Good morning!
Grain futures prices steady-firmer overnight… As of 6:00 a.m. CST, July corn was up 3/4 cent. July soybeans were 3/4 cent up. July soybean meal was down $2.30 and July bean oil was 81 points higher. July SRW wheat was up 7 1/2 cents and July HRW was 9 cents higher. The winter wheat markets led the gainers overnight following a weekend freeze in U.S. HRW country. (See item below.) Some keener risk aversion in the general marketplace to start the trading week may constrain the grain market bulls today.
On tap today is the weekly USDA export inspections and weekly crop progress reports. The key outside markets see Nymex WTI crude oil prices solidly up and trading around $88.50 a barrel. The U.S. dollar index is a bit firmer. The yield on the benchmark 10-year U.S. Treasury note is presently around 4.27 percent.
Latest on the war in the Middle East…
--Iran wavers on peace talks as tensions rise after U.S. seizes Iranian ship
--Strait of Hormuz shipping traffic grinds to a halt as tensions deepen
--Trump says envoy Witkoff heading to Pakistan for Iran talks
--Trump says Iran committed ‘serious violation’ of ceasefire: ABC
--IEA head pitches Iraq-Turkey oil pipeline to bypass Hormuz
--U.S. preparing to board Iran-linked ships in coming days: WSJ
--U.S. official says Iran attacked commercial ships in Hormuz: Axios
Iran wavered on whether to send diplomats to Pakistan for a second round of peace talks after the U.S. maintained a blockade of the Strait of Hormuz and seized an Iranian ship, dimming hopes of a breakthrough in efforts to end the war. Tehran has no plans to attend the potential negotiations though a final decision hasn’t been made, Foreign Ministry spokesman Esmail Baghaei told reporters on Monday, according to Bloomberg. “There are various indications that there is no seriousness on the U.S. side in advancing diplomacy,” he added. His comments added to uncertainty over the weekend about whether the two sides will meet before a nascent ceasefire announced April 7 expires late U.S. time on Tuesday. President Donald Trump said Sunday that special envoy Steve Witkoff is traveling to Pakistan for talks on Tuesday, according to Fox. Said Trump in a social media post: “We’re offering a very fair and reasonable DEAL, and I hope they take it because, if they don’t, the United States is going to knock out every single Power Plant, and every single Bridge, in Iran.” Trump added: “NO MORE MR. NICE GUY!”
U.S. HRW wheat regions see “harsh” freezes over the weekend… “Another wild swing in temperatures occurred in the central U.S. Plains during the weekend, maintaining a harsh environment for winter wheat,” said World Weather Inc. in a special report. “The crop has already been beaten up by drought and wild temperature swings over the past few months and speculation is running high over the impact of all this on production.” Weekend temperatures plummeted well below freezing from Nebraska to northwestern parts of Texas Panhandle and Colorado, “threatening the crop with more complications in recovering from previous damage.” There is still some potential for rain April 26-28 in the northwestern production areas and in the southwest during early May, “but confidence is still not high as to how timely the precipitation will be after harsh weather conditions recently and during the winter,” said World Weather.
China tightens border controls to battle foot-and-month disease in cattle… China has tightened its border controls, fast-tracked vaccines and begun culling cattle after a small outbreak of foot-and-mouth disease in the northwest part of the country that officials say entered from abroad. China’s Ministry of Agriculture said it has started culling animals and disinfecting affected areas after outbreaks hit herds totaling 6,229 head in Gansu province and the Xinjiang Uighur Autonomous Region, said The Straits Times. “Industry analysts said it was the first time the SAT-1 serotype – a type of the disease endemic in Africa – had been detected in China, and that existing domestic vaccines for the more common O and A serotypes do not provide protection. Since 2025, SAT-1 has spread from Africa to parts of the Middle East, West Asia and South Asia,” said the report.
Global stagflation worries on the rise… The cumulative global economic impact of seven weeks of war in the Middle East will begin to emerge this week, in a second round of business surveys from multiple countries. “Whether the twin blows affecting growth and inflation seen in purchasing manager indexes after the first month of the Iran conflict intensified during month two will be a key focus. The initial take for April in economies from Australia to the U.S. will be published on Thursday. Indexes in Germany, France, the euro zone and the UK are all anticipated to show broad deterioration, while the American indicators are seen little changed,” said a Bloomberg report. “Ultimately, the numbers may point to the degree that stagflation is lurking. That ominous term — evoking the noxious mix of surging prices and stalling growth of the 1970s.” Even if the war ends tomorrow, it would take quite some time for the recovery to kick in, said IMF Managing Director Kristalina Georgieva to Bloomberg. This week’s major U.S. economic data release will be retail sales. Economists project a sizable jump in overall sales for March, largely due to sharply increased spending on gasoline. The International Monetary Fund has trimmed its global growth forecast for 2026 due to the oil-price shock from war in the Middle East. The IMF sees the world economy expanding 3.1% this year, down from a January forecast of 3.3%, and raised its inflation estimate due to higher energy and food prices.
Agriculture and Agri-Food Canada’s (AAFC) March outlook… The AAFC report for the 2025-2026 and 2026-2027 crop years shows that for most crops in Canada, producers find market uncertainty in both Canadian and global grain markets “remains elevated, primarily due to persistent geopolitical factors that continue to disrupt trade flows and market stability.” For 2025-26, total production of principal field crops reached a new record, rising well above both last year’s level and the recent five-year average. This larger harvest is expected to support strong export activity, which, despite easing slightly year-over-year (y/y), is projected to remain above the five-year average. Carry-out stocks for major field crops are forecast to increase sharply y/y, reflecting the record production and a modest decline in exports. Prices for most crops are expected to weaken y/y, although corn, canola, soybeans, and mustard seed are forecast to see modest gains, said the report.
USDA breaks ground on new sterile fly production facility to combat New World Screwworm… USDA Secretary Rollins and Lieutenant General Butch Graham of the U.S. Army Corps of Engineers on Friday led groundbreaking for the new sterile fly production facility at Moore Air Base in Edinburg, Texas. USDA is partnering with the Corps of Engineers to construct the facility, “which is a cornerstone of Secretary Rollins’ five-pronged strategy to combat New World Screwworm (NWS), expanding the nation’s domestic capacity to protect livestock, wildlife, and public health from this serious pest,” said a USDA press release. “Breaking ground on this facility marks a major investment in safeguarding America’s livestock and the producers who feed this nation. This puts NWS sterile fly production in American hands, so we do not have to rely on other countries for the best offensive measure to push screwworm away from our borders,” said Rollins.
Malaysian palm oil futures firmer... Malaysian palm oil futures hovered around MYR 4,480 per MT Monday after briefly slipping below MYR 4,440 in the prior session, tracking firmer prices on the Dalian exchange and gains in soyoil on Chicago markets. Strength in global oil prices also lent support, after renewed tensions between the U.S. and Iran, lifting energy markets. On the demand side, purchases from India, the world’s largest palm oil importer, are expected to recover after a 19% drop in March shipments. Locally, Malaysia’s palm-based biodiesel consumption is projected to rise by over 300,000 MT annually, according to the industry regulator, as the country aligns with Indonesia in advancing blending mandates to reduce reliance on imported fuels. However, gains were capped after Statistics Malaysia reported a modest fall in March exports of palm oil and related products, reflecting weak demand after the festive season. Separately, cargo surveyors noted April 1–15 palm oil shipments plunged over 34% month-on-month.
USDA monthly cattle-on-feed report: U.S. herd continues to shrink… Friday afternoon’s monthly USDA Cattle-on-Feed report showed U.S. cattle and calves on feed for the slaughter market on feedlots with capacity of 1,000 or more head totaled 11.6 million head on April 1. The inventory was 1 percent below April 1, 2025. The inventory included 7.26 million steers and steer calves, down slightly from the previous year. This group accounted for 63 percent of the total inventory. Heifers and heifer calves accounted for 4.32 million head, down 1 percent from 2025. Placements in feedlots during March totaled 1.71 million head, 7 percent below 2025. Net placements were 1.66 million head. Placements were the second lowest for March since the series began in 1996. During March, placements of cattle and calves weighing less than 600 pounds were 320,000 head, 600-699 pounds were 250,000 head, 700-799 pounds were 435,000 head, 800-899 pounds were 474,000 head, 900-999 pounds were 170,000 head, and 1,000 pounds and greater were 60,000 head. Marketings of fed cattle during March totaled 1.63 million head, 6 percent below 2025. Marketings were the second-lowest for March since the series began in 1996. Other disappearance totaled 50,000 head during March, 9 percent below 2025.
Cattle futures markets see more profit-taking pressure… June live cattle futures on Friday fell $0.275 to $247.35 after hitting a two-week low early on. For the week, June cattle were down $1.85. May feeder cattle futures lost $1.825 to $365.275 and hit a nearly three-week low early on. For the week, May feeders were down $7.075. The live cattle and feeder cattle futures markets saw technically bearish weekly low closes Friday, which may set the table for follow-through, chart-based selling and weak long liquidation early next week. However, the bulls can correctly argue Friday’s high-range closes indicate the bears may be short-term exhausted. Still, the near-term technical posture for both markets did deteriorate late last week. USDA at midday Friday reported active cash cattle trading late this week, with steers averaging $248.08 and heifers $248.21. The agency earlier last week reported cash trading last week averaged $248.38.
Technicals remain bearish for lean hog futures… June lean hog futures on Friday fell $0.625 to $101.05, hit a four-month low and for the week were down $2.675. The lean hog futures market today saw another technically bearish weekly low close, which sets the market up for follow-through chart-based selling pressure from the speculators early this week. The sell off in the cattle futures markets late last week also limited buying interest in hog futures. The latest CME lean hog index is up 6 cents to $90.66. Today’s projected cash index price is down 15 cents at $90.51. The national direct five-day rolling average cash hog price quote for Friday was $69.80.