Good morning!
Grain futures prices mixed-firmer overnight… As of 6:00 a.m. CST, July corn was up 2 cents and poked to a three-week high. July soybeans were 2 3/4 cents up. July soybean meal was up $1.00 and July bean oil was 39 points higher. July SRW wheat was up 3 1/2 cents and hit a three-week high. July HRW was 1/2 cent lower after hitting a nearly two-year high overnight. Wheat is the price-strength leader in the grains complex at present. See item below, which might be a bit worrisome to the wheat market bulls. The key outside markets see Nymex WTI crude oil prices higher and trading around $97.50 a barrel. The U.S. dollar index is slightly weaker. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.33 percent.
Latest on the war in the Middle East…
--U.S. works to get Iran to the peace talks table; so far no success
--U.S. will sink any boat laying mines in Strait of Hormuz
--Iran war to keep gas market tight for two more years, IEA Says
--Goldman says Persian Gulf oil supply 57% below pre-war level
The U.S. increased pressure on Iran with its naval blockade, as it seeks to get Tehran to agree to talks, while Israel and Lebanon are set to extend a ceasefire for three weeks. President Trump ordered the U.S. Navy to shoot any boat putting mines in the Strait of Hormuz, after the military intercepted two oil supertankers that tried to evade restrictions on traffic to and from Iran’s ports. The move by Trump, who claimed Iran is laying sea mines in the strait, is part of the White House’s attempt to cut off the country’s oil exports, squeezing it economically and forcing it to make concessions that will help end the war. “I have all the time in the World, but Iran doesn’t — The clock is ticking!” Trump said in a Truth Social post, according to Bloomberg. Trump’s allies say the blockade will force Iran to start shutting down crude production — its main source of foreign-exchange earnings — within about two weeks. JPMorgan Chase & Co. analysts have said it may take closer to a month for the U.S. to achieve that goal.
Needed but spotty rains coming to southern Plains… The National Weather Service today said widespread showers and thunderstorms will continue across portions of the south-central U.S. through Sunday afternoon, while also spreading into the eastern U.S. tomorrow. Today, the greatest thunderstorm coverage is expected over the lower Mississippi Valley and Southeast. There is also a slight risk of severe storms across this same general area on Friday, and an enhanced risk of severe storms remains across portions of Kansas and Oklahoma on Saturday as stronger dynamics and instability overlap. The severe weather threat is likely to continue over a similar area on Sunday. Warmer-than-average weather for late April will persist from the central Plains to the Mid-Atlantic on Friday. Meanwhile, a much colder airmass will ooze southward from Canada behind the strong cold front and affect Montana and the Dakotas with March-like temperatures to close out the work week. Winter weather advisories, and freeze warnings are in effect along and west of the Continental Divide to close out the work week.
General business media picking up on wheat futures markets rally… There’s an old commodity market trader adage that says when the general business media reports on a big price move in a commodity market, that price move is probably near an end. Following are nuggets from a Bloomberg story out late Thursday that was headlined, “Wheat at Highest Since 2024 as Drought Stokes Food Inflation.”
--“Traders may be finally understanding that the crop damage is unlikely to be reversed and yield declines are inevitable, despite the potential for precipitation,” the Hightower Report said in a note.
--The National Drought Mitigation Center raised the percentage of U.S. winter wheat affected by the drought to 70% on April 21, compared with 50% on Feb. 24.
--Kansas Wheat said the March and April period was crucial to wheat development, and without additional moisture some crops were accelerating growth — potentially further reducing production. “That process shortens the grain fill period and can reduce yield potential, resulting in smaller kernels, lighter test weights and, in more severe cases, blank heads,” the industry association said in a note on Thursday.
--Hard red wheat’s premium over soft red winter is at 62 cents a bushel, the widest in two and a half years.
Global fertilizer giant racking up big profits… Fertilizer giant Yara International ASA posted higher-than-expected first quarter earnings as the U.S.-Iran war effectively halted transit through the Strait of Hormuz, hurting global trade of crop nutrients and pushing up prices. The Oslo, Norway-based company reported adjusted earnings before interest, taxes, depreciation, and amortization of $896 million, an increase of 40% from a year earlier and ahead of the $807 million estimated by analysts. Revenue rose 17% over the same period. “The war in the Middle East has hit global energy and fertilizer markets, bottling up ships loaded with key raw materials for fertilizer production in the Persian Gulf area, leading to a shortage and therefore a sharp increase in global prices of the key crop inputs. That has allowed producers with global production capacity, such as Yara, to sell at higher prices,” said a Bloomberg report.
China raising its export prices may be global inflation warning… Chinese exporters are lifting prices on their goods due to the Iran war driving up oil-linked input costs, signaling that global consumer inflation is likely to accelerate, said a Bloomberg report. “More than a dozen categories of household goods saw sharp year-on-year price increases in March, with products reliant on rubber, plastic and oil-derived chemicals seeing spikes. The detailed breakdown provides a snapshot of how the U.S.- Iran-war induced energy shock is rippling through China’s economy and on to retailers around the world, with Bloomberg Economics estimating above-3% inflation in 2026 is ‘back in play’ across major economies,” said the report.
Positive U.S.-China relations sign: Chinese pandas coming to U.S. before summit meeting… Beijing is sending two pandas to the U.S., adding to signs of stabilizing ties between the nations. A male panda named Ping Ping and a female named Fu Shuang are part of an agreement reached with the China Wildlife Conservation Association, according to Zoo Atlanta. The new deal replaces the original one, which expired in 2024, and comes before President Trump’s planned meeting with China’s leader Xi Jinping in mid-May.
Currency market carry trades are “revving up”… “DoubleLine Capital and Van Eck Associates Corp. are among investors seeing renewed appeal in a currency strategy that’s revving up as the Middle East ceasefire helps steady markets and reignite risk appetite,” reports Bloomberg. “The carry trade — borrowing where interest rates are low and investing where they’re high — was already thriving as the war sparked a surge in oil prices that boosted commodity currencies such as Brazil’s real and Colombia’s peso. But now it’s getting turbocharged by the relative ebbing of international tensions, which has caused volatility in currencies, bonds and stocks to collapse. That backdrop is giving investors confidence that exchange rates won’t swing abruptly against them, as happened in 2024 when the trade combusted and roiled markets broadly,” said the report.
Malaysian palm oil futures post gains to end trading week… Malaysian palm oil futures rose modestly, hovering near MYR 4,600 per MT after a recent pullback and on track for their first weekly gain in three. Support came from a weaker ringgit and firmer crude oil prices amid renewed Middle East tensions, boosting biodiesel-linked demand. The Malaysian Palm Oil Council expects prices to stay above MYR 4,500 in the near term, helped by elevated energy costs and potential El Niño risks. Expectations of stronger demand from top buyer India also grew after March shipments fell 19% mom. Simultaneously, Malaysia is moving toward a higher biodiesel blend, targeting B15 from the current B10, a move that could absorb up to 1-1/2 million tonnes annually and tighten supply in line with regional efforts to curb fuel imports. Gains, however, were capped by weak exports, with cargo surveyors noting April 1–20 shipments down about 25.6%–25.8% from March. Softer imports of key commodities in China, notably soybeans, may further weigh on the edible oils outlook.
Cattle futures post mild upside corrections… June live cattle on Thursday rose $0.425 to $243.50 after hitting a three-week low early on. May feeder cattle gained $0.45 to $358.875 and also hit a three-week low early on. The cattle futures markets saw modest corrective rebounds from selling pressure and lower closes the last five sessions in a row for live cattle and six in a row for feeders. Those recent losses that have produced significant near-term chart damage to suggest market tops are in place. USDA at midday Thursday reported active cash cattle trading taking place at lower money so far this week, with steers averaging $246.02 and heifers $246.00. Last week’s average cash cattle trade was $248.02.
Lean hog futures also see corrective bounce… June lean hog futures on Thursday rose $0.825 to $103.45. The hog futures market saw short covering and perceived bargain hunting featured. The latest CME lean hog index is up 54 cents at $91.05. Friday’s projected cash index price is up another 38 cents at $91.43. The national direct five-day rolling average cash hog price quote today is $70.75. USDA Thursday reported weekly U.S. pork export sales totaled 16,100 MT for 2026 during the week ended April 16. That was a marketing year low. Net sales were down 57% from the previous week and 60% from the four-week average.