Good morning!
Grain futures firmer overnight… At 6:00 a.m. CDT, December corn was up 3 1/2 cents. November soybeans were 4 1/4 cents higher. September soybean meal was up $0.30. September bean oil was 20 points higher. September SRW wheat was up 2 1/2 cents and September HRW wheat prices were 4 1/4 cents higher. The grain bulls are working to stabilize their markets but price downtrends remain in place on the daily bar charts. Short covering was featured overnight. More position evening may occur in the grain markets the next few sessions, ahead of Wednesday’s USDA Crop Production Report. The key outside markets today see the U.S. dollar index near steady. September Nymex WTI crude oil prices are slightly down and trading around $77.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.67%.
Trump: Iran-Oman Hormuz negotiations “moving along” … President Trump said negotiations between Iran and Oman over the shipping in the Strait of Hormuz are “moving along,” despite some Iranian lawmakers seeking to bar American and Israeli ships from the waterway. A draft bill under review by Iran’s parliament includes a demand for compensation from “hostile countries,” a proposed ban on cargo related to Israel, and a fee structure covering services like insurance and environmental costs. Arab mediators are concerned that Iran’s diplomats may not be able to guarantee compliance with any agreement reached, and tensions remain high, with Iranian naval forces striking “hostile targets” at the entrance to the strait. ”Both the U.S. and Iran have been signaling in recent days that some kind of deal on the Strait of Hormuz is close, but it’s unclear whether Iran’s Supreme Leader Mojtaba Khamenei has given his consent to the proposal, a condition for it to go ahead. Iranian officials have said that communicating with him takes time,” said Bloomberg.
Farm bill fails… Senate Democrats rejected a Republican-drafted farm bill Thursday in a dispute over Supplemental Nutrition Assistance Program (SNAP) benefits, further raising doubts over a viable timeline for passing the long-sought legislation. A Senate Agriculture Committee vote to advance the legislation failed in a 10-11 party line vote. Sen. Mitch McConnell, R-Ky., has been absent since suffering a fall in June, while Sen. Tommy Tuberville, R-Ala., was absent during the final vote. Democrats have insisted on a two-year delay to a requirement that would require states to pay a portion of benefit costs based on payment error rates. Senate Agriculture Committee Chairman John Boozman had offered a one-year delay. The bill includes language that would allow year-round sales of E15, a long-sought priority for corn producers. Boozman pledged to hold another vote once the Senate returns from an upcoming recess in September.
Scattered thunderstorms rumble across central U.S., Plains today into Saturday… The National Weather Service today said, “Our weather story remains largely unchanged this weekend as an expansive dome of mid/upper-level high pressure builds over the Four Corners. This feature will usher in dangerously hot weather to much of the West as daytime temperatures climb into the triple digits.” By early next week, hot weather returns to the Plains states, with temperatures climbing into the upper-90s and triple digits. Meanwhile, an approaching front in the Dakotas will yield thunderstorms today and tomorrow east of the Rockies. As is typical for August, any thunderstorms will be capable of producing isolated heavy rainfall and severe weather. Across the Southwest, monsoonal moisture will likely produce daily showers and thunderstorms with the threat of locally heavy rain and isolated flash flooding this weekend.
Total New World screwworm cases detected in U.S. remain at 45… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 45 total New World screwworm detected cases in the U.S. There are five active cases, all in Texas.
It’s jobs, jobs, jobs Friday! … Economists expect this morning’s highly anticipated July employment situation report from the U.S. Labor Department to show a stable, low-momentum U.S. labor market. Surveys of analysts and economists expect a rise in the key non-farm payrolls number of around 85,000 jobs. The overall unemployment rate is expected at 4.2%, steady from the June report. Average hourly earnings are forecast to remain stable at a 3.5% annualized growth rate (or roughly 0.3% month-over-month). The average workweek is expected to hold steady at 34.3 hours. “The swaps market has been assigning more than a 50% chance of a quarter-point hike on Sept. 16. These odds edged higher Thursday after the Financial Times reported that Fed Chairman Kevin Warsh is prepared to raise rates if inflation readings are hot in the coming weeks. Weakness in the U.S. labor market could cool concerns that it is fanning inflation. U.S. inflation data for July, including the consumer and producer price indexes, are due next week, potentially sealing the direction of interest rates,” said a Bloomberg report.
High input costs and uncertainty to keep cattle inventories low, beef prices high… Despite favorable market signals, including strong consumer demand, the supply constraints in the cattle market may keep beef prices elevated for some time, according to a report from the Kansas City Fed. “Growing uncertainty in the conditions for raising cattle have prevented ranchers from meaningfully expanding herds to increase domestic supply. Continued uncertainty may stall herd rebuilding, further constraining the beef supply and driving up prices,” said the report. “Prices for beef have risen as U.S. consumption of beef has increased and domestic production has contracted. Despite beef price increases, beef consumption in the United States is expected to be 8 percent higher in 2026 than its average over the last 20 years, likely due to strong U.S. consumer demand for proteins in general and a high affinity for beef in particular. In contrast, domestic beef production is projected to decline in 2026 from historical averages. While imports have closed the gap between domestic production and consumption, higher domestic beef prices indicate that imports have not been cheap enough to put considerable downward pressure on beef inflation,” the report said, adding that history suggests that current, early signs of herd rebuilding could stall amid the high costs of herd expansion and heightened uncertainty in cattle production. If ranchers decide to liquidate their herds further, beef inflation may remain high for some time.
World food prices highest since 2023… The United Nations’ FAO Food Price Index rose 0.6% to 131.1 points in July, the first increase in three months and reaching the highest level since January 2023. Sugar prices jumped 5.6%, amid concerns about the potential impacts of persistent hot and dry weather on crop yields in the EU and of El Niño-related weather conditions on production prospects in key producing countries in Asia. Also, cereals went up 3.4%, with wheat prices soaring 5.8% amid heightened concerns over continued disruptions to Black Sea export flows and damage to export infrastructure, as well as the impact of recent heatwaves on crop yields in several producing countries. Prices for vegetable oils increased 2% to June 2022-highs, reflecting higher palm and soy oil prices. On the other hand, meat prices decreased 2.8%, the first monthly decline in 2026, reflecting lower quotations across all meat categories except ovine meat. Dairy cost edged down 0.7% to the lowest since October 2023, led by butter and milk powders.
China’s exports surge 24% in July… China’s exports rose 23.9% year-on-year to USD 397.85 billion in July, surpassing forecasts of a 22.2% rise but easing from June’s 27.0% growth. The increase was driven by strong demand for AI-related technology products and a rush by manufacturers to ship goods to the U.S. ahead of potential new tariffs. The U.S. applied a new 12.5% levy on Chinese products in late July, replacing a temporary 10% levy that had lapsed. Exports of semiconductors almost doubled in value terms from last year, and overall high-tech product exports soared 40.7%. Among its trading partners, outbound shipments advanced to the U.S. (17.05%), Japan (14.0%), South Korea (46.6%), the EU (15.95%), and ASEAN (38.36%). For the first seven months of the year, total exports climbed 18.5%, year-on-year, to USD 2.52 trillion, according to China’s General Administration of Customs.
Malaysian palm oil futures extend declines… Malaysian palm oil futures on Friday hovered below MYR 4,700 per MT, extending recent declines as weakness in Dalian palm olein and Chicago soyoil weighed on sentiment. Traders also grew cautious ahead of next week’s monthly report from the Malaysian Palm Oil Board, while Reuters survey pointed to July inventories at a five-month high as seasonal output outpaced demand. Even so, palm oil was still tracking a modest weekly advance of about 0.5% so far, recovering from prior losses. Demand prospects in top buyer India offered support, with July imports surging to a 10-month high as refiners stocked up on palm oil and soyoil ahead of festive demand amid tightening domestic supplies. Exports also underpinned prices, with cargo surveyors estimating July Malaysian palm oil shipments rose between 12.1% and 19.5% from June. In China, another major consumer, July trade data showed resilient exports and imports despite moderating growth, reinforcing a broadly supportive backdrop for commodity demand.
Cattle futures markets see heavy profit taking, weak long liquidation… October live cattle on Thursday fell $4.55 to $224.925. September feeders lost $6.80 to $341.575. The cattle futures markets today saw heavy profit-taking pressure following recent gains. Weak long liquidation was also featured. No chart damage was inflicted today but significant follow-through selling today would likely negate the near-term price uptrends in both markets. World Weather Inc. today said livestock heat stress will prevail in the Plains states during much of the next two weeks, making weight gains a challenge. USDA at midday Thursday reported more active cash cattle trading at higher money so far this week, with steers averaging $235.19 and heifers $234.91. The agency Monday reported cash cattle trade last week averaged $233.06, which compares to an average of $230.48 fetched the week prior.
Lean hog futures see fresh technical selling pressure… October lean hog futures on Thursday fell $1.30 to $81.725 and hit a four-week-low. The hog futures market saw more technical selling from the speculators featured as prices have seen a downside breakout from a bearish pennant pattern on the daily bar chart. Sharp losses in cattle futures Thursday also spilled over into selling in hog futures. The cash hog market is still trending down, to keep the bears in control. The latest CME lean hog index down 22 cents to $96.95. Today’s projected CME index price is down 29 cents at $96.66. The national direct five-day rolling average cash hog price quote for Thursday was $99.37.