Japan raises interest rates for the first time in almost 30 years.

Grain futures are mixed, with overnight strength fading after lite deliveries were posted. Still, more importantly, the US dollar softened as Japan raised interest rates for the first time in almost 30 years. The Bank of Japan raised its lending rate by .25%, citing a need for the yen to appreciate. The rate hike caused the US dollar to decline (off $0.60 at 103.72 at 7:30 AM), and the yen rose from 154 to 150:1 US dollars. Japan central bank hit the dead additional rate hikes could be coming to help lower the cost of imported goods like food and fuel. Meanwhile, the US Central Bank concludes its meeting today with no expected change in Fed funds lending rates. Chairman Powell’s comments about an interest rate cut in September will be watched.

Crude oil prices rallied over $2.50 overnight alongside the dollar decline as Israel confirmed the assassination of Hezbollah and Hamas leaders in Beirut and Tehran. Israeli attacks will raise the geopolitical risk across the region again and the potential for it to spread the conflict. The Gaza peace talks are expected to stall now or end following the attack. Energy prices had been in retreat due to the weakening SE Asian demand.

Bloomberg News has reported that US Lawmakers are pressuring the Biden Administration to address the widespread reports of fake Chinese cooking oil being imported into the US. In a letter, 11 House members have pressed Biden and EPA head Regan to show that UCO coming into the US is not made from virgin vegetable oil, which is causing environmental damage. In its quarterly earnings call yesterday, ADM stated that the company is seeing a “significant moderation” in UCO imports. The EIA will release its May feedstock usage and plant the past report on Thursday which should reflect expanding soy oil use in renewable fuel production.

Deliveries were light against August soybean futures at 44 contracts with Bungee putting out the receipts that were stopped by ADM and StoneX customers. Cargill and ADM delivered 936 contracts of soy oil receipts, while Dorman Trading in Wells Fargo were the stoppers. No soymeal was tendered.

US corn is currently cheaper than Brazilian corn, and it’s thought that China may be considering its options for future corn import demand. Brazilian corn has not retreated as fast as the US values due to farmers not wanting to sell below the government's minimum price offer. It’s also anticipated that we should soon see China stepping in to buy sizable quantities of US soybeans, as August-January is their window for buying US beans. It’s just a matter of them starting a purchasing program that supports the market.

The heat is on across the Plains and mid-Central US. A high-pressure Ridge fans extreme Central US heat with highs ranging from mid-90s to lower 100s across the Plains and Midwest highs from mid-80s to upper 90s. Kansas had high temperatures reaching 98-110° yesterday and is ground zero for the extreme heat for the next week. This heat will push crop maturity with limited rainfall that drops across the Plains, Delta, and W Midwest. The GFS model shows below-normal rainfall west of the Mississippi River. The Ridge writing thunderstorms will occur over the next 48 hours, with drier weather starting Friday. The 11-15 day forecast. Futures cooler temperatures across the northern half of the Central US with increasing shower chances. The rains for the West and South have low confidence in the longer-term models.

Live and feeder cattle futures closed higher on Tuesday as fund liquidation occurred during the session. Strengthening outside markets is promoting a firmer start for cattle this morning. The negotiated fed cattle trade has no bids or offers yet quoted, with volume expected on Thursday or Friday trade. Box beef values were slightly lower on Tuesday, with Choice giving up $0.33 at $314.48 and Select $0.14 lower at $301.38.

Beef imports reported for the week ending July 20 at a four-week high of 62 Mil pounds. Imports from Australia reached a new high for the year at 18.4 Mil pounds. US lean beef is now priced at $76/CWT premium to landed Oceana beef at US East Coast ports. US market looks to remain elevated on light cow slaughter rates, while Australia and New Zealand imports will continue to rise as price spreads are at a record US premium.