Written Commentary
SOYBEANS
After closing out last week on a strong note, the soy complex is pulling back this morning following good weekend rains across Illinois, Iowa, and Indiana. The forecast for this week and next is slightly less threatening than it was on Friday. Temperatures will be heating up this week across the Midwest, but are not expected to reach extreme levels. Moisture chances will continue in the northern half of the Midwest and the eastern belt, while the central and southern Plains are expected to dry down for the foreseeable future.
SOYBEAN MEAL
Soymeal prices bounced late last week, following soybeans higher, as a shift to a hotter weather pattern across the Midwest took hold. However, prices are giving back much of those gains as current weather models have moderated the expected adverse conditions. The latest Commitments of Traders report showed managed money traders holding a record net short position of 133,016 contracts
CORN
Prices are starting the week slightly lower after pushing into gap resistance on Friday. Current weather models continue to show a split pattern of precipitation over the next week, with heavy rain potential across the northern Midwest and lighter amounts expected in the eastern belt. The central and southern parts of the western belt are expected to experience the worst of the hot/dry conditions. Summer heat will be moving into the Midwest, but extreme levels are not expected.
WHEAT
The market is starting slightly higher this morning, boosted by reports that Bangladesh has signed an agreement to buy 700,000 tonnes of US wheat annually as trade talks with the country continue. Bangladesh is typically a buyer of Russian and Ukrainian wheat. US wheat prices are competitive, although Russian new crop supplies are now entering the market after a delayed start to harvest. Geopolitical risk remains very high with both Russia and Ukraine attempting to make gains ahead of Trump’s deadline. Russia kept its wheat export tax at zero this week. Romanian and Bulgarian wheat prices reached a one-month high late last week.
CATTLE
August live cattle and feeder cattle prices were mostly sideways last week, but the trend remains higher. The Commitments of Traders data showed money managers increased their net longs in cattle to a 3-week high and hit a new record high again in feeders.
HOGS
Hogs turned sharply higher last week after hitting retracement support. Open interest fell more than 6,600 contracts Friday and was down more than 15,000 contracts over the previous four sessions, indicating managed money longs were exiting. Commitments of Traders data showed that Managed Money traders had already reduced their net longs to a six-week low as of Tuesday last week.
MILK CLASS III
August Class III milk finished with a minimal weekly gain after falling to a contract low on Tuesday and Wednesday.
ENERGIES
September Crude Oil is slightly lower this morning. Traders are apparently doubting the potential effectiveness for the latest round of sanctions issued by the European union against Russian oil exports, as Russian has been able to circumvent previous attempts to block sales. However, other analysts think that the EU import ban on refined oil products processed from Russian oil in third countries could have some impact. Last week’s drone attacks on Kurdistan oilfield have slipped from the headlines. The Baker Hughes rig count showed US oil rigs in operation were down 2 last week to 422. This was down from 477 rigs a year ago and below the five-year average of 435.
September Natural Gas gapped lower overnight and fell to their lowest level since July 11 following a negative technical development this week and indications that producers are looking to boost output. The Baker Hughes rig count showed US natural gas rigs in operation up 9 to 117 last week. This was up from 103 rigs a year ago and above the five-year average of 113, and it was the biggest gas rig count since March 1, 2024. The NWS 6-10 and 8-14 forecasts for still call for above normal temperatures over most of the lower 48 states, with the exception of below normal expected in California, Nevada, Oregon, and Washington in the 6-10 day. This looks like the it will be the longest, hottest period so far this summer and should support cooling demand
DOLLAR INDEX
The USD index is lower as markets remain focused on trade deals coming out of the US. Markets also await economic data out of the US, which could offer a leading indication into the broader economic outlook. The dollar lost against the yen following the election in Japan.
COCOA
September Cocoa extended Friday’s recovery overnight and managed to close the gap from the lower open on Thursday. The market sold off on Thursday after European and Asian 2nd-quarter grind numbers came in sharply lower than year-ago levels, down 7.2% and 16.3%, respectively, but the market recovered on Friday after the North American grind was down only 2.8%.
COFFEE
With the US importing roughly a third of its coffee from Brazil, the threat of a 50% tariff on US imports from that country has cash market buyers reluctant to commit, especially given the uncertainty surrounding the implementation. This may be one reason that September Coffee has managed only a modest bounce off the lows from earlier this month. The tariff implications are mixed. It would likely raise prices for US consumers, but it would also leave Brazil looking for other buyers.
COTTON
December Cotton is lower this morning but is inside the range of the past five sessions, which is also near the upper end of the trading range of the past month. The US and global supply/demand setup for 2025/26 can be described as “ample,” with the US stocks/use ratio forecast at 32.4% versus a five-year average of 27.1% and the world ratio at 65.5% versus 65.95 on average. However, there is not much of a weather premium built into the market.
SUGAR
October Sugar sold off overnight, likely on disappointment that the market failed to close above the 50-day moving average on Friday after trading above that line for the first time since April earlier in the session. The market got a boost on Friday from a statement from the President Trump that Coca-Cola had agreed to use cane sugar in its beverages in the US, but the statement from the Coca-Cola was a little more nuanced, saying ”more details on new innovative offerings within our Coca-Cola product range will be shared soon.”
PRECIOUS METALS
Gold futures are higher on a weaker dollar as investors await any developments on the trade front as the August 1 deadline looms. US Commerce Secretary Howard Lutnick said on Sunday he was confident the US can secure a trade deal with the European Union, but that the August 1 deadline is a hard deadline for tariffs to kick in.
Silver futures are higher, building on recent gains as the dollar and Treasury yields fell. Additional support for silver came from China, where the industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment.
Copper futures are higher after China’s industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment.
EQUITIES
Stock index futures are higher ahead of a busy week of earnings and a relatively light week of economic data. Earnings results from the Magnificent Seven will kick off with Alphabet (Google) and Tesla on Wednesday. So far, earnings season has provided markets with a largely positive picture
INTEREST RATES
Futures are higher across the curve as markets continue to focus on trade developments and upcoming economic data.
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