New contract highs in soybean oil leads overnight soybean strength.
Grain Overview
Energy values are weaker this morning following news of a potential extension of the US-Iran peace deal and a possible agreement to end the war. Details of this proposal are still being worked out though, and its passage remains uncertain. The peace deal has now moved to President Trump for his approval.
Aside from geopolitical developments, global weather remains a primary topic.Elevated temperatures are forecast for much of the Corn Belt for the next two weeks, but after that, conditions look to improve. India is forecasting that its monsoonal rainfall will be disappointing and is now at its lowest level in 11 years due to the super El Niño. India may become an important buyer of soybeans, rice, and edible beans later this year. This is important especially since they US and India trade pact looks to be announced soon. Keep an eye on European wheat production; France and Spain are struggling with heat and drought. Crop ratings are declining weekly.
Today’s trade brings the month-end, but given the lack of contracts going into delivery, it will have less impact on futures. Traders have become leery of establishing new positions ahead of weekends, which may limit interest across the commodity market in today’s trade. This is why the last trading day of the month/first trading of the month sometimes creates lows and highs
This morning’s export sales put corn above 1 MMT, but that was on the lower side of estimates. Meanwhile, soybeans came in just under 300,000 MT, which is in the middle of expectations. Wheat had a net cancellation with an old crop moved to new crop. Old crop was -807,000 MMTs, while new crop was 1.02 MMTs. We are seeing exporters start to book some new-crop grain.
Soybeans continue to find support from the rising soybean oil market that does not decline with crude oil. Note that we are at new contract highs as the US needs Canadian canola oil, imported tallow, and more used cooking oil to meet EPA/RVO targets in 2026.
Cattle Overview
Yesterday, live and feeder cattle futures behaved like a market that has topped. Early strength on the morning of the third-day rally gave way to a low-end close. Not a good sign going into Friday for a weekly settlement. On the week, live cattle August are still higher, but August feeders are lower on the week. The old saying is feeders are the leaders… Feeders are performing terribly. This soft trade is occurring as the feeder index showed a gain yesterday, closing at $369.63. A $16 plus discount did not seem to help out yesterday. Today is important for bulls to put in a better-performing trade to end the week.
Meanwhile, box beef values slipped on Thursday, giving back some of the substantial gains seen on Wednesday. Choice was off $2.40 while Select gave up $3.71. Boxed beef above 400 has become elusive, as consumer demand will not seem to pay for it. Negotiated cattle trade has seen some bids in Nebraska and Kansas at $253, but they are being passed for now. That would be off $7-8 for the week. It’s possible that trade will not be cooler today until after the close. August feeders need a Friday close above 357 to stop technical chart damage for a while, and offer up an improving recovery trade.