LEADING OFF: Grain and oilseed futures are mostly lower to start the week with pressure from technical selling, generally favorable Midwest crop conditions and positioning ahead of Tuesday’s pivotal USDA reports on acreage and quarterly grain stocks. Corn is down 7 to 8 cents, with July and September making new contract lows. Soybeans are down 9 to 10 cents, but still well above lows from Thursday. Wheat is down 1 to 3 cents and has made a new two-week low in Chicago. Cotton is up about 100 points.
Outside markets have been relatively quiet to start the week. Crude oil is up about 70 cents, while gold is down $35 to $40. U.S. equity futures are flat, and the dollar index is flat.
The “ceasefire” between the U.S. and Iran is back on this morning, after a few days of back-and-forth attacks over control of the Strait of Hormuz. The two sides agreed today to halt the attacks and resume negotiations. The latest flare-up started on Thursday when Iran attacked a commercial vessel traversing the Strait of Hormuz along the coast of Oman, a U.S.-backed route. But Iran is claiming the recent Memorandum of Understanding gives it complete control over traffic in the Strait as it re-opens, and it wants ships to travel closer to its shoreline. It’s unclear if or how this particular issue has been resolved.
Along with the big June 30 USDA reports, this is the time of year where weather takes center stage for the grains, and there’s plenty to watch currently, including a high-pressure ridge causing hot and dry weather across the Midwest over the next week. The heat wave in western Europe abated somewhat over the weekend, particularly in France, but World Weather warns that heat and dryness will remain intense, especially in southwest Europe. Meanwhile meteorologists and traders continue to monitor for signs that El Nino is having a greater influence on global weather.
CORN: The heat wave in the Midwest is not necessarily a problem in many areas thanks to somewhat sluggish crop development thus far and abundant rains recently. World Weather says that soils are saturated down to three feet in parts of “Missouri, southeastern Iowa, central Illinois, central and southern Indiana and parts of Kentucky.” Southern Indiana, Kentucky and southeastern Illinois saw multiple inches of rain over the weekend causing flooding. The hot and dry weather will help soils dry out, and given the abundant soil moisture, should also jump-start growth in many areas.
That said, any stretch of temperatures well into the 90s, with warm overnight temperatures, will feed some underlying concern, and there are parts of the western Corn Belt in particular that already are needing more rain, including Nebraska, parts of Missouri and Kansas. World Weather says that by next weekend the most extreme heat and dryness will migrate further to the west, posing less of a threat to the Corn Belt, but if that forecast shifts then concern about crops could quickly grow.
SOYBEANS: USDA announced a fresh flash export sale this morning of 136,000 metric tons to “unknown destinations” for 2026-27. The market will assume that is China, and traders will remain on the lookout for further Chinese buying, which has started to finally pick up in the past couple of weeks.
Technically, Thursday’s bullish reversal is the key factor right now. November soybeans will have to close below $11.30 to invalidate that signal.
WHEAT: There’s plenty of heat and some dryness globally making headlines, but for the most part it is of limited significance to wheat right now. The heat wave in France is too late to have a major impact on winter wheat there, and crop problems in the central and southern U.S. Plains are well known at this point. Meanwhile parts of the northern Plains, including the Dakotas, far western Minnesota and Montana, saw healthy rains over the weekend, a boost to spring wheat. Conditions are favorable in eastern Europe and Russia, and the longer-term concerns about El Nino impacting Australia’s crop haven’t come to fruition yet. Demand for U.S. wheat remains lackluster and the global food security story tied to the war in Iran has faded. Technically the market remains under pressure, but it’s direction from here could depend on corn and soybeans, and how those markets are impacted by Tuesday’s USDA reports.
Agrus this morning raised its 2026-27 Russian wheat crop estimate to 91.2 MMT, up from a prior forecast of 88.7 MMT and up from 90.4 MMT in 2025-26.
LIVESTOCK: Lean hog futures, particularly deferred contracts, found support from last Thursday’s quarterly Hogs and Pigs report. October December and February futures all gapped higher on Friday morning and wound up posting bullish key weekly reversals strongly indicating they have likely now put in significant lows. The Hogs and Pigs report itself was only mildly friendly: USDA pegged the all hogs and pigs total as of June 1 at 100.0% of a year earlier, below trade estimates that were clustered in a narrow range from 100.6% to 101.6%. The June 1 market hog inventory was also pegged at 100.0% of a year earlier below trade estimates that ranged from 100.8% to 101.8%. USDA confirmed continued liquidation of the breeding herd, which it pegged at 98.8% of a year earlier, near the low end of the range of expectations.
Live cattle ended the week on a down note, losing more than a dollar under pressure from pre-weekend speculative position evening and technically-driven long liquidation amid a continued lack of fresh Plains cash trade and weaker wholesale beef prices. Feeder cattle futures fell by about $3.50.
