Corn and wheat are higher this morning, maintaining overnight strength.

Energy markets are pushing higher this morning after weekend talks between the US and Iran failed to produce any progress toward ending the conflict. In response, President Trump has ordered US Navy ships to move toward the Strait of Hormuz, a decision that has raised questions among analysts, given that the passage has effectively been shut for weeks. The administration also indicated elevated gasoline prices could persist through the November elections, a scenario that would weigh heavily on summer travel and broader economic activity. Signs of a slowing economy are becoming more visible, increasing concern among managed money participants.

The standout to notice is that for the first time in six weeks, energy prices are still higher Monday morning after a strong start Sunday night, while grains also maintain gains. Even stock indexes are still lower this morning, not reversing losses by much. In the past weeks, all energy and grain strength were reversed by the morning hours on Monday.

Grain markets are trading firmer from the overnight, led by renewed buying interest in soybeans. Rising input costs are reinforcing concerns over global acreage, providing underlying support across the complex alongside steady export demand. Corn is seeing a pickup in flash sales, easing fears that demand was pulled forward earlier in the season. Wheat is gaining strength as reports suggest portions of the Southern Plains crop may be abandoned. Soybeans continue to strengthen into the session, with new crop contracts showing the most resilience.

Positioning data from Friday shows index funds holding long positions of 219,000 contracts in corn, 190,000 in soybeans, 151,000 in soybean oil, and 94,000 in meal. They also hold 10,000 contracts in Kansas City wheat, while remaining net short roughly 6,000 in Chicago wheat. With outside market uncertainty rising and production risks tied to higher fertilizer and fuel costs expanding globally, funds are likely to become more defensive in protecting these positions. Rains in the Western HRW wheat belt where a dud, and it looks to remain disappointing in the upcoming 6-10 day forecast as well. This is helping Kansas City wheat reverse last week’s selloff by $0.20 so far.

It was a strong week for cattle futures trading last Friday, with the live cattle contract at an all-time high and feeder cattle trading within a dime of last fall’s highs. Negotiated fed cattle trade and record prices posted in all regions, with some 250 trades occurring in the north, and dressed sales were also up $4 at 389. Seven live trade shows, a gain of $249, were held, with trade also occurring on Saturday. Cattle slaughter is drifting, and light runs are still in play. Despite this, last week's choice box beef fell by $6.88, and select fell by $4.85.

Live and feeder cattle contracts could open softer this morning. The question is whether they accelerate a correction or get bought again. With outside markets negative for feeder cattle, this isn’t their first rodeo; they have overcome this before. The conversation and energy prices will stay high for quite some time, well into the elections, and will begin to cause consumer inflation. Will beef maintain its share? June live cattle are in resistance at 250, feeder cattle have resistance at Friday’s high of 373-374. If feeder cattle overcome the price, there is a gap from 375-379 on the continuation chart to plug.