spring wheat was rated 58% good or excellent, up a percentage point from a week ago and two percentage points above the average analyst guess. The Pro Farmer CCI for spring wheat rose 0.81 point. Click here for a full rundown of state and national CCI ratings for U.S. crops. The USDA data showed 67% of the winter wheat crop had been harvested as of Sunday, up from 59% a week ago but shy of expectations at 69%. Last year at this time harvest was 63% complete.
Fed Chairman Warsh on deck before Congress… Kevin Warsh today makes his first appearance before Congress as Federal Reserve chairman. This morning’s House Financial Services Committee hearing will be preceded by June consumer price figures from the Bureau of Labor Statistics. On Wednesday, shortly after the BLS releases U.S. producer price data, Warsh will testify before a Senate committee. The CPI and PPI inflation reports are expected to show some relief following a surge in prices from March to May. Markets currently imply 24% probability of a July Fed rate hike. CPI is expected to slow to below 4%, annually, in June from May’s three-year high of 4.2%. Core CPI is forecast to hold at 2.9%, on an annual basis, the highest since last September.
China using more Australian canola… China will allow its private oilseed crushers to buy Australian canola, as the two countries move to normalize a trade that’s largely been halted since the start of the decade, Bloomberg reports. Some private crushers were told they can apply for permits to import the crop, as part of a trial program that should presage an official agreement between the two governments to fully open up the trade. Beijing halted imports of Australian canola in 2020, citing plant health concerns, but has now revised the phytosanitary rules for canola shipments to China.
China’s monthly trade surplus the second highest ever… China’s trade surplus widened to $125.62 billion in June, up from $113.84 billion a year earlier and exceeding forecasts of $121 billion. This marked the second-largest monthly surplus on record as both exports and imports grew more than expected, fueled by soaring chip prices and global demand for AI data center hardware. Exports surged 27% to a record $412.39 billion, while imports jumped 36%, the fastest increase in five years, to an all-time high of $286.76 billion. China’s trade surplus with the U.S. rose to $28.9 billion in June from $26.02 billion in May. The surplus with Germany more than doubled year-on-year, and with the EU, it widened by 27% to a record $32.9 billion. In the first half of 2026, China’s trade surplus reached $575.98 billion, down from $586 billion a year earlier, as exports rose 17.6% while imports grew at a faster pace of 26.6%. TradingEconomics.com
“Brazil’s First Ethanol-Powered Ship Sails in Win for Biofuels”… That’s the headline from a Bloomberg story overnight. The first container ship to run on Brazilian-made ethanol fuel is scheduled to sail from the port of Santos, bound for Asia, in an unprecedented test for the nation’s biofuel industry. “The use of ethanol as bunker fuel creates a potentially huge market for biofuel makers and farmers in Brazil, and widespread adoption of the fuel in shipping could lead to a substantial reduction in global emissions,” said the report. The global shipping industry accounts for as much as 3% of global greenhouse gas emissions, and the initial voyage comes as the International Maritime Organization prepares to enforce a global net-zero framework for ocean vessel transportation, said Bloomberg.
Malaysian palm oil futures gain… Malaysian palm oil futures on Tuesday climbed almost 1% to above MYR 4,550 per MT, recovering from recent losses as a weaker ringgit and firmer edible oil markets in Dalian and Chicago markets lifted sentiment. Gains were further supported by a rally in oil prices on concerns over potential disruptions to energy flows through the Strait of Hormuz. Exports also improved, with cargo surveyors noting July 1–10 shipments rose 1.6%–5.1% from June. In top supplier Indonesia, rising biodiesel mandates to B50 are expected to boost domestic consumption. However, upside was capped by news that EU imports of palm oil derivatives will be subject to the bloc’s anti-deforestation rules from Dec 2027, while June data showed Malaysian inventories grew 4.8% mom as production rose 8.1% on seasonal output. In India, imports fell to a 14-month low in June amid weak demand and narrowing discounts to rival oils. Traders stayed cautious ahead of China’s Q2 GDP prints after solid June trade data from the major buyer.
Cattle futures markets pause Monday… August live cattle on Monday fell $0.475 to $234.725. August feeder cattle lost $0.25 to $354.35. The live and feeder cattle futures markets saw short covering and perceived bargain buying for most of the session, following recent losses that last Friday pushed both markets to multi-week lows. However, those gains could not be held into the close. Buying interest will likely be limited in the near term as prices are still in downtrends on the daily bar charts. In the Northern Plains, excessive heat has severely stressed livestock. The heat in the Plains is expected to persist in the coming days. USDA at midday Monday reported last week’s cash cattle trading averaged $248.01, down $7.11. from the week prior’s average $255.12.
Lean hog futures see profit-taking pressure… August lean hog futures on Monday lost $0.90 to $98.10 after hitting a six-week high early on. The hog futures market saw some routine profit taking but the bulls are keeping alive a price uptrend on the daily bar chart. BLT season is right around the corner and that has been supporting fresh wholesale pork prices. The latest CME lean hog index is up 34 cents to $92.69. Today’s projected CME index price is up 42 cents at $93.11. The national direct five-day rolling average cash hog price quote for today is $96.92. August lean hog futures see a price uptrend still in place on the daily bar chart.