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A New World Screwworm case was found in Mexico just 25 miles from the U.S. border, USDA Secretary Brooke Rollins said Tuesday. The detection of the flesh-eating parasite in a five-year old goat in Mexico’s Coahuila state is the closest confirmed case to the U.S. border during the most recent outbreak, Reuters reported.
The detection came after USDA on Friday said a case of NWS had been found in a sheep in Mexico 31 miles from the U.S. border. The U.S. border with Mexico has been closed to cattle imports since July due to the screwworm outbreak, a factor that has helped drive up prices for feeder and live cattle.
Commodity ‘supersqueeze’: Don’t call it a commodity “supercycle” — it’s more of a “supersqueeze,” argue strategists at HSBC, one of the world’s largest international banks, in a note this week.
So far, commodity markets have absorbed the supply shocks resulting from the Iran war and the closure of the Strait of Hormuz better than worst-case scenarios anticipated, wrote Paul Bloxham, chief economist for global commodities, and Duncan Toms, a multi-asset strategist. That’s a reflection of ample supplies and rapid shifts to redirect commodity trade, but inventories will continue to run down the longer the strait remains closed. And that makes it more likely markets will reach “tipping points” – though when those arrive is difficult to determine, they said.
HSBC’s commodity cycle model categorizes the market into one of three categories: Weak Bull, Bear, or Super Bull. Statistically, the model indicates that the market is in a “Super Bull” cycle, which should continue. The only parts of the commodity market pulling the probability of a “Super Bull” down from 100% are lead, platinum and silver. The assessment is driven more directly by commodities linked to the Strait of Hormuz, particularly crude oil and diesel.
- “Our take is that this is very different to earlier ‘super-cycles’, because it is driven by supply disruptions, not strong demand. In both cases prices are high, but for different reasons. Rather than a ‘super-cycle’, we have been calling it a ‘super squeeze,’” they wrote.
India faces poor monsoon: India’s monsoon will be an erratic rainfall producer in 2026, World Weather Inc.’s Drew Lerner said in a Tuesday note. The El Nino weather pattern will hinder some of the convection, although there is some potential for greater than usual rainfall from Rajasthan into central and northern Pakistan, he wrote, while far southern and extreme eastern India may be a little wetter than usual. The driest bias may be in central crop areas.
- World Weather, Inc. expects this year’s monsoon to be influenced by El Nino in central parts of the nation, with soybean, corn, groundnut and other crops experiencing less-than-usual rainfall.
Exchanges vs. betting markets: The Commodity Futures Trading Commission last week approved “perpetual futures” tied to the price of bitcoin. As Barron’s explains, perpetual futures don’t carry an expiration date and, importantly, didn’t debut on a major U.S. futures exchange, but are instead available on Kalshi, a betting market. Since the approval last Friday, CME stock is down roughly 11% and shares of Cboe Global Markets shed around 20%. Barron’s quoted TD Cowen analysts, who wrote: “The approval likely creates more competition in the retail market, and is likely to curtail multiples on selected exchanges. We expect P/E multiples to remain under pressure as investors work through key risk and shifting market structure.”
The report noted that perpetual crypto futures are a trillion dollar asset class on offshore markets, but were previously inaccessible to U.S. customers. CFTC Chairman Mike Selig last week wrote that the approved framework “can limit excessive leverage, volatility and systemic risk, rather than pushing those risks offshore to unregulated venues.”
Critics charged that the CFTC was abdicating its responsibility to protect investors. “Without expiration dates to impose discipline, perpetual futures facilitate continuous speculation and potentially overtrading, rapid losses and financial harm,” said Benjamin Schiffrin, director of securities policy for Better Markets, an investor advocacy group.
China lifts Brazil beef bans: China’s customs agency said it has lifted bans related to foot-and-mouth disease in northern Brazil, and recognises the whole of Brazil as free of the disease, Reuters reported, citing an official notice released on Tuesday. Brazil, the world’s largest beef and chicken exporter, which sent more than half of its beef exports to China last year. The report said trade data shows China, the world’s biggest beef importer, procured meat worth nearly $3 billion from Brazil in the first quarter of this year, its trade data show.
SAF shortfall: A report in the Wall Street Journal notes that supplies of sustainable aviation fuel, or SAF, remain critically low, despite surging demand as a result of the Iran war and the accompanying sharp climb in traditional fuel costs. The report noted that last year, SAF made up only 0.6% of fuel used for flights, according to the International Air Transport Association. Four years ago, the United Nations’ International Civil Aviation Organization expected SAF production volumes to reach roughly five million tons in 2026. But today they stand at just over two million tons, while total jet fuel consumption is close to 300 million tons.
- Expensive production and acquisition costs explain the scant supply, the report said, noting that manufacturing largely focuses on converting used cooking oil, animal fats and forestry waste into jet fuel. Airlines so far have favored these “drop-in fuels,” because they are chemically identical to fossil fuels and work with traditional engines.
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