Good morning!
Grain futures weaker overnight… At 6:00 a.m. CDT, December corn was down 1 1/2 cents. November soybeans were 5 1/4 cents lower. September soybean meal was down $2.10. September bean oil was 24 points lower. September SRW wheat was down 3/4 cent and September HRW wheat prices were off 5 1/4 cents. The grain markets are seeing routine downside price corrections and some profit taking from the shorter-term traders heading into the weekend. The final leg of the Pro Farmer Crop Tour concluded Thursday, covering parts of Iowa and Minnesota. (See item below.) On tap today, the Crop Tour national corn and soybean crop estimates are due out this afternoon after the grain markets close. The key outside markets today see the U.S. dollar index lower. October Nymex WTI crude oil prices are near steady and trading around $86.75 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.7%.
Pro Farmer Crop Tour wraps up with Iowa and Minnesota samplings… The four-day Pro Farmer Crop Tour has wrapped up with an assessment of crops in Minnesota and Iowa. Scouts this week pulled thousands of samples in the first comprehensive, from-the-field look at corn and soybean crop potential across seven key growing states. The Tour concluded Thursday night, with Minnesota standing out amid largely lackluster corn yield and soybean pod count results across the Corn Belt. Minnesota’s corn yield came in at a strong 199.01 bushels per acre, down 1.9% from 202.86 in 2025 but 8.7% above the three-year average. USDA in August forecast Minnesota’s corn yield to fall 1.5% from last year’s record 201 bushels per acre to 197 bushels. Minnesota’s soybean crop potential was particularly impressive, with a pod count of 1,257.80 in a 3’X3' square, up 0.8% from last year and 15.4% above the three-year average. USDA forecast the state’s average soybean yield to fall 8.7% to 48 bushels an acre from last years 52.5 bushels. Indeed, the soybean figure stands out in that it was the only crop in any of the seven states sampled by the Crop Tour to show a year-over-year rise. Thursday’s results also saw eastern and central Iowa pull up estimates after lackluster readings in western Iowa on Wednesday. The state’s average corn yield came in at 193.98 bushels per acre, down 2.2% from last year and 1.4% above the three-year average. USDA expects Iowa’s corn yield to rise to a record 216 bushels this year, up 2.9% from 2025. Soybean pods in a 3’X3’ square averaged 1,362.93, down 1.6% from 2025’s Tour and up 5.2% from the three-year average. USDA expects Iowa’s soybean yield to fall to 62 bushels per acre, down 2.4%. Now that the results are all in, we will release our Pro Farmer national corn and soybean estimates at 1:30 p.m. CT today.
Unsettled weather over much of the U.S., hot in the south… The National Weather Service today said unsettled weather will continue into the weekend across much of the U.S. In the central U.S., there are chances for showers and thunderstorms, including a slight chance for some being severe, today. There is a marginal risk in place for excessive rainfall/heavy rainfall across portions of the central Plains. Across the southwest, monsoonal moisture will remain concentrated across the Four Corners and southern Rockies. Meanwhile, dangerous heat continues across the south-central U.S. and the Southwest through the weekend as the ridge continues to support above normal temperatures. Numerous daily record highs are expected, with daytime highs of 100-110 degrees across the southern Plains into the Southwest.
Sonora New World screwworm case may complicate U.S. border reopening… The detection of New World Screwworm in the Mexican state of Sonora on Wednesday threatens to complicate the planned Aug. 24 reopening of the U.S.-Mexico border to Mexican cattle imports, reports Angie Denton of Drovers. Sonora is just south of Arizona. The case was reported in a cow in the southern region of the state. USDA has previously emphasized that the reopening schedule is flexible and could be paused if authorities detect an increased risk on either side of the border.
“Trump risks China blowback with plan to choke Iran’s economy”… That’s the headline of an overnight Bloomberg report. U.S. Treasury Secretary Bessent vowed to ramp up pressure on Iran by targeting its economic partners, saying “You are either with us, or against us.” The U.S. is enforcing a naval blockade of Iran’s ports and has already subjected Iran to decades of tough sanctions, but it’s unclear what meaningful economic actions Washington has left. “China will provide the biggest test of Washington’s determination to follow through, as Beijing is the main buyer of Iranian oil and the U.S. has shown little appetite for challenging its economic links with Iran. Bessent’s stark language was meant to underscore Washington’s desire to punish countries that still do business with Iran, with Bessent saying he would unveil a plan at a Monday press conference. China will provide the biggest test of Washington’s determination to follow through. Beijing is the main buyer of Iranian oil. China President Xi Jinping visits the U.S. next month as the world’s two largest economies are navigating a tenuous trade truce. “Iranian oil supply to Chinese refiners squeezed by U.S. blockade,” read a Bloomberg headline overnight.
U.S. Treasury to expand bond buybacks… U.S. Treasury Secretary Scott Bessent said that he’s prepared to expand efforts to buy back costlier U.S. government debt and that the Trump administration will be unveiling a new fiscal initiative to address the highest borrowing costs in years. “We are announcing probably at the end of this week, beginning of next week, an increased focus on fiscal consolidation,” Bessent said in an interview Thursday on CNBC and as reported by Bloomberg. He told reporters separately that President Trump had tasked himself and Budget Director Russ Vought in that initiative. Bessent spoke after the Treasury Department said Wednesday that it would increase “by at least double” the size of buybacks for longer-dated securities. Thursday, he explained the move — which came as a surprise to market participants — was intended to ensure orderly trading in a “thin” summer market, and to get investors to focus on “fundamentals.” The impact in the bond market was short-lived, with U.S. 30-year bonds erasing gains Thursday. Ten-year note yields were also up on the day. Bessent played down Thursday’s market moves, saying “anything that happens within a 24-hour period is noise.” And he highlighted that the expanded buyback operations “could be more than the $4 billion” size currently planned to start next month. Asked how much more the Treasury is willing to do to get bond yields down, Bessent said, “We have a big toolkit, so we’ll see. And part of it is signaling here — to show that we believe that the yields don’t reflect the underlying fundamentals.” Wednesday’s announcement followed 30-year Treasury yields reaching their highest in almost two decades, and 10-year rates getting to levels unseen since before Trump took office.
Walmart earnings miss gets the attention of cattle traders… Disappointing earnings from Walmart sent shares of the largest U.S. retailer sliding more than 9% on Thursday, dragging down major stock indexes. The company reported the weakest sales growth in six years, amplifying concerns about the strength of the consumer – a particular concern for the cattle market where signs of resistance to higher beef prices have begun to emerge. A recent Bloomberg report noted beef sales volume fell 0.3% in the 13 weeks ending in mid-July while sales volumes for less expensive proteins rose 2%.
EPA moves winter gasoline sales up by two weeks. The Trump administration is authorizing an early shift to the sale of wintertime gasoline blends to blunt fuel costs and supply concerns. The Environmental Protection Agency is relaxing normal summertime gasoline requirements, allowing the sale of gasoline blended with 10% ethanol. The administration says the move will boost the domestic gasoline supply and provide Americans more price relief at the pump, with the impact on fuel prices depending on how quickly states respond to the change in federal policy, said a Bloomberg report. Starting Sept. 1, the waiver allows the sale of gasoline blended with 10% ethanol that evaporates faster than fuel typically sold during summer.
CME Group chief swipes at prediction markets… The head of CME Group Inc. told the chairman of the Commodity Futures Trading Commission on Thursday that the agency needed to do more to prevent manipulation on prediction markets. CME Chief Executive Officer Terry Duffy pointed to cases accusing individuals of placing bets on Polymarket and Kalshi with potentially insider information, and said “definitely people that are manipulating these contracts.” CFTC Chairman Michael Selig dismissed Duffy’s criticism, saying “that’s fake news,” and the exchange showed tensions between traditional market players and newer companies like Kalshi and Polymarket.
Malaysian palm oil futures extend gains… Malaysian palm oil futures on Friday extended their gains, trading around MYR 4,990 per MT and reaching their highest level since December 2024. The contract is also on track for its biggest weekly rise in 24 weeks, up nearly 6% so far, marking its third straight weekly advance. The rally was supported by strength in Dalian vegetable oils, while in top producer Indonesia, buyers have stepped up purchases ahead of the full implementation of the B50 biodiesel mandate in October. Meanwhile, the developing El Niño raised concerns of worsening dryness that could curb output in Indonesia and Malaysia. Still, upside was capped by ample supply, with Malaysian inventories climbing to a five-month high in July. Demand risks also weighed, as India’s refiners may favor cheaper soyoil, with record imports expected in August. Meanwhile, cargo surveyors estimated palm oil shipments during August 1–20 fell 5.5%–13.2% from the same period in July, underscoring weak export momentum.
Mixed trade in cattle futures Thursday… October live cattle on Thursday rose $0.775 to $218.00. September feeder cattle lost $0.20 to $328.925 and hit an eight-month low early on. Live cattle and feeder cattle futures saw early short covering and perceived bargain buying but bulls faded down the stretch. Prices remain trapped in downtrends on their daily bar charts. Gains in futures were also limited by lower cash cattle trade so far this week. USDA at midday Thursday reported more active cash cattle trading taking place at lower money, with steers averaging $225.28 and heifers averaging $225.15. The agency reported cash cattle trading last week averaged $228.52.
Bears keeping a firm grip in lean hog futures… October lean hog futures on Thursday fell $1.275 to $80.225 and closed at a two-month low close. The lean hog futures market saw more chart-based selling as prices are in a downtrend on the daily bar chart. Also, the cash hog market is still trending down and seasonals suggest higher slaughter levels in the coming weeks, which also favor the lean hog futures bears. The latest CME lean hog index down 82 cents to $93.96. Today’s projected CME index price is down another 24 cents at $93.72. The national direct five-day rolling average cash hog price quote for Thursday was $92.90.