Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, May corn was down 2 cents. May soybeans were 3 3/4 cents higher. May soybean meal was up $2.60 and May bean oil was 3 points higher. May SRW wheat was down 5 1/2 cents and May HRW wheat was 8 3/4 cents down. On tap today is the weekly USDA export inspections report as well as the first USDA weekly crop progress reports of the year. The key outside markets see Nymex WTI crude oil weaker and trading around $110.00 a barrel. The U.S. dollar index is slightly lower early today. The yield on the benchmark 10-year U.S. Treasury note is presently 4.35 percent.
Latest on the war in the Middle East…
--U.S. allies pushing for last-minute ceasefire in Middle East war
--U.S. rescues missing airman as Iran strikes Gulf Arab states
--Trump to hold news conference today at noon CDT
--Oil tanker carrying Iraqi cargo seen transiting Strait of Hormuz
--U.S. deploys bulk of its stealthy long-range missiles for Iran war
--Trump threatens Tuesday strike on Iran power plants, bridges
--Japan, Singapore to ensure Australia fuel supply, minister Says
U.S. allies are reportedly pressing for a last-minute deal with Iran, as President Trump extended his deadline to Tuesday for Tehran to reopen the Strait of Hormuz, keeping markets on edge over whether a breakthrough can be reached. Axios reported that Pakistan, Egypt and Turkey are pushing to secure a potential ceasefire — lasting about 45 days — to head off threatened U.S. strikes on Iran’s energy infrastructure and retaliation by the Islamic Republic against countries in the region. Fighting continued, with Israel, Kuwait and the United Arab Emirates reporting Iranian attacks overnight into Monday. Trump on Sunday threatened to destroy Iran’s power plants and blow up “everything over there,” before announcing what appeared to be a new Tuesday 8 p.m. deadline, without offering details.
Colder weather, mix of wintry precipitation across the Plains, central U.S. … The National Weather Service today said a frontal system will drop into the Pacific Northwest/northern Rockies today and will stretch across much of central U.S. into the Mid-Atlantic. This front will bring chances for a changeover from rain to snow/wintry mix late Monday into Tuesday over the Missouri Valley/Corn Belt. As the low moves into the Northern Plains on Tuesday, the associated front will bring mixed precipitation over much of the Northern Plains, Upper Midwest, and Great Lakes Tuesday evening into Wednesday. The moisture will also stretch downward into the southern Rockies/Plains, reinforcing showers and thunderstorms on Tuesday into Wednesday. Below normal temperatures will continue across Northern Plains into New England with highs reaching below freezing over the Northern Plains today.
OPEC+ warns of oil-supply disruptions for “a long time”… OPEC+ over the weekend warned that damage to Middle East energy assets will have a prolonged impact on oil supply even after the Iran war ends, as the cartel approved a symbolic increase in crude oil output quotas for next month, Bloomberg reported. “Restoring damaged energy assets to full capacity is both costly and takes a long time,” the group’s ministerial monitoring committee said in a statement after meeting on Sunday. Any action that jeopardizes security of supply, whether that’s an attack on energy infrastructure or disruption of export routes, increases market volatility and weakens OPEC+’s efforts, it said. Key producers led by Saudi Arabia and Russia agreed to increase targets for May by about 206,000 barrels a day during a video conference.
JBS beef plant strikers in Greeley, Co. return to work… Workers at the world’s largest meat company, JBS, agreed to return to work at the firm’s beef plant in Greeley, Colorado after it agreed to resume negotiations with labor, bringing a three-week work stoppage to an end, their union said in a statement on Saturday and as reported by Reuters. The union representing about 3,800 plant workers said the new round of talks would resume on April 9 and 10 after last month’s strike, to press for wages that reflect inflation and a halt to company charges for replacing protective equipment. “Workers remain united and will continue to fight until JBS fully ends its unfair labor practices,” said Kim Cordova, president of the local union representing the Greeley workers. It is calling for a contract offer that protects workers, shows them the respect they deserve, and pays them a livable wage, he added in a statement. There had been no new deal or change to the original offer, a JBS spokesperson told Reuters.
Ship transporting wheat near Ukraine sinks at sea… A bulk cargo vessel transporting wheat sank in the Sea of Azov, Russian-installed authorities in the Kherson region of southeastern Ukraine said on Sunday and as reported by Bloomberg. “The circumstances of the incident are being investigated, Vladimir Saldo, the Moscow-appointed head of the occupied part of the region, said in a Telegram post. The crew abandoned the ship and managed to reach the coast, with nine members found onshore, according to Saldo. One man has died, and the whereabouts of two other crew members remain unknown,” said the report.
Ukraine strikes Russian nitrogen fertilizer plant… Ukraine over the weekend said it hit a nitrogen fertilizer plant in Russia, while Kremlin’s forces targeted several Ukrainian regions, including a deadly strike in Dnipropetrovsk, as the war shows no signs of slowing down, Bloomberg reported. UAVs struck the KuibyshevAzot facility in Tolyatti, in Russia’s Samara region, Robert Brovdi, a Ukrainian drone unit commander known as Madyar, said in a Telegram post on Saturday. While Russia didn’t confirm the information, regional Governor Vyacheslav Fedorishchev said earlier that the area had come under a drone attack targeting an unspecified industrial enterprise. KuibyshevAzot is one of Russia’s largest nitrogen fertilizer producers. “The crop nutrient has been in focus since the start of the Iran war and the closure of the Strait of Hormuz. That’s choked off vital flows of fertilizers and the gas needed to produce them, boosting the role of Russia, the world’s No. 2 producer, in the global food supply chain,” said Bloomberg.
Global food prices rose in March… The U.N.’s Food and Agriculture Organization said world food prices rose in March, driven by higher energy prices and an increase in freight costs linked to war in the Middle East. An index of food commodity prices created by the FAO averaged 128.5 points in March, up 3 points from February, as disruptions from the Iran war ripple through food supply chains. The 2.4% increase in the gauge — which tracks grains, sugar, meat, dairy and vegetable oil costs — marks the second consecutive month of gains, having risen for the first time in five months in February. While the index monitors raw commodity costs rather than retail prices, the increase signals food inflation may persist as conflict in the Middle East lifts energy and fertilizer costs, as well as disrupts flows of grains and key inputs through the Strait of Hormuz. The largest gains were seen in vegetable oil and sugar prices, though figures for meat, dairy and cereals also climbed.
Big hedge funds turn bullish on wheat futures… Hedge funds have turned net bullish on wheat futures for the first time in nearly four years, according to a Bloomberg report, “betting on higher prices driven by dry weather in the U.S. and a shortage of fertilizer and fuel arising from the war in the Middle East.” Long positions on Chicago soft red winter wheat outnumbered short contracts by 8,641 in the week ended March 31, according to weekly data published Friday by the Commodity Futures Trading Commission. This reversed a net-short position that had persisted since June of 2022, said the report. The shift was driven by a surge in long positions to 117,375 contracts, the highest total in more than six years. Short positions fell to 108,734 contracts, according to the CFTC data. “Farmers across the world are rushing to secure supplies of critical inputs and, in some cases, switching to crops that are less dependent on nutrients. War-related disruptions are leading to concerns around food security and have reversed sentiment in agricultural markets that were earlier pressured by ample supply,” said Bloomberg.
Malaysian palm oil futures trade near steady… Malaysian palm oil futures were little changed, hovering around MYR 4,840 per MT after two sessions of gains. The closure of China’s Dalian exchange for a holiday offset weakness in Chicago soyoil prices. Sentiment stayed cautious amid escalating geopolitical tensions, with U.S. President Trump’s repeated threats against Iran and fears of Gulf retaliation adding volatility across commodities. On the supply side, a Reuters poll ahead of official monthly data suggested Malaysia’s inventories likely saw their steepest draw in three years in March, falling to the lowest since July. Meantime, cargo surveyors estimated shipments surged 44%–57% mom. Separately, top supplier Indonesia reported double-digit palm oil export growth in February as the sector prepares for a higher B50 biodiesel mandate in July. Regarding demand, March imports by India, the world’s largest consumer, dropped 19% to a three-month low, with refiners delaying purchases amid elevated prices.
Cattle futures bulls in firm command… June live cattle on Thursday rose $1.975 to $246.325, hit a contract high and for the holiday-shortened week were up $7.55. May feeder cattle futures Thursday gained $2.625 to $370.625, hit a 5.5-month high and for the week were up $10.80. The live cattle and feeder cattle futures markets saw technically bullish weekly high closes Thursday that suggest follow-through buying strength early this week. Technical buying was featured again Thursday. Cattle bulls were also encouraged by higher cash cattle trading last week. USDA on Wednesday reported very light cash cattle trading, averaging $238.00. Cash trading the week prior averaged $235.69. Tight supplies will continue to favor feedlot operators in cash negotiations in the coming weeks, especially with the outdoor grilling season just ahead. Recent heat and winds across the Plains have underscored the tight beef supplies.
Lean hog futures bears have momentum on their side… June lean hog futures on Thursday fell $0.70 to $104.475 and for the week were down $1.65. The hog futures bears had the better holiday-shortened week last week, amid declining cash hog and CME lean hog index prices recently. Still-wobbly trader/investor risk appetite in the general marketplace is keeping the speculator hog futures bulls leery amid the ongoing war in Iran. The latest CME lean hog index is down 7 cents to $90.41. Today’s projected cash index price is down another 24 cents at $90.17. The national direct five-day rolling average cash hog price quote for Friday was $70.36.