Good morning!
Grain futures mixed-weaker overnight… As of 6:00 a.m. CST, May corn was down 3 1/4 cents. May soybeans were 1/2 cent up. May soybean meal was down $0.80 and May bean oil was 21 points higher. May SRW wheat was down 2 1/2 cents and May HRW wheat was 5 1/2 cents down. The winter wheat market bulls in the overnight trade got no traction after Monday afternoon’s initial USDA crop progress report showed a much-lower-than-expected U.S. winter wheat crop good-excellent condition rating. (See item below.) The key outside markets see Nymex WTI crude oil higher and trading around $114.00 a barrel. The U.S. dollar index is slightly up early today. The yield on the benchmark 10-year U.S. Treasury note is presently 4.34 percent.
Latest on the war in the Middle East…
--Trump sets deadline deal, including reopening Strait of Hormuz, by Tuesday 8 p.m. ET
--Iran keeps up attacks before U.S. deadline, dimming peace chances
--Iran rejects U.S. proposed ceasefire terms
--Iran’s demands include a permanent end to fighting and the lifting of sanctions
--Israel warns Iranians to avoid country’s railway network until 9 p.m. local time Tuesday
--Saudi Arabia intercepted ballistic missiles fired overnight
Rain, snow across Midwest, Plains, upper Great Lakes … The National Weather Service today said a cold front over the lower Great Lakes and Northeast will continue to bring a wintry mix with chances of moderate to heavy snow and gusty winds along the front today. There are chances for showers and thunderstorms stretching across the central Plains into the upper Great Lakes. There is a marginal risk for severe thunderstorms across portions of Kansas and Nebraska for Wednesday. There may be an occasional wintry mix farther north, across portions of the Northern Plains into upper Midwest through Wednesday. A cold front will advance eastward toward the Ohio Valley on Thursday, bringing chances for showers and thunderstorms along the front. Below-average temperatures will continue across the Northern Plains into the Ohio Valley and the Northeast today before near normal temperatures start to return on Wednesday.
USDA weekly crop progress report: winter wheat conditions worse than expected… USDA on Monday afternoon resumed its weekly crop progress reports. Analysts had estimated U.S. winter wheat conditions would come in at 42% good to excellent, but USDA reported an actual value of 35% for that category. That is down 13% from year-ago levels due to the ongoing drought impacting the Plains. It’s the lowest initial spring rating of the winter wheat crop since 2022. Colorado and Montana noted the sharpest declines in ratings but was partially offset by increases in Idaho and Washington. National conditions for corn, soybeans and other crops will not be provided until the crop has exceeded the 50% threshold of the emergence stage, typically mid-May for corn and early June for soybeans. The inaugural crop progress report for the 2026 season showed U.S. corn planting at 3% complete, with spring wheat at 2% planted and cotton at 5% planted—all in line with analysts polled by Reuters. Compared to last year’s pace, corn and cotton are 1% ahead, and spring wheat is 1% behind. The complete story can be found at ProFarmer.com.
Brazil to expand tax cuts on fuels, including biofuels… Brazil’s government will expand government tax cuts and subsidies on fuels as it attempts to shield consumers from rising prices due to the war in Iran, broadening measures it had previously unveiled amid the conflict, Bloomberg reports. “President Luiz Inacio Lula da Silva’s administration will temporarily eliminate so-called PIS/Cofins taxes on biodiesel and aviation fuel, while also subsidizing local diesel production and the import of cooking gas, Finance Minister Dario Durigan told reporters Monday,” said the report. The plan includes a subsidy of 1.20 reais per liter for diesel imports, the cost of which will be shared by the federal government and states. It also creates a subsidy of 0.8 reais per liter for diesel produced domestically.
U.S. oil-shale drillers to increase output… U.S. shale drillers are expected to follow President Trump’s call for higher U.S. crude oil production. “The 68% surge in crude prices since the U.S. and Israel commenced attacks on Iran roughly five weeks ago is incentive enough to compel American oil executives to ramp up output, according to observers as diverse as Citigroup Inc., Enverus Inc. and government analysts at the Energy Information Administration,” Bloomberg said in a report. Shale explorers require oil prices somewhere between $62 and $70 a barrel to turn a profit on new wells, according to the Federal Reserve Bank of Dallas. “Elevated prices are certainly going to increase production in the United States,” Mike Sommers, chief executive officer of industry lobby group the American Petroleum Institute, said during a Bloomberg Television interview. “You are going to see that over the course of the next few months.”
Monsoon rains in India seen less than normal, impacting crops: forecaster… Monsoon rains in India are likely to be below the long-term average this year, as an expected El Niño weather pattern during the four-month season could reduce precipitation, according to a private forecaster and as reported by Bloomberg. Rainfall during the June-September period is forecast to be 94% of normal, Skymet Weather Services Pvt. Said today. The prediction has a margin of error of 5%, it said. “The monsoon is vital for Indian agriculture, helping irrigate fields and replenish reservoirs for winter crops. It supports millions of livelihoods and influences food prices. Weak rainfall in one of the world’s major producers of rice, wheat, sugar and cotton can lead to water shortages, lower yields and higher imports of staples such as edible oils,” said Bloomberg. “Deficient rainfall may push farmers to use more diesel for irrigation, raising fuel demand at a time when the Iran war is already driving up global energy costs,” said the report.
China ramps up gold buying amid Middle East war… China’s central bank bought the most gold in more than a year in March, “demonstrating that a key pillar of support for the precious metal remains intact as prices come under pressure amid the Iran war,” said Bloomberg in a report. Bullion held by the People’s Bank of China rose by 160,000 troy ounces last month, or about 5 tons, according to data on from the World Gold Council today. The central bank, among the world’s largest buyers, has added to holdings for 17 months straight. Gold prices sank 12% in March — the worst monthly performance since 2008 — as the conflict that ripped across the Middle East boosted the U.S. dollar and spurred bets that the Federal Reserve wouldn’t be able to cut interest rates if inflation picked up. “The PBOC’s latest purchases may help to bolster investor confidence in gold, at a time when some other central banks have turned to sales. In March, Turkey’s central bank sold and swapped about 60 tons to defend the lira, said the report. In the first two months of the year, central banks bought a net 25 tons, according to an estimate from the World Gold Council last week. The National Bank of Poland picked up 20 tons in February, driving much of the buying.
Malaysian palm oil futures prices bounce… Malaysian palm oil futures hovered near MYR 4,850 per MT on Tuesday, rebounding from prior weakness as a weaker ringgit and firmer edible oil prices in Dalian and Chicago lent support. Crude oil’s rally, fueled by U.S. President Trump’s escalated rhetoric against Iran, further lifted sentiment for biofuel-linked commodities. On the supply side, Indonesia, the top producer, posted double-digit export growth in February ahead of its July B50 biodiesel mandate. Meanwhile, Thailand announced tighter crude palm oil export controls and regulated bottled oil prices from April 7. Cargo surveyors noted Malaysian shipments surged 44%–57% mom in March. Separately, Reuters forecast the steepest inventory draw in three years, cutting stockpiles to the lowest since July. Gains, however, were capped by caution ahead of official monthly data and China’s inflation release. Demand concerns also lingered after March imports fell 19% in top buyer India to a three-month low as high prices curbed buying.
Live cattle futures rally on soaring cash cattle prices… June live cattle on Monday rose $0.70 to $247.025 and hit a contract high. May feeders Monday fell $0.275 to $370.35 and hit a 5.5-month high early on. The live cattle futures market continued to rally Monday amid sharply higher cash cattle prices, while feeder cattle traders took a pause. Both markets are supported by bullish charts that are inviting speculators to the long sides. Somewhat improved trader/investor risk appetite in the general marketplace early this week supported the cattle futures bulls. USDA at midday Monday reported cash cattle trading last week averaged $244.96. That’s $9.27 higher than the week-prior’s average of $235.69.
Lean hog futures prices pop on short covering, technical buying… June lean hog futures on Monday gained $3.225 to $107.70 and hit a three-week high. Short covering and some technical buying were featured as the chart posture for lean hog futures has improved. The hog futures market was also boosted by the rally to new for-the-move highs in the cattle futures markets and somewhat improved trader/investor risk appetite in the general marketplace. Seasonal factors also favor the lean hog futures bulls at present. The latest CME lean hog index is down 40 cents at $90.01. Today’s projected cash index price is down another 8 cents at $89.93. The national direct five-day rolling average cash hog price quote Monday was $69.50.