Good morning!
Grain futures mixed overnight… At 6:00 a.m. CDT, July corn was down 3/4 cent and hit a contract low. July soybeans were up 2 3/4 cents. July soybean meal was up $2.80. July bean oil was down 41 points. July SRW wheat was up 3/4 cent and July HRW was 1 1/2 cents higher. The grain market bulls are being hamstrung by very good growing conditions for the U.S. corn and soybean crops, with no threats on the horizon, as well as the steep downdraft in crude oil prices and the powerful rally in the U.S. dollar index. More and more, it’s looking like it’s going to take a summertime weather-market scare to jump-start rallies in the grain markets. And with extended weather forecasts now out into early July with no threats in the Midwest, the window is beginning to close on a serious weather scare in the corn market. On tap today is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index slightly down after hitting a 13-month high Wednesday. August Nymex WTI crude oil prices are lower, hit a nearly four-month low and are trading around $69.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.41%.
New World screwworm cases detected in U.S. rise to 20… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 20 total New World screwworm detected cases in the U.S. and all still in Texas and New Mexico, with the newest one in Texas. There are 17 active cases, all in Texas. Four cases of NWS have been confirmed on the same Texas property, marking the largest cluster of detections to be reported since the parasite was found in the U.S. earlier this month, Bloomberg reported. “Three cattle and one goat were detected to have screwworm in Terrell County, which is adjacent to Mexico, according to USDA. All were from a single premises, the Texas Animal Health Commission said in a Wednesday email. Another bovine case surfaced late Wednesday in Medina County, according to USDA,” said the report.
Stormy weather over central U.S.; heat in the West, South… The National Weather Service today said strong storms could quickly turn severe across the central/southern Plains this afternoon and evening, bringing the potential for damaging winds, large hail, and a few tornadoes. Coverage of severe weather is expected to diminish after today, although isolated severe storms remain possible from the High Plains to the Ozarks through at least Saturday. Southern Kansas to south-central Missouri could see flash flooding later this afternoon and evening. The focus for heaviest rainfall is then forecast to shift into the Midwest and lower Ohio Valley tomorrow and Saturday, which could yield widely scattered flash flooding. In contrast to the unseasonably cool and dry air mass encompassing the northern Plains, Great Lakes, Northeast, and Mid-Atlantic this afternoon, hot weather continues across much of the West. This heat will begin to subside Friday. While the West cools down, a downwind upper-level ridge will expand and intensify the hot weather across the southern U.S. through the end of the week, with highs soaring well into the 90s to near 100.
Crude oil prices continue to slide as Hormuz traffic flowing… The Brent crude oil futures market has erased all of its wartime gains after flows through the Strait of Hormuz ramped up following progress on a US-Iran peace deal. The global benchmark pushed lower for a fourth session, dropping below $72.48 a barrel — its prewar closing price — before fluctuating around that level. West Texas Intermediate hovered below $70. “Key parts of the market are suddenly awash with supply, with buyers inundated by offers from the Middle East, a dramatic reversal that’s led to widespread price weakness. The retreat marks the culmination of a dramatic few months for oil, in which futures topped $125 a barrel and real-world barrels soared to records, only to subsequently collapse. Price forecasts for a worst-case scenario were avoided thanks to slumping demand — particularly in China — as well as pipeline workarounds in the Middle East and massive releases from emergency stockpiles,” said a Bloomberg report.
Key U.S. inflation report on deck today… The U.S. PCE price index is expected to rise 0.5% month-over-month in May, accelerating from a 0.4% increase in April, as higher energy costs linked to the conflict with Iran continue to put upward pressure on prices. The core PCE index, which excludes food and energy, is projected to increase 0.3%, up from 0.2% in the previous month. On an annual basis, headline PCE inflation is forecast to accelerate for a third consecutive month to 4.1%, the highest reading since April 2023, compared with 3.8% in April. Core PCE inflation is also expected to edge higher to 3.4% from 3.3%, marking its strongest pace since late 2023. Overall, the report is likely to reinforce the view that inflationary pressures remain elevated in the U.S. economy. The PCE report is said to be the most closely watched inflation data by the Federal Reserve. TradingEconomics.com
China seeking Australian oilseeds to crush… Chinese oilseed crushers have made inquiries for fresh cargoes of Australian canola in anticipation of a trade pact that could end a years-long freeze on supplies, according to a Bloomberg report. “Since 2020, the two countries have suspended trade in the commodity — also known as rapeseed — due to so-called phytosanitary concerns, which can include plant disease. But Chinese state-run trader Cofco International Ltd. resumed booking of shipments on a trial basis last year, stoking hopes of a wider resumption. More crushers, including private companies, are expected to win approval to import Australian canola soon, according to traders, who asked not to be named because they’re not authorized to speak to media. Private processors were making inquiries for delivery in the fourth quarter, they said,” according to the Bloomberg report. The Australian government said today it is in active and ongoing government-to-government discussion, and that details have not yet been finalized.
Big earnings beat by Micron suggests AI growth surge to continue… Micron Technology Inc., the largest U.S. maker of computer memory chips, surged in premarket trading after its quarterly sales forecast crushed Wall Street estimates, signaling that an AI-fueled growth run remains strong. Revenue will be approximately $50 billion in the fiscal fourth quarter, which runs through August, the company said in a statement Wednesday. Analysts estimated $43.2 billion on average. Excluding some items, profit will be about $31 a share, compared with a projection of $25.31. Micron “can mitigate the boom-and-bust cycles that have plagued the memory chip industry,” said Bloomberg Intelligence analyst Jake Silverman. “This should sustain upward pricing revisions through at least 2027, albeit at a decelerating pace,” he said in a note.
European Union gives final okay on trade deal with U.S. … The European Union’s U.S. trade deal is set to go into effect after the bloc gave its final sign-off. The EU will erase levies on U.S. industrial goods and some agriculture products in exchange for a 15% tariff ceiling on its U.S. exports. Still, the U.S.-EU trade relationship remains strained due to unresolved disagreements over issues like metals tariffs and technology regulations.
Malaysian palm oil futures sell off… Malaysian palm oil futures slid almost 2% to below MYR 4,600 per MT Thursday, marking a one-week low and registering losses of over 2% so far this week. Sentiment weakened amid a stronger ringgit and weaker edible oil prices on Dalian and Chicago exchanges. Meanwhile, crude oil prices eased toward pre-conflict levels, eroding palm oil’s competitiveness and biofuel appeal. Pressure also followed Malaysia’s cut to its July crude palm oil reference price, though the export duty stayed at 10%. Still, losses were tempered by firm export demand, with cargo surveyors estimating June 1–20 shipments rose 19.1%–25% from the same period in May. Meantime, supply concerns lingered as El Niño continued to curb output. In top producer Indonesia, the B50 biodiesel mandate will kick off on July 1, potentially expanding domestic use. Meanwhile, India’s June palm oil imports are projected above 600,000 MT, compared with 549,356 MT in May, underscoring resilient demand from the world’s largest buyer.
Cattle futures bulls in firm control… August live cattle on Wednesday rose $0.525 to $246.525. August feeder cattle gained $4.775 to $372.925 and hit a six-week high. The cattle futures markets saw technical buying and also support from ongoing concerns about reduced beef supplies coming out of Texas due to the NWS detections in the state. The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 20 total New World screwworm detected cases. The cattle bulls were also somewhat assuaged by Wednesday’s rebound in the U.S. stock market, after solid losses Tuesday. USDA at midday Wednesday reported light cash cattle trading so far this week, averaging $260.00. Last week’s cash cattle average trading price was $259.63, up $3.55 from the week prior.
Lean hog futures see chart-based selling ahead of quarterly USDA H&P data… August lean hog futures on Wednesday fell $0.525 to $96.70. The lean hog futures market saw some modest technical selling and a corrective pullback from four sessions in a row of price gains in the August contract. More price gains late this week would negate the price downtrend to suggest a market bottom is in place. Hog traders are awaiting this afternoon’s quarterly USDA hogs and pigs report. The size of the U.S. hog herd was slightly larger on June 1 than a year earlier, according to a Reuters survey. All hogs inventory as of June 1 is expected to be 100.9% of the herd seen one year ago at the same time. Kept for breeding is seen at 99.3% from June 1, 2025. Kept for market numbers are seen at 101.1% from a year ago. The March-May pig crop is seen at 101.2% from June 1 of 2025. The latest CME lean hog index is down 17 cents at $91.47. Today’s projected cash index price is up 38 cents $91.95. The national direct five-day rolling average cash hog price quote Wednesday was $96.73.