Good morning!
Grain futures prices narrowly mixed overnight… As of 6:00 a.m. CST, July corn was down 1 1/2 cents. July soybeans were steady. July soybean meal was down $0.10 and July bean oil was 42 points higher. July SRW wheat was up 1/4 cent and July HRW was 2 cents higher. The grain markets are pausing on this last day of the trading week. It looks like the bulls will limp into the weekend to lick their wounds from this week’s selling pressure that was mainly due to the big drop in crude oil prices. The key outside markets today see the U.S. dollar index modestly lower, while Nymex WTI crude oil prices are near steady and trading around $95.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.37%.
Latest on U.S.-Iran war…
-- U.S., Iran clash near Hormuz as response on proposed peace deal awaited
-- Iran turns to China rail link to try to bypass U.S. blockade
The U.S. and Iran traded fire near the Strait of Hormuz, with U.S. forces targeting missile and drone launch sites and other military assets in Iran. The clashes risk undermining talks over a U.S.-proposed deal to end the war, with Iran expected to send a response via Pakistan in the next two days. President Trump threatened more intense strikes if Iran refuses his terms, saying the U.S. will “knock them out a lot harder” if they don’t sign a deal.
Scattered showers, thunderstorms in eastern 2/3 of U.S. today and this weekend … The National Weather Service today said rain, showers and thunderstorms will spread across the central/southern Plains, middle Mississippi Valley, and the Ohio Valley through Friday night. There is a slight risk (level 2/5) of severe thunderstorms over parts of the southern Plains through Saturday morning. Meanwhile, a second front moving southward out of central Canada will move into the central Plains and the middle Mississippi Valley and eastward into the Northeast by Sunday. The front will produce rain from the northeast to the southern Plains. Showers and severe thunderstorms will develop over parts of the southern Plains from Saturday into Sunday morning. Moreover, the front will produce rain from the northeast to the Southern Plains.
Monthly U.S. jobs report on deck… The U.S. data point of the week, if not the month, occurs this morning with the April employment situation report from the Labor Department. The U.S. unemployment rate is expected to come in at 4.3%, which is the same as in the March report. The key non-farm payrolls number is seen up 55,000 workers in April versus a rise of 178,000 in the March report, according to a Dow Jones Newswires survey. While a payrolls number that is in line with market expectations would point to a moderation in hiring, it would also mark the first back-to-back monthly increase in employment in nearly a year, reinforcing signs that the U.S. labor market is gradually cooling while remaining broadly resilient. Average hourly earnings likely rose 0.3%, month-on-month slightly above March’s 0.2% increase. On an annual basis, wage growth is projected to accelerate to 3.8% from 3.5%.
Global food prices rise to three-year high… Global food prices climbed to their highest levels in more than three years as the U.S.-Iran war disrupted supply chains, raising the prospect of larger bills for shoppers. The United Nations’ index of food-commodity prices gained 1.6% in April from the previous month, led higher by vegetable oils, meat and cereals, according to a Friday report. That’s 2.5% higher than a year ago. Elevated oil prices have also boosted demand for biofuels, with the U.N.’s vegetable oils index climbing 5.9% from March to hit its highest since July 2022. The FAO index monitors raw commodity costs rather than retail prices, meaning there will still be a lag before the farmgate increase reaches consumers. Still, the gains from March’s level is the first sign that food inflation is likely to pick up. The increase in the gauge — which tracks grains, sugar, meat, dairy and vegetable oil costs — marks the third consecutive month of gains, after rising for the first time in five months in February. The meat index climbed 1.2% to a record high, while the cereal price index rose by 0.8% on weather concerns and expectations of reduced wheat plantings in 2026, as farmers consider sowing less fertilizer‑intensive crops. Sugar prices, meanwhile, dropped 4.7%, following a sharp rise in March.
El Nino causing heat wave in Asia, food inflation upticks… Asia is grappling with a new threat to inflation on top of an oil shock as a looming El Niño brings soaring temperatures and dry weather to countries from India to New Zealand, driving up food costs. “Inflation accelerated to multiyear highs across much of Asia, latest figures showed, led by higher transport, logistics and utility costs. The biggest spikes were in the Philippines and Pakistan, where inflation soared above 7% and to 11%, respectively,” said a Bloomberg report. Those pressures could intensify further as El Niño is forecast to bring drier conditions and hotter weather later this year. “Those threats could be compounded if governments impose export restrictions to protect domestic food supplies, similar to 2022 and 2023 in the wake of Russia’s full-scale invasion of Ukraine and extreme weather in some countries. “Upward pressure on food prices will likely only be more visible from the second-half of the year as a recent surge in fertilizer costs driven by the Middle East conflict will take time to feed into food prices, economists warn,” said the report.
Federal court disavows U.S.’s 10% global tariffs… President Trump’s 10% global tariffs were declared unlawful by a federal trade court in a fresh blow to the administration’s economic agenda, just months after the U.S. Supreme Court vacated earlier levies he’d imposed. A divided three-judge panel at the U.S. Court of International Trade in Manhattan on Thursday granted a request by a group of small businesses and two dozen mostly Democrat-led states to invalidate the tariffs. Trump imposed the 10% duties in February under Section 122 of the Trade Act of 1974, which had never previously been invoked. Asked about the ruling on Thursday evening, Trump told reporters that “we had two radical left judges who voted against it. So nothing surprises me with the courts. Nothing surprises me. So we always do it a different way. We get one ruling and we do it a different way,” he said and as reported by Bloomberg.
“World’s most important relationship” to be tested next week… When President Trump’s plane touches down in Beijing next week, he’ll become the first sitting U.S. president to visit China in nearly a decade. “His two-day summit with Xi Jinping extends a personal relationship that’s weathered a tariff war, pandemic and historic energy crisis. The two men — septuagenarians with June birthdays just one day apart — have met at least six times over the past decade,” said a Bloomberg report headlined as the “World’s most important relationship.” Even as both leaders leaned into personal diplomacy, tensions over trade, Taiwan and technology intensified — setting the stage for a rising rivalry that’s reverberated across international markets and geopolitics. “Despite the barbs traded between the governments of Trump and Xi, their personal rapport remains intact — a contrast with Joe Biden, who never visited China as president, becoming the first leader since Jimmy Carter to leave office without doing so.
Malaysian palm oil futures continue to slump… Malaysian palm oil futures traded below MYR 4,550 per MT Friday, extending recent losses as weakness in Dalian edible oils weighed on sentiment. The market is heading for a second straight weekly decline, down about 0.8% so far, reflecting demand concerns. April imports by top consumer India plunged 27% month-over-month to a one-year low, adding to bearish sentiment. Meanwhile, cargo surveyors estimated Malaysia’s exports during April 1–25 fell 15.7%–16.8% from March, linked to softer post-festive buying. Still, losses were partly cushioned by a weaker ringgit and firmer Chicago soyoil. Crude oil prices also climbed on renewed U.S.–Iran tensions, boosting expectations for stronger biofuel demand. Domestically, Malaysia will implement its B15 biodiesel mandate from June 1, raising the blend from the current B10 to curb fuel imports and support palm oil consumption. Market participants now await monthly data from the Malaysian Palm Oil Board due Monday for clearer supply-demand signals.
Cattle futures see more profit taking… June live cattle on Thursday fell $3.425 to $250.05 and hit a two-week low. May feeder cattle lost $6.075 to $366.325. The live cattle futures markets saw more profit-taking pressure as trading has turned choppier at higher levels. Some modest risk aversion in the general marketplace Thursday did keep the cattle market bulls on the sidelines. USDA at midday Thursday reported light cash cattle trading taking place at an average price of $255.76 for steers and $255.49 for heifers. USDA Monday reported last week’s average cash cattle trading price at $255.02. That’s $8.84 above the prior week’s average cash cattle price.
Lean hog futures sink to 4.5-month low… June lean hog futures fell $0.325 to $99.375 and hit a 4.5-month low. The hog futures market saw some more mild technical selling pressure. The near-term technical posture for June hogs remains bearish. Prices are in a downtrend on the daily bar chart. The latest CME lean hog index is up 9 cents at $91.19. Today’s projected cash index price is down 17 cents at $91.02. The national direct five-day rolling average cash hog price quote Thursday was $94.82.