Grains climb higher again overnight, as the U.S. dollar potentially breaks down on the monthly charts.

Grains have created a morning event that has remained a constant: higher starts over the past week. The only question is: can the day-session seller vigilantes stall it out again? Meanwhile, gold adds another $200 in gains on the session, with silver tagging $120 overnight, up $6.00. The US dollar is setting up for a monthly breakdown on the charts if we close below 9600 by Friday. Currently trading down $0.14 at 96.14. Jobless claims this morning suggest the Fed probably could’ve lowered rates yesterday, based on prior methodology.

Strength in the metals is tied to the chaos of a likely government shutdown occurring at then this week. Fortunately, ag spending has been approved through September 30, but 80% of the US budget remains unsettled. The Democrats argue that unless DHS funding is removed from the rest of the bill, the bill stands little chance of passing on Friday, and that the government will halt some services. What is missing from the Democrats' narrative is that ICE is already funded through 2027 in the prior bill.

Yesterday, the Federal Reserve left interest rates unchanged, which was not a surprise. With this morning’s weekly jobless claims, the labor market concerns will start to move more and have an impact. Amazon yesterday announced that another 16,000 corporate jobs would be cut. Export sales for the grains were down as expected from last week, but corn still was well above what was needed to continue to exceed the pace of what the USDA has planned for at over 1.65 MMTs.

The energy markets are all sharply higher today, with spot crude oil up over $2.00 barrel as Pres. Trump is raising rhetoric again over Iran and their wanting to again increase their nuclear ambitions, and there are concerns about a potential US military strike with the Abraham Lincoln Carrier Strike Group in the Middle East. This has added risk premium of over $3.00 over the past few days, as Iran exports up to three MM barrels a day to world usage. One of the whisper concerns is always that Iran could do something to block the Straits of Hormuz, which 27% of all the world crude oil passes through.

Production forecasts for Argentina remain on the decline, as promised rains are still expected, but when they arrive, they are always scattered and not very widespread. For now, rain is again expected early next week in the dry areas of Argentina. If those rains are missed again, more premiums will start to push into soybeans, as July beans now are again above $11.00 today, and a close above that level could extend gains into early next week.

Cattle futures pushed higher yesterday after a weak start, where feeder cattle took out the lows of the week and then reversed, taking out the highs of two weeks ago. Feeder cattle are now poised to push higher, with live cattle also now challenging major resistance with the April contract. The cash feeder Index slipped yesterday by $0.74 to $363.99, while January feeder cattle now carry a $4.00 premium.

Yesterday, box beef had choice gaining $1.63 at $369.74, while select also picked up $1.62 at $363.57. Supportive for the cash trade is that the choice cutout has climbed higher every week since the beginning of the year, adding $22/CWT to the value since the last week of December. April cattle are into resistance, where a close above 240 would be a breakout. March feeder cattle are now technically targeting 270-272 if they don’t falter today. Tomorrow after the close is the annual US Cattle Inventory report. A slight reduction in total inventory numbers is expected.