Good morning!
Grain futures markets weaker overnight… Corn, soybean and wheat futures markets saw some corrective selling pressure in overnight price action, following good gains scored late last week. As of 6:30 a.m. CDT, corn prices were down around 2 cents, soybeans off around 8 cents and winter wheat futures were around 2 higher. The key “outside markets” for the ag futures markets today see the U.S. dollar index lower, with Nymex crude oil prices near steady and trading around $67.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently fetching 4.38%.
Midwest weather still leans overall slightly price-bearish for corn, soybeans… World Weather Inc. Sunday evening reported rainfall in the coming week “will be frequent and abundant enough to bolster or maintain soil moisture across the northern Plains, northern and eastern Midwest and from portions of the Tennessee River Basin into the southeastern states.” Temperatures this week “will be very warm to hot from the central through the southern Plains,” said the forecaster. A high-pressure ridge is expected over the next couple of weeks in the central parts of the U.S., “although it will be of weak amplitude and probably will not have much negative impact on summer crops except in the central and southern Plains,” said World Weather.
EU preparing for trade retaliation against U.S. if no agreement reached… The European Union is making plans for retaliation against the U.S. in a scenario where there is no trade agreement reached by the U.S.-imposed deadline of Aug. 1, Bloomberg reports. The U.S. is seeking a near-universal tariff on EU goods that is higher than 10%, with increasingly fewer exemptions. EU and U.S. negotiators are heading into more talks this week. The U.S. says a deal needs to be reached by Aug. 1, at which time President Trump has threatened to slap 30% tariffs on EU exports to the U.S. Reports say the two sides are so far at an impasse.
Bangladesh agrees to import U.S. wheat to ease tariff threats… Reports say Bangladesh signed a trade deal Sunday to import 700,000 MT of U.S. wheat annually for five years. This is an effort to ease trade tensions with the U.S. and avoid new tariffs. The memorandum of understanding came ahead of a planned 35% tariff on Bangladesh’s exports to the U.S. starting Aug. 1. “This step reflects our willingness to build mutual trust and deepen economic cooperation,” said Bangladesh Food Minister Ali Imam Majumder. Bangladesh imports about 7 million MT of wheat annually, mostly from the Black Sea.
Palm oil prices down to start trading week… Malaysian palm oil futures fell around 1% Monday, on profit taking after recent gains and amid signs of some weaker demand. Losses in palm oil were limited as Malaysian authorities raised the August crude palm oil reference price.
EU sanctions on Russian diesel fuel won’t kick in until January…The European Union said a new set of sanctions restricting the supply of diesel fuel made from Russian crude oil won’t take effect until January, easing concerns the measures would tighten an already strong diesel fuel market. Bloomberg reported the EU said the ban will take effect on Jan. 21, 2026. The EU announcement last Friday it would ban the import of refined products, most notably diesel, that are produced in third countries using Russian crude oil. Bloomberg said the new sanctions will prevent one of the main workarounds of previous sanctions on Russian oil supplies. Buyers of Russian oil, such as India, have been processing the crude, bought cheaply from Russia, and then selling the fuels they produce to Europe.
China holds its key interest rates steady…The People’s Bank of China kept its key lending rates unchanged at its latest meeting, in line with market expectations. The one-year loan prime rate—the main rate for corporate and household loans—was held steady at 3.0%.
U.S. Treasury Secretary Bessent lobbies Trump to not fire Powell… The Wall Street Journal reports Treasury Secretary Scott Bessent is trying to convince President Trump not to fire Federal Reserve Chairman Jerome Powell. Trump firing Powell would cast doubts over the Fed’s independence, would likely pressure the U.S. dollar and would push up Treasury yields, Bessent reportedly warned. News reports last week that Trump was set to fire Powell sent shudders through the financial markets and pushed gold prices higher. Soon after that news surfaced, Trump said he is not considering firing Powell.
Global central banks likely to cut their rates due to U.S. tariffs… Bloomberg Economics reports that while President Trump is strongly urging the Federal Reserve to cut U.S. interest rates, central bankers around the world are likely to ease their monetary policies. “The U.S. president’s tariff onslaught is likely to force further measured easing in coming months by most of the 23 central banks featured in the quarterly guide on the global monetary outlook,” said Bloomberg Economics.
Summer doldrums sapping stock market bulls… The S&P 500 stock index has gone 17 sessions in a row without a move of 1% in either direction. That’s the longest stretch of listless price action since last December, reports Matt Maley at Miller Tabak & Co. Whenever a narrow rally loses steam, it usually signals most of the good news has been factored into stock prices.
Cattle futures bulls remain strong…Price action in the cattle futures markets has turned choppy and mostly sideways at elevated levels recently, which slightly favors the bulls. Cash cattle and beef market fundamentals have deteriorated a bit but remain overall bullish. The average cash cattle trading price for last week, released by USDA near midday today, is likely to show lower prices fetched last week. Packers have been reluctant to bid up for cattle supplies given negative cutting margins. A high-pressure ridge is expected to gradually strengthen and build into the Plains states in the next two weeks, which will lead to increasing heat and dryness and could start to become an issue for livestock stress, especially in the southern two-thirds of the region.
Lean hog futures bulls show resilience, too… Hog futures posted good corrective price gains last week, including a technically bullish weekly high close Friday. That suggests follow-through buying from the speculators is likely early this week. Cash hog and pork market fundamentals are also improving to suggest the hog and pork futures markets have put in a seasonal bottoms. The latest CME lean hog index is up 43 cents to $107.63 as of July 16.
Today’s reports
- 10:00 a.m. Weekly Export Inspections — AMS
- 10:00 a.m. Food Expenditure Series — ERS
- 1:00 p.m. U.S. Bioenergy Statistics — ERS
- 2:00 p.m. Chickens and Eggs — NASS
- 3:00 p.m. Crop Progress — NASS