Good morning!
Grain futures prices weaker overnight… As of 6:00 a.m. CST, July corn was down 1 3/4 cents but hit a nearly two-month high overnight. July soybeans were 4 cents lower. July soybean meal was down $0.80 and July bean oil was 25 points higher and poked to another contract high. July SRW wheat was down 3 1/2 cents and July HRW was off 9 1/4 cents. It’s a “Turnaround Tuesday” phenomenon in the grain markets, following Monday’s gains. Some routine profit taking from the shorter-term speculators and some chart consolidation were featured overnight. All the grain markets are enjoying price uptrends in place on the daily bar charts, which suggests the path of least resistance for prices will remain sideways to higher in the near term. The key outside markets today see the U.S. dollar index up a bit, while Nymex WTI crude oil prices are lower and trading around $104.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.43%.
Latest on the war in the Middle East…
--U.S.-Iran ceasefire holds after Hormuz clashes and UAE strikes
--Ships cluster farther from Hormuz Strait as Iran widens grip
--Iraq slashes oil prices for buyers willing to transit Hormuz
--Maersk vessel exits Persian Gulf under U.S. military escort
The fragile U.S.-Iran ceasefire held Tuesday morning after a day of clashes involving shipping in the Strait of Hormuz and missile attacks against the United Arab Emirates. The violence erupted after President Trump announced “Project Freedom,” which he described as a humanitarian effort to guide neutral ships stranded in the Gulf through Hormuz. Iran warned all ships against trying to get through Hormuz without its permission and hit a South Korean bulk carrier and attacked an empty tanker belonging to the UAE’s state oil firm.
Cold snap, showers for Midwest, Plains, Southeast… The National Weather Service today said a strong cold front will continue moving through the central Plains, reaching the southern Plains and Southeast by the middle of the week. Widespread showers and thunderstorms are expected throughout much of the country. Beginning this morning, showers and thunderstorms are expected throughout portions of the central Plains, Mississippi and Ohio Valleys, and the Northeast. Some areas will see the potential for severe weather, including the chance for a tornado. Temperatures will remain significantly below average across the northern and eastern portions of the country following the cold front’s passage.
U.S. winter wheat crop continues to deteriorate… USDA released its weekly crop progress and condition report Monday afternoon, showing U.S. winter wheat in 37% very poor to poor condition, 32% fair and 31% good to excellent conditions. The good to excellent category was up 1% from last week and came in 1% above the average analyst estimate according to a poll conducted by Bloomberg. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 0.56 points to 263.90. Declines in Kansas and Oklahoma were partially offset by slight gains elsewhere in the Plains. The SRW crop notched a mild increase of 3.92 points to 363.59 following spotty precipitation and cooling temperatures offering some relief across the Midwest last week. Even with the uptick, SRW conditions remain below year-ago levels for this time. See: Dismal conditions signal 8 million winter wheat acres may be abandoned
USDA weekly U.S. corn, soybean crop progress updates… USDA Monday afternoon reported U.S. corn was 38% planted as of Sunday compared to 38% last year and 34% for the five-year average. This represents an increase of 13% for the week. Corn was 13% emerged compared to 10% last year and 9% average. U.S. soybeans were 33% planted as of Sunday compared to 28% last year and 23% for the five-year average. This represents an increase of 10% for the week. Soybeans were 13% emerged compared to 6% last year and 5% average.
U.S. corn acres may be down as much as 2 million, beans up as much as 2 million: Pro Farmer consultant… Our crop consultant Michael Cordonnier said in his weekly corn and soybean report that this year’s U.S. corn acreage could end up 1 million to 2 million acres less than the 95.33 million acres estimated in the USDA Perspective Plantings Report. His 2026 U.S. corn yield is estimated at between 180 to 182 bu/ac, which is below last year due to a potential reduction in fertilizer usage. Cordonnier said 2026 U.S. soybean acreage could end up 1 million to 2 million acres more than the 84.70 million acres USDA estimated in the Perspective Plantings report. The 2026 U.S. soybean yield is estimated by Cordonnier at 52.0 bu/ac.
Trump looking forward to summit with Xi… President Trump on Monday said he’s looking forward to meeting his Chinese counterpart Xi Jinping, signaling his plans for the high-stakes summit are still on despite fresh tensions between the world’s largest economies. “I’m going to go see President Xi in two weeks. I look forward to that,” Trump said Monday during a White House event and as reported by Bloomberg. “Actually, it’ll be a very important trip.” The two leaders are slated to meet on May 14-15 in Beijing as they seek to navigate challenges on trade and other fronts, including self-ruled Taiwan and the war in Iran. U.S. and Chinese officials have been preparing for the summit for months, including discussions over creating a new bilateral mechanism to help manage economic ties. China still hasn’t confirmed dates of the summit, as is customary in Beijing, where details of Xi’s schedule are closely held until days before an event.
Australia’s central banks raises interest rates… Australia’s central bank, the Reserve Bank of Australia, raised its key interest rate for a third consecutive meeting to 4.35% from 4.1% by a vote of eight to one. RBA Governor Michele Bullock signaled policymakers would now pause to assess their next steps and are watching to see if inflation expectations will stay anchored. The rate hikes aim to tame stubbornly strong inflation, with the RBA’s tightening further separating Australia from international peers that have remained on hold citing war-driven uncertainty.
Euro zone facing “stagflationary shock,” says EU economy commissioner… European Union Economy Commissioner Valdis Dombrovskis warned of the stagflationary effect that the U.S.-Iran war is creating for the bloc, saying higher energy prices are pushing the EU economy onto a path of weaker growth and higher inflation. “Europe is facing is a stagflationary shock,” he said and as reported by Bloomberg. EU officials, including Eurogroup chief Kyriakos Pierrakakis and EU Climate Commissioner Wopke Hoekstra, are warning of a stagflationary tendency, with Hoekstra saying the region needs to “fasten our seatbelts and reckon with the possibility that this will continue and potentially will get much worse.” The European Commission is set to publish new economic forecasts this month, with Dombrovskis saying the overall economic impact will depend on how the conflict evolves, particularly its implications on energy supplies and infrastructure.
Malaysian palm oil futures at three-week high… Malaysian palm oil futures extended gains Tuesday, hovering above MYR 4,650 per MT and notching a three-week peak. The upside was supported by a weaker ringgit and optimism over Malaysia’s biodiesel policy. Kuala Lumpur is reportedly set to roll out B15 biodiesel, from the current B10, starting June 1, with 19 plants expected to begin production, a move aimed at reducing reliance on fossil fuel imports amid soaring oil prices. However, gains were capped by weaker demand signals. Imports in key buyer India fell 27% mom to a one-year low in April, as higher prices narrowed palm oil’s discount to rival oils and discouraged purchases. Export trends also softened, with cargo surveyors reporting shipments for April 1–25 dropped 15.7%–16.8% from March, reflecting typical post-festive weakness. Additional pressure came from rising supply, as top producer Indonesia exported 5.85 million MT of crude and refined palm oil in the January–March period, up 9.3% year-on-year, according to official data.
Cattle futures see more profit-taking pressure… June live cattle on Monday fell $1.25 to $251.75. August feeder cattle lost $4.80 to $366.60. The cattle futures markets saw what is so far routine profit-taking pressure from recent solid gains. Supply and demand fundamentals are still bullish, as are the technical postures for both markets. Last week’s strong gains in the cash cattle market will likely limit any more selling pressure in futures. USDA at midday Monday reported the average cash cattle trading price at $255.02. That’s $8.84 above the prior week’s average cash cattle price. Feeder cattle bulls are a bit worried that a bearish double-top reversal pattern could be forming on the daily bar chart.
Lean hog futures technical posture deteriorating… Price action: June lean hog futures on Monday fell $1.525 to $99.75 and hit a 4.5-month low. The hog futures market saw more technical selling pressure as the near-term chart posture for June hogs has deteriorated. Prices are in a downtrend on the daily bar chart. Selling in the cattle futures markets Monday also limited buying interest in hog futures. The latest CME lean hog index is down 11 cents at $91.30. Today’s projected cash index price is down 27 cents at $91.03. The national direct five-day rolling average cash hog price quote Monday was $92.74.