Good morning!
Grain futures mixed overnight… At 6:00 a.m. CDT, July corn was down 3 1/4 cents and hit another contract low. July soybeans were off a penny but not far above Thursday’s nearly four-month low. July soybean meal was up $0.20. July bean oil was 6 points higher. July SRW wheat was up 2 1/2 cents after hitting a seven-week low overnight. July HRW was down 3/4 cent but also near its six-week low posted on Thursday. The grain market bulls are working late this week to stop the bleeding but are so far having little success. Relative Strength Index (RSI) technical indicator readings for most of the aforementioned markets are presently at oversold levels which coincide with near-term market bottoms being put in place over the past 12 months. Still, the grain markets are in danger of seeing further chart damage occur if technically bearish weekly low closes occur today. High-range daily closes in a trading session would be one early clue of seller exhaustion in the grains. For example, July corn has gone 12 trading sessions in a row without a daily close near the session highs. The only day that came close was May 28, which saw July corn close just above mid-range. The key outside markets today see the U.S. dollar index weaker, while Nymex WTI crude oil prices are slightly weaker and trading around $93.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.47%.
New World screwworm update… USDA Secretary Brooke Rollins on Thursday afternoon said her agency is working to contain New World screwworm after a case was detected in Texas and which could impact the U.S. meat industry and the domestic cattle herd. The agency is implementing quarantines, movement controls and surveillance in a zone around the detection site to prevent a bigger outbreak, which depends on fencing in the screwworm fly. The parasite was confirmed on Wednesday in a three-week-old calf in South Texas. The agency is implementing quarantines, movement controls and surveillance in a 12-mile zone around the detection site in Zavala County. Rollins said there were no other infested animals on the ranch where the case was confirmed and that there is no evidence of recent movement of animals onto or off of the premises. “This fly typically moves great distances because humans move animals, not because the fly flies to new areas,” Rollins said on the late-Wednesday call. “This is a really important point. The only way this spreads is through animal movement. It’s not because the fly flies tens of miles or hundreds of miles on its own.” The Meat Institute, the industry group representing meatpackers, said in a statement that it will look to the USDA “to brief industry stakeholders and call on them to consider allowing low-risk terminal movements for slaughter to ensure animals continue to be processed.” That includes animals headed straight to slaughter that don’t come from infested zones or are raised indoors.
Latest on U.S.-Iran war…
--U.S. and Iran show little progress in talks, after week of clashes
The U.S. and Iran have made little progress in talks over an interim peace deal, with clashes continuing in Lebanon. Iran insists on a ceasefire in Lebanon before accepting a deal with the U.S. to extend their truce and reopen the Strait of Hormuz. President Trump said negotiations are in the “final” stages, while Iran’s Foreign Minister Abbas Araghchi said there had been “no tangible progress” in the talks. Skirmishes continued overnight between Hezbollah and Israel in southern Lebanon. However, Hezbollah’s attacks on northern Israel have eased, while Israel has held off striking Beirut after threatening to do so earlier this week.
It’s jobs, jobs, jobs Friday! … This morning’s monthly employment situation report from the Labor Department is expected to show the U.S. economy added 85,000 non-farm payroll jobs in May, marking a modest slowdown after two consecutive months of non-farm payroll job gains exceeding 100,000. The unemployment rate is forecast to remain unchanged at 4.3%. Average hourly earnings are projected to rise 0.3% month-over-month, accelerating slightly from April’s 0.2% increase. On an annual basis, however, wage growth is expected to ease to 3.4% from 3.6%. The May report is expected to continue to reflect a resilient labor market, with the prevailing low-hire, low-fire dynamic remaining firmly in place. However, some analysts suggest that this dynamic may be evolving amid structural shifts in the economy, including rising adoption of AI and other emerging pressures. TradingEconomics.com
Stormy weather persists over Plains, central U.S. into weekend… The National Weather Service today said scattered showers and thunderstorms will occur over parts of the southern Plains, southern Rockies, the Midwest and the Lower Mississippi Valley from today into Sunday morning. Today, showers and thunderstorms will produce heavy rain over the southern Plains. There is a slight risk (level 2/4) of excessive rainfall over parts of the southern Plains through Saturday morning. Severe thunderstorms are possible over parts of the central Plains and the middle Mississippi Valley. There is a slight risk (level 2/5) of severe thunderstorms over parts of the central Plains and the middle Mississippi Valley through Saturday morning. Also, a front moving over the Northern High Plains will trigger showers and severe thunderstorms.
S&P 500 weekly winning streak on the line… The S&P 500 this week may break a historic weekly run of gains as the artificial-intelligence trade takes another leg lower, with investors also expecting U.S. payrolls data to affirm that interest rates will stay higher for longer. Contracts for the index dipped 0.5% overnight after a flat performance for the week so far. A slide today would mean that the benchmark misses out on a 10th week of gains, which would be the longest such streak since 1985. Nasdaq-100 futures fell a further 1% overnight, following Thursday’s rotation out of chipmakers. Stocks are pulling back after Broadcom Inc.’s outlook for chip sales fell short of high expectations, raising questions over whether the rally in the AI trade had run too hard,” said a Bloomberg report.
CME Group very concerned about perpetual futures… Terry Duffy, the chief executive officer of CME Group Inc., said on Thursday he is “very concerned” about the rise of so-called perpetual futures, an increasingly popular kind of financial contract that recently won key U.S. regulatory approval. “Duffy said that perps, as they are known, will have little practical use for institutional investors at the same time that they give retail traders access to excessive levels of risk, Bloomberg reported. “I have grave concerns with the way these contracts are set up,” Duffy said Thursday at the Piper Sandler Global Exchange & Fintech Conference. “I don’t like to see people that don’t understand products to potentially get blown out of a contract that they shouldn’t be in the first place.” Duffy’s comments came just days after the Commodity Futures Trading Commission signed off on the first perps tied to the price of cryptocurrencies. Perps allow traders to take leveraged positions on an asset’s future price without the expiration dates that govern traditional futures contracts.
Trump confident U.S.-India will conclude trade deal… President Trump expressed confidence that Washington and New Delhi will strike a long-awaited trade agreement after negotiators wrapped up a fresh round of talks this week, said a Bloomberg report. “We’ll get to a deal, because I like, you know, I like your prime minister a lot,” Trump told reporters in the Oval Office Thursday, referring to Narendra Modi. “He’s a good friend of mine. We get along great, and we’re going to make a deal. We have a very good relationship.” Trump’s remarks came hours after India’s commerce ministry said both sides remained committed to concluding a bilateral trade pact. A U.S. delegation led by chief negotiator Brendan Lynch was in New Delhi this week to push the process forward and iron out details for an interim agreement.
India testing E85 gasoline… India is set to launch a new high-ethanol fuel blend, called E85, which will contain about 85% ethanol and pollute less than its conventional counterparts. The new blend will be initially sold at 50 pumps in the country, and its wider adoption may depend on E85 fuel being priced competitively against E20 gasoline. The government is mulling policy measures to accelerate the adoption of hybrid-fuel vehicles, and sees the deployment of vehicles compatible with hybrid fuels as a faster pathway that requires modest infrastructure investment. Bloomberg
World food prices remain elevated: FAO… The United Nations’ Food and Agriculture Organization (FAO) Food Price Index edged down 0.2% to 130.8 points in May 2026 from an upwardly revised 131 points in April, which was the highest reading since January 2023. Prices of cereals rose 2.6% reaching the highest level since June 2024, reflecting higher prices across all major cereals. World wheat prices rose for the fourth consecutive month, supported by smaller-than-expected harvests in major exporters, including the U.S., while higher fuel and fertilizer costs added further upward pressure, globally. In addition, sugar prices soared 7.5% mainly driven by concerns over an anticipated tightening of global sugar supplies in the coming months. Meat costs edged up 0.1% with higher quotations for bovine and ovine meat. In contrast, dairy prices decreased 0.5% to reach the lowest level since January 2024 and vegetable oils cost tumbled 4.6% mainly driven by lower prices of palm and soy oils, which more than offset increases in rapeseed oil and sunflower oil prices.
Malaysian palm oil futures slip to end trading week… Malaysian palm oil futures on Friday slipped for a second session, hovering below MYR 4,600 per MT as weaker rival oils on China’s Dalian Exchange weighed on sentiment. Expectations of rising inventories added pressure, with Reuters projecting May stockpiles climbed for a second month. Cargo surveyors estimated exports fell 8.8%–15.5% from April, underscoring subdued demand. Purchases by India, the world’s largest palm oil importer, recovered slightly from April’s four-month low but remained below normal levels. Still, Still, futures were on track for a third weekly gain, up 0.7% so far, supported by a weaker ringgit that boosts export competitiveness. Crude oil also headed for solid weekly gains as Washington–Tehran talks stalled, enhancing palm oil’s appeal as biodiesel feedstock. Longer-term support stems from dry weather across Asia and forecasts of a severe El Niño, raising concerns over crop output and edible oil supplies.
Cattle futures traders sell the rumor, buy the fact on NWS… August live cattle on Thursday rose $3.675 to $241.525 after hitting a nine-week low early on. August feeder cattle rallied the $10.75 daily limit to $353.375 after hitting a 5.5-month low early in the session. Expanded limits of $16 for feeder futures and $12.75 for live cattle are in effect Friday The cattle futures markets Thursday saw big and technically bullish “outside days” up on their daily bar charts. Cattle traders on this day decided to “buy the fact” on news of a case of New World screwworm detected in Texas. On Wednesday cattle traders “sold the rumor” of the parasite spreading north. The NWS situation is still fluid and cattle futures markets may remain volatile. The bullish aspect of the situation is reduced cattle supplies coming from Mexico and now possibly from the far southern U.S. The potentially cattle-price-bearish aspect of NWS is possible negative U.S. consumer psychology toward beef (less demand) that could result from the flesh-eating parasite and the general news media hyping the situation. USDA at midday Thursday reported active cash cattle trading, with steers averaging $256.02 and heifers $255.75. Last week’s average cash trading price was $256.86--down $3.63 from the prior week’s average.
Lean hog futures pause… August lean hog futures on Thursday fell $0.30 to $99.275, near the daily high. The lean hog futures market paused after two sessions of good gains. While near-term charts remain bearish, more gains in lean hog futures to end the trading week would begin to suggest a near-term market bottom is in place. The latest CME lean hog index is up 60 cents at $92.25. Today’s projected cash index price is up another 26 cents at $92.51. The national direct five-day rolling average cash hog price quote today is $94.48. August lean hog futures bears have the solid overall near-term technical advantage. Prices are in a steep downtrend on the daily bar chart.