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Corn conditions improve more than expected... USDA rated the corn crop as 72% “good” to “excellent” as of Sunday, up one percentage point from last week. Analysts expected no change. The “poor” to “very poor” rating held at 5%.
USDA reported 94% of the crop was emerged, equal to the five-year average. Of the top 18 production states, emergence is behind average across much of the eastern Corn Belt and Mid-South.
Soybean conditions decline... USDA rated the soybean crop as 66% “good” to “excellent,” down two points from last week. Analysts expected no change. The “poor” to “very poor” rating increased two points to 7%.
USDA reported soybean planting reached 93% done as of Sunday, one point behind average. Emergence stood at 84%, one point ahead of normal for mid-June.
Spring wheat conditions again improve more than expected... USDA rated the spring wheat crop as 57% “good” to “excellent,” up four points from last week. Analysts expected a one-point increase. The “poor” to “very poor” rating held at 9% -- all in the poor category.
USDA reported 89% of the spring wheat crop was emerged (three points behind average) and 4% headed (two points behind).
Winter wheat harvest continues to lag... USDA reported 10% of the winter wheat crop was cut, six points behind the normal rate for mid-June. Harvest stood at 56% in Texas (57% average), 30% in Oklahoma (46%) and 3% in Kansas (11%).
Crop development remained slightly ahead of normal, with 93% headed versus the five-year average of 92%.
Cotton conditions decline... USDA rated the cotton crop as 48% “good” to “excellent,” down one point from last week. The “poor” to “very poor” rating declined two points to 19%.
USDA reported 85% of the cotton crop was planted (five points behind average), 19% squaring (two points ahead of average) and 3% setting bolls (equal to average).
Reports: Iran seeks truce with Israel... Tehran has asked Qatar, Saudi Arabia and Oman to press President Donald Trump to use his influence on Israel to agree to an immediate ceasefire with Iran in return for Iranian flexibility in nuclear negotiations, two Iranian and three regional sources told Reuters. The Wall Street Journal also reported Iran told Arab officials it would be open to returning to the negotiating table as long as the U.S. doesn’t join the attack.
Trump said Iran wants to talk about de-escalating the conflict with Israel. Asked about reports that Iran wants to work toward a resolution, Trump responded “yeah,” and added, “they’d like to talk, but they should have done that before.”
Israel will continue its military operations against Iran regardless of the progress of any potential negotiations involving the U.S., Israeli Strategic Affairs Minister Ron Dermer said in an interview on Bloomberg Television.
NOPA soy crush a May record but shy of expectations... Members of the National Oilseed Processors Association (NOPA) crush 192.8 million bu. of soybeans in May, which was a record for the month but a little below the 193.5 million bu. analysts expected. Crush increased 2.6 million bu. (1.4%) from April and 9.2 million bu. (5.0%) from last year. NOPA data implies the full May soybean crush will be 205.0 million bushels. Our soy crush forecast for 2024-25 is 5 million bu. above USDA’s at 2.425 billion bushels.
Soyoil stocks held by NOPA members totaled 1.373 billion lbs. at the end of May, down 154.3 million lbs. from April’s 10-month high of and well below the average pre-report trade estimate of 1.451 billion pounds.
Summer economic outlook: Watchful waiting amid tariffs, legislation and geopolitical risks... Dr. Vince Malanga, president of LaSalle Economics, writes: “We are viewing the summer months as a period of watchful waiting,” with several key issues driving market uncertainty and policy decisions.
Tariffs: Malanga highlights that effective U.S. tariffs have risen from 2.5% pre-Trump to about 12% currently. He believes that “the inflationary impact from tariffs is being overstated,” noting that May price indexes showed “no discernable impact.” A similar report for June “could cause tariff hysteria to dissipate, easing inflationary expectations.”
Congressional gridlock: Malanga warns of “acrimonious debate… over spending” in Congress as tax and spending bills move forward, anticipating a resolution by the August recess but noting, “negotiators could scare investors into thinking a stalemate could occur.”
Geopolitical tensions: Malanga points to energy market volatility due to “pending geopolitical issues involving Russia/Ukraine and Iran versus Israel and the U.S.” While lower energy prices helped in May, “oil and gas prices have rebounded” amid intensifying tensions. He cautions that events such as “Israel’s attack on Iran could worsen this condition,” but also notes the potential for a price drop if tensions ease and spare capacity is tapped.
Policy outlook: FOMC in wait-and-see mode. Malanga expects the Federal Reserve to remain on hold through the summer: “Barring a sudden deterioration in the labor market, which we do not rule out, we suspect the FOMC is likely to be in a watch and wait mode through summer.” He criticizes the Fed’s stance, arguing “the FOMC should be cutting interest rates months ago in preemptive fashion,” given “a slowing economy with diminishing inflation pressure while monetary and fiscal policy is restrictive.”
Malanga underscored the importance of “strong non-inflationary economic growth… to ease deficit concerns,” but stresses that “a solid recovery in the housing market remains a must.”
He concludes: “A lowering of mortgage rates is necessary… and the FOMC could be instrumental… by ending its quantitative tightening and ratifying a decline in long term rates by cutting short term rates. If the tariff bogeyman is slayed and geopolitical tensions ease, there is no reason for such action to be delayed.”