July soybeans challenged $12.00 overnight.

Grain markets leaned higher overnight, helped along by another strong move in energy. Soybeans made a push toward $12, with processors still enjoying exceptionally rich returns; crush margins are hovering near record territory at roughly $3.45. Corn continues to draw support from a firm interior cash market, while ethanol economics remain favorable at about $0.35 per gallon. Attention today will turn to the weekly ethanol report, particularly production levels and any fresh signal on demand.

Weather remains a major feature as well. Drought still covers a large share of the U.S., especially across the Plains and the western Corn Belt, though conditions around the Great Lakes are notably better. With regular moisture there, fieldwork has continued and planting progress is advancing. Another meaningful improvement in planting pace is expected in next week’s update. Weather models are still holding out for moisture towards the end of the month for KS, which is keeping the wheat trade at bay, even though KC Wheat annual highs were challenged overnight. With so much wheat already in the boot stage in Northern and Western Kansas (and freeze damage being exposed with this week’s heat), yields have already been dramatically affected.

Outside markets are adding another layer of support. Energy is moving higher again this morning as the conflict involving Iran continues to disrupt trade flows. Although President Trump has prolonged the U.S. ceasefire, tanker traffic through the Strait of Hormuz has yet to resume. That is keeping the market focused less on the political headline itself and more on the physical bottleneck. With fuel and fertilizer shipments still constrained, global supply chains remain under pressure. More importing countries are now warning that reduced access to energy products is beginning to weigh on their production outlooks, both through tighter fertilizer availability and concerns over diesel supply.

Live and feeder cattle futures continued their losing ways yesterday, marking five straight trading-day session losses. The cash feeder index was off 41.32 at $374.37, which is not helping any seasonal bullish tone. Feeder cattle have again gone discount the cash index, with the April contract seven trading days away from expiration at a $8 discount. May is $16 under that index, when seasonally, May should be a strong month. Technical liquidation from index funds that are exiting the ag trade has become the problem.

On the charts, June cattle have crucial support at $242.00-242.50. If that gets breached, then it's back to the weekly chart breakout support of 239.00-239.50. Tuesday’s high near 249 has become resistance. August feeders are in trouble, having closed under 360 yesterday, and need to quickly find buying interest, or else the next target to the downside for challenging is a pocket at 354-356. The difficulty with feeder cattle is the lack of volume and trading participation. This creates voids in the market where plummets or price jumps of $1.00-2.00 in one-two minutes become commonplace.