Good morning!
Surging wheat leads grain futures higher overnight… At 6:00 a.m. CDT, December corn was up 6 cents. November soybeans were up 6 1/2 cents. September soybean meal was up $1.10 and September bean oil was 53 points higher. December SRW wheat was up 22 3/4 cents and HRW wheat was 25 1/2 cents higher, with both markets scoring seven-week highs. The wheat futures markets led overnight gains amid scorching temperatures in the U.S. Northern Plains, a persistent heat wave in western Europe and the Ukraine-Russia war that has both sides presently focusing on disrupting shipping in the Black Sea region. The key outside markets today see the U.S. dollar index modestly up. August Nymex WTI crude oil prices are higher and trading around $80.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.6%.
Total New World screwworm cases detected in U.S. rises to 37… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 37 total New World screwworm detected cases in the U.S. There are 17 active cases, all still in Texas.
Hot temperatures persist over northern Plains, Great Lakes… The National Weather Service today said an unusually strong upper-level high has become nearly stationary over the northern-tier states while building southeast toward the East Coast. This weather pattern will prolong the heat and humidity across the Northern Plains to the Great Lakes, where high temperatures will remain in the 90s to lower 100s for the next few days.Extreme heat warnings or advisories remain in effect across portions of those regions. As the upper high extends across the northern tier, a slow-moving weather regime has already set up across the southern-tier states to produce repeated rounds of showers and thunderstorms. Near the western end of that front, a significant heavy rainfall event is forecast to linger across the Texas hill country over the next three days.
U.S. inflicting heavy strikes against Iran… President Trump said he would intensify the U.S. bombardment against Iran until it stops attacking ships in the Strait of Hormuz and agrees to open the waterway. American forces hit Iranian military targets overnight for a fourth straight day, again prompting counterstrikes from Tehran on U.S. bases in Gulf Arab states, including Kuwait and Bahrain. “A U.S.-Iran interim peace deal signed around a month ago has all but collapsed over the past week as the two sides feud over control of the vital strait, through which the likes of Saudi Arabia, Qatar and the United Arab Emirates send most of their energy exports,” said a Bloomberg report. Trump pledged to bomb again on Wednesday night and continue until Iran relents. “We’re going to hit them very hard tomorrow night,” he told Fox News on Tuesday. “We’re going to hit them very hard the night after. And then next week it gets really bad for them because next week comes the power plants. We’re going to knock out all of their bridges unless they get to the table and negotiate.” Trump backed away from his plan for a 20% charge on cargo shipments through the Strait of Hormuz, but resumed a blockade on Iranian shipping.
Ukraine intensifies attacks on Russian ships in Black Sea… Ukrainian forces hit multiple Russian vessels in the Black Sea Wednesday as Kyiv expands the scope of its naval attacks against Moscow. “The first round of the naval battle is over” after Ukraine hit more than 100 Russia-linked ships in the Sea of Azov in recent days, drone unit commander Robert Brovdi said in a statement on Telegram and as reported by Bloomberg. “Now, the Black Sea.” On Wednesday, Ukraine attacked 17 oil tankers, two gas carriers and one tug boat there, Brovdi said, adding that he’ll provide an official report and video evidence later. Following attacks on Russian vessels in the Sea of Azov last week, Moscow suspended shipping through the Don-Azov Channel, which links the sea with the Don River, Reuters reported last Friday. It also closed the Kerch Strait, which connects the Sea of Azov and the Black Sea, according to the news service. Meanwhile, Russia has also been attacking Ukraine’s Black Sea assets. Earlier Wednesday, the Defense Ministry in Moscow said it struck the ports of Odesa, Chornomorsk and Dnipro-Bugsky overnight, damaging four vessels delivering cargo to Ukraine’s armed forces.
U.S. producer price index on deck… U.S. producer prices are expected to have remained unchanged in June, marking the weakest monthly reading in 10 months, after increasing by 1.1% in each of the previous two months. The moderation was likely driven by lower energy prices following the ceasefire agreement between the U.S. and Iran. Excluding the more volatile food and energy components, core producer prices are forecast to rise by 0.4% in June, matching May’s increase. On an annual basis, today’s PPI report is expected to show headline producer inflation easing to 6.2% from 6.5%, marking its first slowdown in eight months after reaching its highest level since November 2022. By contrast, annual core producer inflation is projected to accelerate to 5.2% from 4.9%, its highest reading since December 2022. TradingEconomics.com
Warsh says U.S. inflation fight not over… Federal Reserve Chairman Kevin Warsh on Tuesday said slowing inflation in June’s consumer price index report doesn’t mean the Fed’s mission is accomplished and hinted at how the U.S. central bank may eventually have to respond. In testimony to congressional members, Warsh made it clear the options to curb inflation include interest rates, saying, “We have the tools to do it” and that he will ask colleagues to discuss the extent and timing of deploying those tools. Economists said Warsh’s remarks were the closest he has come to saying out loud that U.S. monetary policy may need to be tightened but did not project a near-term interest rate hike. Warsh testifies in front of the Senate today.
China’s economic growth unexpectedly slows… China’s economy expanded 4.3%, year-on-year, in the second quarter, slowing from 5.0% in the first quarter and missing market expectations of 4.5%. It marked the weakest annual growth since Q4 2022, as soft domestic demand, subdued private investment and the prolonged property downturn outweighed continued support from resilient AI-related exports. The latest reading also fell below the lower end of Beijing’s 4.5%–5.0% annual growth target, underscoring the uneven recovery and reinforcing expectations of further monetary policy support. The National Bureau of Statistics (NBS) said in a statement that external uncertainties remained elevated, while the economy continued to face an imbalance between robust supply and weak demand. For the first half of 2026, GDP grew 4.7%.
Malaysian palm oil futures prices down a bit… Malaysian palm oil futures edged lower Wednesday after recent gains, hovering below MYR 4,600 per MT amid a firmer ringgit and weaker demand prospects from major buyer China as the economy grew at its slowest pace in 3-1/2 years. In India, the top palm oil importer, purchases fell to a 14-month low in June as demand fell and a narrowing price discount to rival oils reduced buying interest. Meanwhile, the EU confirmed imports of palm oil derivatives will be subject to its anti-deforestation rules from December 2027. Still, losses were capped by strength in rival edible oils on the Dalian and Chicago markets, along with stronger crude oil prices. Meanwhile, the B50 biodiesel mandate in Indonesia, the largest supplier, is expected to spur domestic palm oil consumption. Traders now await export data for the first half of July, after shipments rose 1.6%–5.1% in the July 1–10 period compared with the same period in June.
Live cattle futures hit 3.5-month low… August live cattle on Tuesday fell $3.30 to $231.425 and hit a 3.5-month low. August feeder cattle lost $5.55 to $348.80 and hit a five-week low. The cattle futures markets saw a resumption of chart-based selling pressure amid price downtrends firmly in place on the daily bar charts. Lower cash cattle price being fetched in very light trading early this week was also negative for futures. In the Northern Plains, excessive heat has been severely stressing livestock, said World Weather Inc. The heat in the Plains is expected to persist into later this week. USDA at midday Tuesday reported very light cash cattle trading taking place at $244.49. The agency on Monday reported last week’s cash cattle trading averaged $248.01, down $7.11. from the week prior’s average $255.12.
Lean hog futures pause… August lean hog futures on Tuesday rose $0.35 to $98.45. The hog futures market paused but the bulls are keeping alive a price uptrend on the daily bar chart and are keeping their near-term chart advantage. BLT season is right around the corner and that will limit selling interest in futures and support wholesale pork prices in the near term. The latest CME lean hog index is up 42 cents to $93.11. Today’s projected CME index price is up 76 cents at $93.87. The national direct five-day rolling average cash hog price quote for Tuesday was $96.91.