Happy Father’s Day weekend market watchers!  

Here’s to all the dad’s out there feeding the world and growing your family in agriculture! In this part of the world, dads spend this holiday in the fields bringing in the harvest.  

And begun it has and finally in earnest!  After numerous rain delays and an irregularly wide range of maturity across wheat varieties and areas, combines are starting to move from Texas all the way to Kansas and all at the same time.  Test weights are holding above 60 pounds per bushel with yields and protein content varying greatly.  Overall, protein levels are lower than we’ve seen in the past several years with the range largely between 10.8 and 11.8 percent so far with higher protein levels limited to fields with higher nitrogen applied.  

There are plenty of tracks being made, literally, in the fields after recent heavy rains.  Fields that were grazed this winter naturally mature earlier and with firmer footing. While there are areas that received hail up to 70 percent, this year’s wheat crop looks to be decent in Oklahoma and Kansas.  

That’s why it was such a surprise that USDA’s update of the US winter wheat crop on Thursday came in below trade expectations.  For all wheat classes, trader’s expected for US wheat production to come in at 1.925 billion bushels versus the USDA leaving production unchanged from prior estimates at 1.921 billion bushels.  However, hard red winter wheat, that is now being harvested, came in at 782 million bushels, 2 million bushels below USDA’s previous estimates while trader’s were expecting an increase to 788 million bushels.  These updated production numbers still exceed last year’s HRW crop size of 770 million bushels, but are below last year’s all wheat production of 1.971 billion bushels.  Such figures were supportive for wheat as was the major selloff in the US dollar on Thursday, but wasn’t enough to hold the market together with lower daily lows on Thursday into Friday’s session following a week of price slippage after making new highs last Sunday evening.  

Upon closer inspection of the state-by-state production numbers, Kansas, the largest producing state in the US, increased 6.9 million bushels in this week’s report. That is a substantive month-on-month increase.  Oklahoma’s wheat crop was unchanged while the Texas crop was reduced by 2.3 million bushels. With wheat futures contracts making another daily low to begin the Friday session on Thursday evening beginning at 7 PM, the frustration for the bulls was mounting.  

And then came the announcement of Israel attacking Iran at around 7:45 PM.  This news triggered short covering that followed through the day session into Friday’s close just one penny off the high.  July KC wheat closed the week at $5.40 ¾, up 18 cents and just shy of the 50-day moving average, while July Chicago wheat closed at $5.43, up 16 ¼ cents, above its 50-day moving average.  Both contracts had huge outside, reversal higher days with lower lows, but much higher highs versus the previous session.  Minneapolis spring wheat had similar chart action with an outside reversal higher day closing 13.5 cents higher.  

Despite these large moves, soybeans led Friday’s charge with November new crop beans rallying 27 ¼ cents higher at $10.54.  While news earlier in the week of a potential deal with China lightly supportive soybeans, it was Friday’s EPA release of the 2026 and 2027 Renewable Fuel Standards that were the catalyst.  The data requires some interpretation given the requirements are now measured in RINs (Renewable Identification Numbers) instead of gallons, which requires a RIN per gallon conversion that varies based on feedstock used, but still the newly announced requirements over the next two years are higher than traders expected.  This was a significant headline for the oilseed complex and resulted in soybean oil trading limit up on Friday.  Canola futures also surged though closed well off the highs.  

The USDA left old crop and new crop US ending stocks for soybeans unchanged as they did for Brazil and Argentine production with a slight increase in global soybean ending stocks.  For corn, old crop and new crop US ending stocks were both cut more traders expected. Brazil and Argentine corn production was also left unchanged with a reduction in global ending stocks while traders were expecting an increase.  Despite the rally in soybeans and wheat, the corn market was relatively muted awaiting announcements of the 45Z biofuel tax credits for the energy industry.  

US corn and wheat conditions increased two percentage points over last week while soybeans improved by one percentage point. I have started to hear about more emergence issues with water logged soybeans, which we may see reflected in future conditions reports.  

The dramatic drop in the US dollar that is supportive of the commodity complex including grains, metals and energy was driven by this week’s updates of CPI and PPI for the month of May.  The Consumer Price Index for May increased by just 0.1 percent versus expectations for 0.3 percent, which put annual inflation at 2.4 percent versus expectations for 2.9 percent and only 0.4 percent from the Federal Reserve’s 2.0 percent inflation target.  The Producer Price Index also increased by just 0.1 percent in May versus expectations of 0.2 percent.  Such data points are what the Federal Reserve emphasizes as proof in the data that inflation is easing.  

Lower energy prices have been central to softening inflation, which was further complicated by the escalating Israel-Iran conflict.  When Israel bombed Iran overnight, crude oil surged 14 percent at its height of $77.62, closing Friday just above $73 per barrel.  Iran then bombed Israel on Friday afternoon US time before the stock market close.  The Dow finished Friday down 768 points while the S&P 500 was down 64.25 points.  This long-sought and fought hatred between these countries and religions and ideologies could just be getting started and erupt into a longer, broader conflict that keeps energy markets elevated while bringing more uncertainty to equities and consumers.  Stay tuned this weekend as there is likely to be more headlines made in this tit-for-tat dual.  

With this added uncertainty, what does this mean for the unphased and unwavering and untouchable cattle complex?  For a market that continues to make new highs, which it did again this past Tuesday, could this added uncertainty and time of year and ICE raids on a small cattle processor in Omaha mark a turning point?  If only one could know, but this is as prime a spot as any to either sell cattle ready to be sold or protect these phenomenal price levels out as far as you can.  USDA’s LRP, which I also offer, now goes out through May 2026 while CME futures contracts now trade out through August 2026. 

As expected and advised to clients on Thursday evening, the emerging Middle East conflict broke the cattle market lower on Friday and finished weak with August feeders down $5.20 and August fats down $4.725, creating a chart gap above.  Meanwhile, cash fed cattle traded to a high of $242 in Nebraska, at the low end of last week’s trade.  

USDA’s monthly Cattle-on-Feed report will be released next Friday, June 20^th. Note, markets will be closed on Thursday, June 19^th in observance of Juneteenth holiday. Markets will reopen that evening for the Friday session.  

Sidwell Strategies is the one-stop shop to protect cattle with futures, puts, LRP or a combination of all, which is probably the best strategy overall.  If you’re ready to trade commodity markets, give me a call at (580) 232-2272 or stop by my office to get your account set up and discuss risk management and marketing solutions to pursue your objectives.  Self-trading accounts are also available.  It is never too late to start and there is no operation too small to get a risk management and marketing plan in place.  

Wishing everyone a successful trading week!  Let us know if you'd like to join our daily market price and commentary text messages to stay informed!

Brady Sidwell is a Series 3 Licensed Commodity Futures Broker and Principal of Sidwell Strategies.  He can be reached at (580) 232-2272 or at [email protected].  Futures and Options trading involves the risk of loss and may not be suitable for all investors. Review full disclaimer at https://www.sidwellstrategies.com/fccp-disclaimer-21951.