Written Commentary
SOYBEANS
Beans had a strong finish to last week, but are pulling back this morning after the US and Iran exchanged weekend attacks but agreed to halt further attacks just before markets opened Sunday night. Weather is another reason for the pressure this morning, as the extended forecast for week 2 moderates the heat. While temperatures remain above normal, the hottest readings will shift to the Southwest US. Precipitation this week will be mainly limited to northern Iowa, Minnesota, eastern South Dakota, and North Dakota, and temperatures will be hot. Some crop stress pockets could appear in areas that have missed recent rainfall, but overall, the forecast is not seen as a major threat to the crop.
SOYBEAN MEAL
Soymeal has been moving sideways for the last 2 weeks, just above support at 300.00 for the August contract. Consumptive demand remains an underlying bullish factor, but rising crush paces in Brazil and Argentina have increased global competition. However, Argentine oilseed workers are negotiating a new contract, and a strike could be imminent, potentially reducing loadings in Argentina and extending the US export window. The pace of US meal sales yet to ship remains elevated, and processors will need to continue to entice farmers to sell beans to keep processing plants running at full throttle.
CORN
Corn opened near unchanged levels last night, but quickly dropped after the US and Iran agreed to end weekend attacks and resume talks. It was likely that a moderation of heat across the Midwest in week 2 in the overnight models added to pressure on corn prices.
WHEAT
There was a lower start for Chicago wheat this morning, while Kansas City is seeing slight gains. The market saw another lower daily low and lower high overnight for a sixth consecutive session as technicals remain weak.
CATTLE
The cattle complex closed lower on Friday despite late-day cash trade reaching 258-260 in the North and South, mostly steady with the prior week. The 5-area, 5-day weighted average for last week ended at 259.28, down from 259.44 the previous week. The cash trade did nothing to alleviate the fact that August futures remain at a major discount to cash. COT data showed Managed Money traders added slightly to their net long of just over 126,000 contracts, a five-week high. Feeder longs also increased to a five-week high.
HOGS
August hogs had a disappointing, unchanged close on Friday and near the lows of the day after strength early in the session. In the fall and winter contract months, however, hogs gapped higher after the friendly Hog and Pig data. Last week’s weekly slaughter was 1% lower than a year ago, a shift from higher slaughter rates recently.
MILK CLASS III
August Class III milk finished last week with a moderate loss after reaching a new contract low on Wednesday.
CRUDE OIL
August Crude Oil was slightly higher early Monday but remained inside Friday’s range after Iran and the US agreed to renew talks over the Strait of Hormuz and appeared to step back after exchanging fire over the weekend. Reports that Middle East producers are continuing to load oil and LNG also helped limit any gains.
NATURAL GAS
August Natural Gas was lower early Monday following a weak close on Friday after the market flirted with its May-June highs. The Midwest is experiencing its first true heat dome of the summer, but World Weather Inc. suggests it will not last past this week, as they expect the ridge will shift to the west over the weekend and allow waves of cooler (less hot!) air to across the Midwest next week, bringing some beneficial moisture and slightly cooler temperatures.
DOLLAR INDEX
The USD index slipped 0.13% to 101.23, alongside a drop in oil prices. The dollar is heading for its biggest monthly gain in nearly a year, broadly supported by growing expectations of rate hikes from the Fed and optimism over the US economy. Investors continue to monitor developments in the Gulf ahead of a key jobs report later this week. While some of the recent dollar strength can be attributed to expectations of Fed rate hikes, the performance of US assets, mainly the stock market, are very much in favor of the US, fueling demand for dollars.
COCOA
September Cocoa was lower early Monday, following through from Friday’s selloff from Thursday’s five-month high. West Africa has apparently seen enough rain recently to raise concerns about disease and flooding, but dry conditions emerged over the weekend. On Thursday, Ghanaian cocoa farmers were warning Reuters that production would fall sharply in 2026/27 as unusually heavy rains were destroying flowering crops and accelerating the spread of black pod disease. During the El Niño event of 2023/24, West Africa was hit by double its normal rainfall in the summer months, followed by intense heat and unseasonably dry, strong Harmattan winds the following winter.
COFFEE
September Coffee was lower early Monday following through from last week’s selloff from the seven-week high that the market put in on Wednesday. Cooxupe, Brazil’s largest coffee co-operative, had reported on Wednesday that its farmers had harvested 20.1% of their 2026 crop as of June 19 versus 24.3% at this point last year. They blamed unseasonal rains for slowing the harvest and problems with bean quality. However, World Weather Inc. said Brazil coffee areas should be drier than they have been, which should be beneficial to the harvest and to crop conditions.
COTTON
December Cotton was higher early Monday after falling to its lowest level since June 11 on Friday. The trade could grow cautious ahead of the USDA Acreage report on Tuesday. Last week’s US Drought Monitor showed an area representing roughly 58% of US cotton production was experiencing drought as of June 23, a substantial improvement from 76% the previous week and a peak of 98% from early May. A year ago 3% of cotton production was in an area experiencing drought. World Weather Inc. says West Texas still needs significant moisture, especially in the dryland areas of the southwest. Scattered showers and thunderstorms are possible this week, but rain amounts may be disappointing to many areas and beneficial to a few.
SUGAR
October Sugar was higher early Monday on follow through from a breakout rally on Friday. The market seems to be alerted to the fact that the extreme heat in Europe could damage their beet crop, as well as concerns about crops in key growing areas of India and Thailand as El Nino sets in. World Weather Inc. did say India’s rainfall is expected to slowly improve across the middle two-thirds of the nation during the coming ten days to two weeks. Sufficient rain will fall to saturate the soil and induce local flooding. Southern Thailand’s rainfall will continue to be limited for another week, but it may increase next week.
PRECIOUS METALS
August gold moved lower despite a drop in the dollar while oil prices rose. Recent strikes in the Gulf have reinforced expectations that the Fed will be moving higher on rates this year. Largely, gold prices are remaining under pressure as traders remain uncertain over the outlook of progress in US-Iran talks, while the recent flare up in strikes has renewed the risks that energy prices could rise again.
Copper prices slipped, with benchmark three-month copper on the London Metal Exchange down 0.2% to $13,335 and COMEX copper prices 1% lower to $6.09. A stronger dollar and hawkish-repricing in Fed policy expectations are the main pressures for metals and weigh on sentiment for traders.
EQUITIES
Equity index futures were higher overnight, with the geopolitical backdrop in the gulf easing from recent tension and ahead of a heavy macro calendar ahead. Washington and Tehran have agreed to halt strikes and expected to meet in Doha in the coming days to discuss implementation of the interim 14‑point peace memorandum, with a specific focus on managing traffic through the Strait of Hormuz and de‑escalating tensions.
INTEREST RATES
Yields inched higher at the front end and lower at the long end ahead of a data-heavy week for the US. Yields seem poised to maintain a tighter range ahead of upcoming data. Thursday’s PCE data reinforced expectations of Fed tightening and did little to change overall market odds on policy timing.
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