Written Commentary
SOYBEANS
A stronger start across the soy complex following strong Chinese demand last week and ahead of Wednesday’s August USDA report. The bulls have the tentative edge this morning on oversold conditions in beans, anticipation of additional Chinese demand this week, and China’s announcement of another auction of just over 500,000 tonnes of reserve beans as they continue to make space for US arrivals. Wednesday’s report yield estimates are near unchanged at 53 bushels/acre and new crop ending stocks anticipated at 306 million bushels, down from 310 million last month.
SOYBEAN MEAL
The market is continuing last week’s weakness today, and September meal has fallen to a new one-month low. Bean oil, on the other hand, is stronger due to higher energy prices. So far, heavy processor maintenance downtime this month has not tightened meal supplies enough to support higher prices, and technical pressure remains a major issue. The September contract has only taken out the previous day’s high once in the last 11 sessions. Daily trading volume has been consistently below average over the last week as there is little market enthusiasm at this time.
CORN
The weekend forecast did not change dramatically enough to move corn prices significantly overnight following Friday’s late session pullback. Technicals are trying to turn higher but have yet to make a decisive bullish move. Strength in wheat this morning is a supportive factor, along with anticipation of slightly lower yield, US ending stocks, and world carryout in Wednesday’s August Supply and Demand report. The USDA will likely adjust EU crops lower, increase old crop exports, and reduce Black Sea region exports.
WHEAT
Wheat finished strong last week, and the market is continuing higher this morning. There was no slowdown in Black Sea region attacks over the weekend, and expectations of a slightly bullish USDA report on Wednesday continue to support the market. US ending stocks, world ending stocks, and most categories of wheat production for the US are expected to be lowered slightly, and that may keep a bid under the market early this week.
CATTLE
The cattle market rebounded late Friday but still ended the week closer to the lower end of last week’s range despite higher cash prices. The market may come under pressure after National Economic Council Director Kevin Hassett said overnight that beef prices are still too high and problematic for Americans, and there should be some good news on beef prices right around the corner. It’s not clear what the “good news” will be, but it sounds like the Administration is continuing to make efforts to push prices lower.
HOGS
The hog market had a poor performance last week despite the minor bounce on Friday. The near-term trend is lower, and open interest rose nearly 3,250 contracts on Friday. Cash hogs were $0.63 lower on Friday, but volume was light. Seasonal and technical pressure continues, and the path of least resistance looks lower. Animal stress will remain low this week as the northern half of the Plains and Midwest will enjoy much cooler temperatures than the southern areas.
MILK CLASS III
September Class III milk finished last week with a sizable loss after reaching a 4-week low on Thursday.
CRUDE OIL
September Crude Oil was higher early Monday as optimism over talks to reopen the Strait of Hormuz faded as Iran continued to insist that the US satisfy several demands before the waterway could reopen, including compensation for the attacks and an end to sanctions and military threats. This was after the market fell last week on hopes that Iran and Oman were close to reaching a deal that would result in a reopening of the strait of Hormuz.
NATURAL GAS
September Natural Gas gapped higher early Monday following a higher close on Friday that came after the market had fallen to another new low for the year earlier in the session. The market received some pressure late last week after the EIA report showed at 33 bcf injection versus a five-year average of +10 bcf. US production remains at a record high, with LSEG reporting average output in the US Lower 48 states at 110.7 billion cubic feet per day (bcfd) so far in August, matching July’s.
DOLLAR INDEX
The USD index steadied near 99.72 overnight, close to a two-month low following July’s payrolls data, which has prompted traders to cut September Fed‑hike odds to around 50% from roughly two‑thirds a week ago. That puts Wednesday’s CPI at the center of the week: consensus looks for 0.2% month‑on‑month core inflation and a modest easing in the annual rate to 2.5%, but a hotter print would quickly rebuild hike pricing and support the dollar.
PRECIOUS METALS
December gold contracts fell lower overnight but remain near their highest level since mid-June in the wake of July’s hiring report. Unresolved US-Iran tensions are still capping gold’s upside as the threat of higher energy prices and inflation are underpinning the dollar and higher Treasury yields despite a drop following Friday’s data.
Copper prices on the LME gained 0.5% to $14,150 following its strong performance last week as support from tight inventories outside the US and reduced supply fears underpin prices; COMEX prices are up 0.25% at $6.61. Total available copper stocks in LME warehouses are just over 101,00 metric tons to mark the lowest level since January, as flows to the US continue on worries of possible import tariffs.
EQUITIES
Equity index futures were mixed overnight after the S&P 500 closed at a fresh record on Friday. Resilient earnings and AI-led growth optimism have so far played a larger role in price action against unresolved Strait of Hormuz tensions ahead of US inflation data later this week. Iran says it is close to a shipping-lane arrangement with Oman, which could eventually ease energy flows and oil-led inflation pressure, but reopening remains conditional on additional US concessions and transit is still severely constrained. The earnings backdrop remains supportive, 85% of S&P 500 reporters have beaten expectations so far and JP Morgan has raised its year-end index target to 8,000.
INTEREST RATES
Yields edged higher across the curve in a tight range overnight as markets assessed developments regarding the Strait and awaited inflation data later in the week. A benign CPI could help ease fears about Fed Chair Warsh and the central bank being dovish, which should also help bring longer-end rates lower and flatten the curve.
COCOA
December Cocoa was lower early Monday but inside Friday’s range. At last week’s low the market managed to hold above the 0.618 retracement of the late July-early August rally at , which gives the bulls some hope. World Weather Inc. says “typical” early August weather continued in west-central Africa during the past few days, with periodic showers and thunderstorms and warm temperatures.
COFFEE
December Coffee was lower early Monday but inside Friday’s range. The market has been buoyed in recent weeks by slow exports out of Brazil due to heavy rains in June that lowered expectations for a bumper crop. Near term supplies continue to tighten, with ICE certified arabica stocks falling another 4,725 bags on Friday to 244,172, their lowest since late 2023. Stocks fell 20,007 bags last week.
COTTON
December Cotton extended its rally early Monday to reach its highest level since May 14, the day after it put in a contract high at 88.08. Hot weather and dry weather in the US Cotton Belt continue raise concerns about this year’s crop. The US dollar fell to its lowest level since June on Friday, which also lends support to cotton on ideas it improves US export prospects.
SUGAR
October Sugar was trading in the upper end of Friday’s big range higher early Monday and at time reached a new high for the move. UNICA last week showed steep declines in Brazil Center-South cane crush and sugar production for June. Cumulative sugar production for the 2026/27 marketing year, which began in April, fell to 12% behind year ago as of July 1 versus 2% behind on June 1.
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