Grain futures did open higher last night, with crude oil pushing $78.00 amid vitriol between the US and Iran over reports that the MOU was falling apart. Overnight headlines shifted that, by morning, we have crude oil off $1.31, trading at 74.54, as the Iranians stayed at the table despite their threat to leave and agreed to nuclear inspections.

Soybeans remained firm overnight, as US soybeans are priced in line with South American beans, while wheat values softened amid heavy hedge pressure. French milling wheat is sharply higher by $4.25 a ton (equivalent to a 12-$0.14/bushel gain) as heat and dryness overcome the EU.

Soybeans are looking for more active flash sales, as global customers are returning to the US, given the firming of the basis in Brazil, and our recent price declines have made us highly competitive on August through December pricing. There is also chatter about South American new-crop soybean production amid high fertilizer prices due to delays in supplies leaving the Persian Gulf, and fears of a super El Niño that may develop this fall, which could cause dryness in the northern portions of soybean-producing areas and delay planting.

Soy oil is still firm this morning after strong gains overnight, as the EPA report on Thursday, after markets closed, showed 736 Mil D4 RINs. This is up from April’s 710 Mil but still below the level needed to meet the new RVO mandate. There is a 90% required mandate, and utilization is running at 76% in May. Green diesel processors will need to increase production, with soyoil as the most economically viable feedstock. July futures are trading below cash levels and are unlikely to see any deliveries on the upcoming June 30 first notice day.

This afternoon’s crop condition reports should be closely watched, as heavy rain of over 6 inches so far in June, and some major producing areas could see crop ratings slip by 1-2%. In past years, when this occurred, trendline yields were not attained. 1983 had seen heavy rains in June, and a shift in the weather brought a hot, dry summer that turned the wet soil into bricks. Currently, that type of forecasting given El Niño development is not anticipated.