Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, May corn was up 2 1/2 cents. May soybeans were 3 1/2 cents up. May soybean meal was up $1.00 and May bean oil was 47 points higher. May SRW wheat was up 7 1/4 cents and May HRW was 8 cents higher. On tap today is the weekly USDA export sales report followed by the monthly USDA supply and demand report. (See item below.) The key outside markets see Nymex WTI crude higher and trading around $99.00 a barrel. The U.S. dollar index is slightly down. The yield on the benchmark 10-year U.S. Treasury note is presently 4.29 percent.
Latest on the war in the Middle East…
--The White House says U.S. will hold direct talks with Iran, but mistrust runs high on both sides
-- VP Vance to lead U.S. negotiations with Iran in Pakistan Saturday
--There were no reports of strikes from Arab Gulf nations for much of Wednesday
--Trump said U.S. military to remain in place around Iran until ceasefire is reached
--Lebanon remains stumbling block to negotiations after a barrage of attacks from Israel
--The Strait of Hormuz remained largely closed as of today
--Some tankers in Persian Gulf are sailing east to be nearer to the Strait of Hormuz
--U.S. asks allies for quick plans to secure Hormuz after ceasefire
--Crude oil rises after biggest drop since 2020 as Hormuz stays blocked
--U.S., European stocks back in the red as ceasefire optimism fades
Rain across much of the Plains, Midwest … The National Weather Service today said active weather continues across much of the U.S. late this week. Much of the precipitation will be showers and thunderstorms. Parts of the Northern Plains and upper Great Lakes may experience some mixed precipitation as the moisture interacts with a colder airmass. With an increase in warm Gulf moisture along a front over the central Plains and unstable airmass, there is a slight risk for severe thunderstorms from northeast Kansas into southeast Nebraska and northwest Missouri for today, with a chance for strong wind gusts and large hail. Chances for thunderstorms and showers build over the Southwest and southern Plains/Rockies as the frontal system slowly moves southward by Friday. With the warm moisture and instability, chances for downpours increase which may lead to localized flooding over parts of southern Plains on Saturday. Temperatures will continue to trend 5-12 degrees above normal for much of U.S. through Friday, with the exception of the Northern Plains and East Coast, where 10-15 degrees below normal temperatures persist through today.
Grain traders await monthly USDA supply and demand report near midday… The agency is expected to show only small changes in U.S. corn, soybean and wheat stockpiles from the March report. However, U.S. corn stocks in March are expected to be significantly higher than in March of 2025. U.S. wheat and soybean stocks are seen modestly above levels seen at the same time last year. Meantime, traders expect the agency to estimate Brazil and Argentina corn and soybean production levels to be very close to what it estimated in the March report. U.S. cotton production, ending stocks and export numbers are all expected by USDA to be very little changed from its March report.
FOMC minutes: Fed officials worry about war stoking inflation… A growing number of Federal Reserve officials are worried the Middle East war could further stoke inflation and believe the U.S. central bank may have to consider raising interest rates, according to the minutes of the mid-March Federal Open Market Committee meeting, which were released Wednesday afternoon. Most Fed officials were worried a protracted war could hurt the labor market and warrant lower interest rates, while many policymakers highlighted the risk to inflation that might ultimately warrant rate increases. Fed officials who expressed more worry about inflation urged their colleagues to consider adding language to their post-meeting statement that raised the scenario of hiking rates under certain conditions.
Key U.S. inflation reports late this week… This morning’s personal income and outlays report is likely to show the key PCE price index rising by 0.4% month over month in February 2026, slightly above January’s 0.3% increase. The core PCE index, which excludes food and energy, is also projected to grow by 0.4%, matching the previous month’s pace. On a year-over-year basis, headline PCE inflation is likely to remain steady at 2.8%, while the core rate is expected to ease slightly to 3% from 3.1%. Overall, the report is anticipated to indicate that price pressures remained elevated, broadly in line with recent months and still above the Federal Reserve’s 2% target in February, prior to the onset of the war with Iran. The PCE price index is the Federal Reserve’s preferred measure of inflation. The U.S. consumer price index report for March comes out on Friday morning: TradingEconomics.com
Malaysian palm oil futures prices rebound… Malaysian palm oil futures hovered above MYR 4,600 per MT Thursday, recovering from recent losses that had pushed prices to a near two-week low. The upturn was supported by bargain hunting, a weaker ringgit, and firmer soyoil prices on the Chicago market. Gains were further boosted by a surge in crude oil prices, driven by doubts over the durability of the two-week ceasefire between the U.S. and Iran, which lifted broader commodity sentiment. Meanwhile, Reuters projected the steepest inventory drop in three years for March. In Indonesia, the world’s largest producer, a ministerial decree was issued outlining the timeline for the country’s biofuel mandate. However, the upside was capped by weakness in edible oils on the Dalian exchange and persistent demand concerns in top buyer India, where palm oil imports fell 19% in March. Caution also grew ahead of key data releases, including the Malaysian Palm Oil Board’s monthly report and inflation figures from major consumer China, both due Friday.
Cattle futures see chart consolidation… June live cattle on Wednesday rose $0.125 to $245.925. May feeder cattle gained $1.375 to $368.00. The cattle futures markets saw some chart consolidation after nearby live cattle futures prices this week hit a record high. Much better risk appetite in the general marketplace at mid-week also favored the cattle market bulls. Cash cattle and beef market fundamentals remain solid. USDA at midday Wednesday reported still no cash cattle trading yet this week. The agency on 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 sell off on profit taking, weak long liquidation… June lean hog futures on Wednesday fell $2.40 to $104.65. The hog futures market gave back most of Monday’s gains at mid-week, on profit-taking pressure and weak long liquidation from the shorter-term speculators. The latest CME lean hog index is up 13 cents at $90.06. Today’s projected cash index price is up another 24 cents at $90.30. The national direct five-day rolling average cash hog price quote Wednesday was $68.25.