Good morning!
Grain futures markets modestly weaker overnight… As of 6:00 a.m. CDT, December corn futures were down 1 1/2 cents. November soybeans were down 2 cents and December winter wheat futures were around 1 to 2 cents lower. The grains overnight saw mild corrective pullbacks following good gains posted Thursday. If the grain markets can close out today with their prices at or near their weekly highs, such would be a positive signal that near-term market bottoms are in place. Trading may be muted the next couple of sessions, as market participants await next Tuesday’s monthly USDA supply and demand report. A Dow Jones Newswires survey of grain analysts shows they expect U.S. corn production this year at 15.991 billion bushels, with an average yield of 184.3 bushels an acre. U.S. soybean production is seen at 4.371 billion bushels and an average yield of 53.0 bushels an acre. All U.S. wheat production is seen at 1.925 billion bushels. The key outside markets today see the U.S. dollar index slightly lower. Nymex crude oil prices are firmer and trading around $64.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.25 percent.
Derecho hits North Dakota, southern Saskatchewan and Manitoba, Minnesota… World Weather Inc. early this morning reports a large cluster of thunderstorms that evolved in Montana Thursday afternoon advanced across much of North Dakota and far southeastern Saskatchewan, Canada, to southern Manitoba and western Minnesota overnight. The storms produced damaging wind, hail and heavy rainfall. “The system will likely be classified as a Derecho, although an assessment of the wind damage will need to be made before the event is officially classified as a Derecho,” said the forecaster. This is the second Derecho of the season with the first event reported last month in South Dakota, southwestern Minnesota and parts of Iowa.” Thunderstorms began developing Thursday afternoon over central Montana with peak wind gusts reaching between 40 and 80 mph. By dawn today, the storms had reached west-central and northwestern Minnesota, and a strong line of severe thunderstorms had evolved, producing a wind-gust front and generating some very heavy rain and hail. Peak wind gusts through the overnight hours reached 91 mph west of Grand Forks, North Dakota, although that report had not yet been confirmed. Most of the peak wind speeds varied from 50 to 75 mph as the storms advanced a minimum of 240 miles, which is required for a derecho, said World Weather.
Global food prices on the rise… The United Nations Food and Agriculture Organization (FAO) Food Price Index increased 1.6% to 130.1 points in July, the highest level since February of 2023, as increases in prices for meat and vegetable oils offset declines in cost for cereals, dairy and sugar. Overall, the food price index was 7.6% higher than in July of 2024 yet remained 18.8% below its peak reached in March 2022. Meat prices increased 1.2% to reach a new record high, primarily driven by higher bovine and ovine meat prices, along with a slight increase in poultry meat prices. Also, prices for vegetable oils jumped 7.1% to a three-year high amid higher quotations for palm, soy and sunflower oils, which more than offset the decline in rapeseed oil. Cost for cereals dropped 0.8% to 2020-lows amid lower quotations for sorghum and wheat. Sugar prices were down 0.2%, a fifth consecutive monthly fall, and dairy costs edged down 0.1%, the first decline since April 2024, driven by lower international prices for butter and milk powders. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
Japan’s rice crop getting scorched… Record high temperatures in Japan could hurt the country’s rice production, threatening to create shortages of the staple grain and price spikes. Kazunuki Ohizumi, professor emeritus at Miyagi University, said that due to the heat and drought, it is almost certain that both yields and distribution volume will decrease, according to a Bloomberg report. The Ministry of Agriculture, Forestry and Fisheries said that this year’s rice production will be known after the autumn harvest, and the risk may spread to other regions depending on future weather conditions.
Waller may be front-runner for Fed chairman… Bloomberg reports President Trump’s advisers are impressed with Federal Reserve Governor Christopher Waller’s willingness to move on policy based on forecasting and his deep knowledge of the Federal Reserve system. Waller, along with Kevin Warsh and Kevin Hassett, is a top candidate to serve as the central bank’s chair, according to Bloomberg. White House Spokesman Kush Desai said that “President Trump will continue to nominate the most competent and experienced individuals” for personnel decisions, but any discussion about them should be regarded as speculation unless it comes from Trump himself. Meantime, Trump said he has chosen Council of Economic Advisers Chairman Stephen Miran to fill the seat of Fed Governor Adriana Kugler, but only until January.
Gold price surges on confusion over U.S. tariffs on bullion… A U.S. move to put tariffs on imports of one-kilogram and 100-ounce gold bars is prompting keen uncertainty the global bullion market and threatening to disrupt trade from Switzerland and other major refining hubs, including London and Hong Kong. The U.S. Customs and Border Protection agency has clarified that the gold bars face tariffs and are not exempted as the industry had initially understood,as reported by Bloomberg and first reported by the Financial Times. Gold futures prices rallied today as traders, analysts and market watchers try to understand the ramifications of the U.S. tariffs on bullion. Switzerland’s gold exports have become a flashpoint in its trade negotiations with the U.S., after a surge in shipments earlier this year caused the U.S.’s trade deficit with Switzerland to spike. “Traders and analysts are scrambling to understand the situation — whether the tariffs are already in force, if they apply to all countries, or even how they might be avoided. Some questioned whether the dramatic change could be an error on the CBP’s part and suggested it may be subject to legal challenges,” said the Bloomberg report.
Palm oil futures end trading week with solid gains… Malaysian palm oil futures rose 1% to above MYR 4,280 per MT, ending a two-session losing streak and supported by a weaker ringgit and gains in rival Dalian palm and Chicago soybean oil. Prices were also supported by optimism that top buyer India may start early purchases in August and September, ahead of the Diwali festivals in mid-October. In Indonesia, the world’s largest producer, biodiesel consumption remained strong, driven by the higher 50% blending mandate.
Live cattle futures technically short-term overbought… The Relative Strength Index (RSI) shows August live cattle moving into overbought territory, meaning a downside correction is due soon. The cattle futures markets Thursday showed late-session price surges and continued to rack up contract/record highs amid rising boxed beef prices and still-elevated cash cattle prices. Live cattle futures traders this week have narrowed futures’ discounts to the cash cattle market. Light cash cattle trading as of midday Thursday saw steers fetching an average price of $240.25 and heifers averaging $237.00, according to USDA. Last week’s average cash cattle price was a record high $243.17
Lean hog futures bulls fading a bit… The lean hog futures market Thursday saw profit-taking pressure following recent gains that pushed October futures to a three-week high Wednesday. Losses in futures were limited by a jump in wholesale pork prices at midday. The latest CME lean hog index quote is $109.60. Friday’s projected price quote (for Aug. 6) is up 50 cents at $110.10.
Today’s reports—Friday
--3:00 pm Peanut Prices