Soybean producers: Finish old-crop sales... Prices surged in recent days and are challenging $12.00 resistance. Prices are near-term overbought and risk remains, especially for old-crop. Sell the remaining 10% of 2025 production to get to 100% sold. Reports of China demand and weather concerns have driven new-crop futures higher as well. Advance new-crop sales an additional 15% to take advantage of the increase in price. While the rally can continue, the market remains fast and fluid. With higher acres and export demand unknown, price protection is prudent. You should now be 100% sold on 2025 production. Cash only marketers should now be 45% forward sold on anticipated 2026 production while hedgers should be 25% forward sold with hedges on an additional 40% of expected production.
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Global financial markets re-focused on the Middle East Wednesday after President Trump declared the cease-fire with Iran over following a midweek exchange of fire between the U.S. and Iran, with Oman and Bahrain also on the receiving end of Iranian missile fire. That sent crude prices jumping, with Brent briefly trading above $80 a barrel in Wednesday’s session before settling 5.2% higher at $78.02. West Texas Intermediate crude rose 4.4% to $73.52 a barrel after having previously traded back to pre-war levels.
U.S. military forces launched new strikes on Iran late Wednesday afternoon, according to U.S. Central Command.
The renewed fighting came as the U.S. on Tuesday targeted Iranian sites following Iran’s attacks on shipping in the Strait of Hormuz. Earlier Tuesday, the Trump administration pulled a license that had allowed Iran to sell crude.
- “The key question is whether these attacks will trigger a more serious resumption of fighting or if they will be followed by another tenuous truce,” said Helima Croft, head of global commodity strategy at RBC Capital Markets, in a note. “As President Trump continues to oscillate between more combative and conciliatory rhetoric, we will be watching whether Washington follows through on its threat to resume its naval blockade, thereby eliminating the most material MOU (Memorandum of Understanding) benefit for Iran.”
At a minimum, the latest round of maritime attacks will likely curtail the number of vessels willing to transit the Strait, she wrote. “Certainly, we believe the risk of a catastrophic accident—potentially involving an LNG tanker—will deter Tier 1 Western and Japanese shippers from embarking on roundtrip journeys.”
Croft said that with Iran continuing to mine the middle lane of the Hormuz corridor, vessels face an untenable choice of whether to use the narrow Omani lane and risk live fire, or to comply with the Islamic Revolutionary Guard Corps’ terms in order to access the potentially safer Iranian lane. “We do not see their risk aversion fading in the face of another potential ‘peace in our time’ headline given this post-MOU cycle of violence,” she said.
Russia’s diesel export ban: While Middle Eastern events sent oil prices higher, a decision by Russia to ban diesel exports may have had the biggest impact on agricultural futures Wednesday.
August heating-oil – a proxy for diesel – was up 12.6% on Nymex. The ban comes after Ukrainian drone attacks on refineries sparked a fuel crisis in Russia, which is typically the world’s second-largest exporter of diesel. The jump in heating oil lent support to soybean oil futures, with the September contract up 222 points to 70.38 cents and hitting a three-week high.
- “Gasoline, diesel and jet fuel prices remain elevated relative to crude, supported by tight supply and peak seasonal demand,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note. “ As a result, consumers around the world have yet to feel the full benefit of the earlier crude-price decline, while the latest rebound risks delaying that relief further. Persistently firm product prices could also complicate the inflation outlook if crude continues higher.”
Northwest Corn Belt faces likely heat stress: A ridge of high pressure will build through the Rocky Mountain region to the U.S. Great Plains and part of southern Canada’s Prairies in the next few days is set to suppress rainfall for a week to nearly 10 days and could induce several days of very warm to hot temperatures, said meteorologist Drew Lerner of World Weather in a Wednesday afternoon note.
- “The result of this mix will be a notable dry down period for the northern U.S. Plains and northwestern Corn and Soybean Belt that will stress dryland crops especially in areas of low soil moisture which includes portions of Nebraska, South Dakota, southwestern Minnesota and northwestern Iowa,” he wrote. “Late July and early August weather will need to be wetter and milder to protect production potentials.”
Lerner noted some rain has fallen recently in the area likely to see the hottest, driest weather, but that it wasn’t enough to carry crops through the anticipated hot-and-dry period without inducing greater stress.
Lowest wheat acres since 1877: Wheat risks becoming an “also-ran” crop as a combination of economic, agronomic and geopolitical forces reduces its appeal, resulting in a long-term decline in acreage to the benefit of corn and soybeans. This Pro Farmer report breaks down the drivers and looks ahead to what the future may hold when it comes to the food staple’s role in U.S. agriculture. Read it here.
Ethanol production falls: U.S. ethanol production fell by 24,000 barrels a day last week to 1.09 million barrels a day, the Energy Information Administration said Wednesday. That was toward the low end of estimates in a Dow Jones survey of analysts that ranged from 1.08 million to 1.14 million barrels a day. Ethanol inventories declined 762,000 barrels to 23.9 million barrels, putting stocks at their lowest level since the beginning of the year.
Deere settlement: In a 10-year settlement with the Federal Trade Commission and five states, John Deere must now give farmers and independent technicians the same repair tools and software as authorized dealers, reports Farm Journal’s Eduardo Morales. After settling the right-to-repair lawsuit, John Deere will be required to provide farmers and independent repair providers the same resources available to dealers on “fair and reasonable” terms, including:
- Reading, clearing and resetting electronic fault codes.
- Reprogramming of electronic components.
- Restarting a machine following an emissions-related shutdown.
- Viewing and searching technical manuals, troubleshooting solutions, and other guidance/information useful for equipment diagnosis, maintenance, repair or upgrade.
Minutes underscore Fed’s divide: Minutes of the Federal Reserve’s June policy meeting – the first to be led by new Chairman Kevin Warsh – underlined divides on the central bank’s rate-setting Federal Open Market Committee. Policymakers opted to leave rates unchanged, but a hawkish tone to the policy statement and Warsh’s reiteration of the Fed’s commitment to fighting inflation led traders to more aggressively price in rate hikes. The minutes said that “many” participants indicated the appropriate level of rates would be near or slightly below their current level by year-end, while “many other participants” saw the appropriate level above the current range by the end of the year.
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