POLICY  •  NEWS  •  MARKETS

AG POLICY & MARKETS DAILY

Wednesday, July 29, 2026

UPDATES: POLICY / NEWS / MARKETS

Corn Belt Rain Offers Timely Relief, But Weather Risk Far from Over

Improving Midwest weather outlook erases Tuesday’s bounce in row crops, while Russia’s export logjam keeps a bid under both wheat markets ahead of this afternoon’s Fed decision | Brent rebounds past $89 as Middle East fighting resumes | Brazil’s soybean price edge vanishes — now the only thing standing between China’s crushers and U.S. beans is a 10% tariff

Link: Clarifying: Rollins Heads to Douglas as USDA Prepares to Reopen Cattle Border

Link: Russian Terminals Limiting Grain Deliveries by Truck
Link: Fed Set to Hold Wednesday — But Warsh’s ‘Family Fight’ Will Steal the Show

Link: Sugar Faces Sour Challenges: A Sound Safety Net Undermined at the Border
Link: China Clears Soybean Reserves Ahead of U.S. Import Push
Link: Sugar’s Side Door Stays Open: Tariffs Reroute — but Don’t Stop — Over-Quota Imports

Link: Video: Wiesemeyer’s Perspectives, July 26
Video show is now on You Tube,Spotify & Apple
Link: Audio: Wiesemeyer’s Perspectives, July 26

TOP STORIES
 

— Brent rebounds past $89 as Middle East fighting resumes: Renewed attacks on U.S. forces and Saudi oil facilities restored the geopolitical risk premium as the unresolved Strait of Hormuz dispute continued to threaten global energy flows.

— Houthis weigh Red Sea transit fees to monetize maritime control: A proposed toll regime, potentially exempting Chinese vessels, could institutionalize Houthi control over Bab el-Mandeb and raise shipping, insurance and commodity freight costs.

— Oil rebound raises farm cost risks, with biofuels a partial offset: Higher crude prices threaten to lift diesel, fertilizer and transportation expenses, outweighing potential support for corn ethanol and soybean oil demand.

— USITC formally closes Chinese glyphosate case after farm backlash: Monsanto and Ruveon withdrew their trade petitions, averting potentially steep duties on Chinese glyphosate but leaving concerns about U.S. dependence on imports unresolved.
 

FINANCIAL MARKETS
 

— Equities today: Global stocks struggled following a sharp Asian technology selloff, while U.S. stock futures were mixed ahead of the Federal Reserve’s interest-rate decision.

— Equities yesterday: The Dow gained more than 500 points and the S&P 500 edged higher Tuesday, while the Nasdaq posted a modest decline.

— Fed rate cut case collapses as inflation and oil rekindle hike risk: The Fed is expected to hold rates steady, but stubborn inflation, low unemployment and surging energy prices have increased speculation about a possible rate hike.

— Mortgage rates hit nearly one-year high as housing demand weakens: The average 30-year mortgage rate climbed to 6.76%, contributing to another decline in home-purchase and refinancing applications.

— Canadian travel pullback remains a drag on U.S. tourism: Canadian visits have improved from weak year-earlier levels but remain sharply below 2024 totals, weighing on U.S. border communities and tourism-dependent businesses.
 

AG MARKETS
 

— Rain in the forecast trumps ratings slide as row crops retreat: Improving Midwest weather pressured corn and soybeans overnight, while Black Sea export disruptions continued supporting wheat futures.

— Wheat drifts as Black Sea premium fades, but Europe’s scorched corn crop rewrites the trade map: European harvest pressure weighed on wheat, while severe corn losses left EU prices far above Chicago and strengthened opportunities for U.S. exports.

— Brazil’s soybean price edge vanishes as China’s tariff becomes the final hurdle: Brazilian export prices are now comparable with or above U.S. offers, positioning U.S. soybeans for stronger Chinese commercial demand if Beijing removes its 10% tariff.

— Indonesia raises biodiesel allocation as B50 boosts palm oil demand: Higher domestic biodiesel consumption is expected to reduce Indonesia’s palm oil export surplus and provide indirect support for soybean oil and other competing vegetable oils.

— Ag markets Tuesday, July 28: Bulls answer the bell as grains and cattle rebound: Falling crop ratings and a measured reopening of Mexican cattle trade helped grain and livestock futures recover from Monday’s sharp losses.
 

FARM POLICY
 

— Boozman now targets Aug. 6 farm bill markup as vote math tightens: Senate Agriculture Chairman John Boozman (R-Ark.) needs Democratic support to advance the bill as Sen. Mitch McConnell’s (R-Ky.) absence and disagreements over SNAP complicate the committee vote.
 

WETLANDS
 

— USDA locks in post-1990 wetland determinations: A new interim rule allows farmers to rely on properly certified older wetland maps, reducing program uncertainty but potentially inviting another environmental lawsuit.
 

ENERGY MARKETS & POLICY
 

— Tuesday: Oil retreats as Hormuz diplomacy reopens path to de-escalation: Crude prices fell sharply as an Omani navigation proposal raised hopes for restoring Hormuz traffic, although threats to Saudi infrastructure and Red Sea shipping remained.
 

WEATHER
 

— NWS outlook warns of storms, flooding and expanding dangerous heat: Severe thunderstorms and flash flooding threaten the Southeast, Plains, Upper Midwest, Northeast and western monsoon region as extreme heat spreads across the southern and western U.S.

— Corn Belt rain offers timely relief, but weather risk is far from over: Widespread weekend rainfall should improve crop moisture, but Missouri, the Plains and Mid-South remain vulnerable to uneven precipitation and renewed August heat.
 

— Brent rebounds past $89 as Middle East fighting resumesAttacks on U.S. forces and Saudi oil sites restore the supply-risk premium Brent crude surged more than 6% to just above $89.50 per barrel Wednesday, snapping a three-session slide as renewed military exchanges shattered the market’s brief assumption that the U.S./Iran conflict was moving back toward diplomacy. West Texas Intermediate also climbed more than 6% at just above $84. The rally was driven primarily by geopolitical risk rather than evidence that significant oil production had already been lost. U.S. and Saudi forces struck Iran-backed groups in Iraq after drones targeted Saudi oil facilities, while U.S. air defenses intercepted an Iranian missile attack aimed at American positions in the region. Jordan said it destroyed five Iranian missiles, and Iran’s Revolutionary Guard acknowledged targeting U.S. military installations there. The widening Saudi role is particularly important. Riyadh’s public participation in joint strikes with Washington marked its first declared combat action alongside the U.S. during the current war. That raises the risk of retaliation against Saudi Arabia’s oil production, processing and export network — infrastructure that is far more consequential to global supplies than most militia targets in Iraq. Saudi Arabia said it intercepted drones launched from Iraq toward oil facilities for a second consecutive day. Satellite imagery published by the Associated Press showed smoke rising from the Abqaiq processing complex earlier in the week, although the extent of any production disruption remains uncertain. Iraqi militias denied responsibility, adding another layer of uncertainty over whether the attacks were directed by Tehran, carried out by Iraqi groups or linked to Yemen’s Houthis. The more durable bullish factor remains the Strait of Hormuz. Tehran rejected Oman’s plan for joint regional management of the waterway, calling a 50-50 arrangement unacceptable. Iran instead wants sole control of the inbound shipping route and partial control of outbound traffic — a position fundamentally at odds with the U.S. demand for unrestricted passage. Only a few commodity vessels have moved through Hormuz this week, indicating that the physical-flow problem has not been resolved even during periods when the shooting subsides. That diplomatic setback may be more important for oil prices than the latest missile exchange. Military attacks can pause quickly, as they did last week, but the disagreement over who controls Hormuz is structural. The strait normally carries roughly one-fifth of global oil supplies, and Iran increasingly views formal control of the shipping corridor as a central war objective rather than a temporary bargaining tactic. Iran also claimed Wednesday that it struck and stopped three tankers attempting to use what Tehran described as an unauthorized route through the strait. There was no immediate independent confirmation of those attacks, but even unverified claims can deter shipowners, raise insurance costs and keep vessels anchored rather than risk a transit. U.S. inventory data provided additional support but were not uniformly bullish. American Petroleum Institute figures showed crude stocks falling about 3.3 million barrels during the week ended July 24. However, gasoline inventories increased by 918,000 barrels and distillate supplies rose by 355,000 barrels. That combination suggests tighter crude availability but less convincing evidence of strong end-user fuel demand. Official Energy Information Administration data were scheduled for release Wednesday morning. Market analysis: Wednesday’s move largely restored a risk premium that traders had stripped out during the preceding three sessions. Brent briefly exceeded $100 last week before falling into the low-to-mid-$80s as President Donald Trump suspended U.S. strikes and again emphasized negotiations. The violent reversal illustrates why the market is trading headlines rather than a stable supply-and-demand outlook. The emerging trading range appears exceptionally wide. DBS Bank said Brent could swing between $80 and $100 in the near term, with the unresolved Hormuz blockade establishing a higher floor even during periods of de-escalation. Prices could again challenge $100 if verified damage reduces Saudi production, tanker traffic deteriorates further or the U.S. and Iran resume direct, sustained attacks. Conversely, Wednesday’s gain could unwind rapidly if Saudi facilities remain operational, tanker traffic begins recovering or Oman revives negotiations. Record U.S. production, previous emergency-reserve releases and weaker Chinese crude demand have so far prevented the loss of Hormuz traffic from producing the $150-to-$200 prices some analysts feared when the war began. Ag sector impact: The immediate effect is higher operating cost risk, but the impact is uneven: grain and livestock producers are exposed, while biofuel-linked commodities could gain support. See next item for more on ag impacts. Upshot: For now, the critical signal is not merely that fighting resumed, but that attacks are moving closer to the infrastructure and shipping routes that determine whether Gulf oil reaches world markets. Until the Hormuz dispute is separated from the broader U.S./Iran conflict, each pause in hostilities is likely to remain provisional — and each renewed attack capable of producing another abrupt oil-price spike.— Houthis weigh Red Sea transit fees to monetize maritime controlChina carve-out would turn a security threat into a two-tier toll regime Yemen’s Iran-aligned Houthi movement is considering converting its military leverage over the Bab el-Mandeb Strait into a revenue-producing transit system, potentially charging most commercial vessels while exempting Chinese shipping.   Reuters reported that no timetable has been established, and the Houthis have not publicly confirmed the proposal. However, regional sources said Iranian officials discussed the concept with Houthi representatives in Tehran and that Iranian advisers subsequently traveled to Yemen to help establish a potential authority to administer the charges. The stated objectives would be to normalize fees on international waterways and increase pressure on the U.S.The proposal goes beyond another temporary blockade. A toll system could allow the Houthis to calibrate pressure — threatening vessels that refuse to pay, offering negotiated passage to others and granting preferential treatment to strategic partners — while keeping enough commerce moving to avoid provoking a unified international military response. There may also be a substantial financial incentive. A 2024 United Nations Panel of Experts report cited allegations that the Houthis had received as much as $180 million per month in unofficial safe-passage payments during the earlier Red Sea shipping crisis, although the panel could not independently verify the estimate. A formalized collection authority would give an administrative veneer to what shipping companies and Western governments would almost certainly regard as coercive payments.  The legal basis would be weak. The Bab el-Mandeb is a strait used for international navigation, and the United Nations Convention on the Law of the Sea says states bordering such straits must not hamper or suspend transit passage. The Houthis also are not Yemen’s internationally recognized government. A selectively enforced charge that exempts Chinese ships would therefore be difficult to defend as a legitimate navigational or service fee rather than maritime extortion. For shipowners, the amount of any fee may be less important than the uncertainty it creates. Paying could expose companies, banks and insurers to sanctions, compliance and reputational risks. Refusing could leave a vessel vulnerable to drones, missiles, seizure or harassment. That dilemma would probably drive additional carriers to avoid the southern Red Sea altogether or impose higher war-risk and security surcharges. The alternatives are expensive. Reuters calculated that rerouting a tanker carrying Saudi crude from Yanbu to Asia north through the Suez Canal and then around southern Africa could add roughly 10,000 nautical miles and 34 days to the voyage. Additional freight costs could exceed $5 million per vessel, excluding fuel and insurance, with another roughly $1 million required for Suez Canal transit. Of note: The threat is particularly important because Saudi Arabia has been using its East-West pipeline and the Red Sea port of Yanbu to reduce dependence on the Strait of Hormuz. A Houthi-controlled toll regime at Bab el-Mandeb would place pressure on the principal alternative route just as Hormuz traffic remains severely constrained. Bab el-Mandeb was already carrying far less energy trade than before the first round of Houthi attacks. The U.S. Energy Information Administration estimated that oil flows through the strait averaged 4.2 million barrels per day during the first half of 2025, down from 9.3 million barrels per day in 2023. LNG flows through the strait were near zero during 2024 and the first half of 2025 as vessels diverted because of security and insurance concerns. China’s proposed exemption is strategically significant. Beijing has directly negotiated with the Houthis and reportedly has been clearing individual tankers for passage. At least four tankers carrying Saudi crude to China transited Bab el-Mandeb after the Houthis announced their July 20 blockade, according to shipping data cited by Reuters. Preferential passage would create a two-tier maritime system in which Chinese-linked vessels receive lower costs and reduced security risks while U.S., European and Saudi-linked shipping faces additional charges or attack. It could also encourage complicated efforts to obscure vessel ownership, cargo destinations and recent port calls, making accidental or disputed targeting more likely. For the U.S., the plan presents an uncomfortable choice. Accepting the fees could establish a precedent under which an armed non-state group taxes an international trade route and uses the proceeds to expand its military and political power. Preventing collections through naval escorts or military action, however, would require a sustained commitment and could broaden the conflict with Iran and its regional allies. Reuters reported that Gulf and European governments would strongly oppose the plan but that international naval forces are already stretched and unable to guarantee protection for merchant traffic. The agricultural effects would be mostly indirect but potentially significant. Higher oil, marine-fuel, insurance and freight costs would filter into diesel, fertilizer, chemicals and containerized agricultural trade. U.S. grain exporters could gain a freight advantage in some markets if competing supplies face greater disruption, but the more immediate farm-level effect would likely come through higher input costs and renewed inflationary pressure. Bottom line: the Houthi proposal should therefore be viewed less as a conventional port charge than as an effort to institutionalize maritime coercion. A blockade can be challenged or negotiated away; a functioning fee authority would seek to make Houthi influence over the Red Sea permanent, profitable and politically harder to reverse.— Oil rebound raises farm cost risks, with biofuels a partial offsetDiesel and fertilizer pressures outweigh gains for corn and soybean oil The renewed Middle East fighting is a net negative for most U.S. farmers, particularly if Brent remains above $85 per barrel or tanker traffic through the Strait of Hormuz continues to be restricted. Higher oil prices will not immediately change the economics of crops already in the ground, but a prolonged disruption would raise harvesting, transportation and 2027 input costs while threatening already-narrow crop margins. Diesel is the most immediate exposure. The U.S. average retail diesel price was already about $5.32 per gallon on July 27, according to an Energy Information Administration (EIA) price snapshot. Crude oil historically accounts for about 51% of the retail price of diesel, meaning a sustained crude rally eventually moves through to farm fuel, trucking and rail costs. The timing is unfavorable because diesel demand will rise as farmers begin fall harvest, grain hauling and fieldwork. The impact will be especially significant for operations that use substantial fuel for irrigation, grain drying, tillage and long-distance hauling. Livestock producers also face higher costs for feed delivery, milk collection, refrigerated transportation and moving animals to processors. Elevators, processors and exporters generally attempt to pass increased freight expenses back through weaker local basis levels or forward through higher food prices. Fertilizer may be the larger longer-term risk. Roughly one-third of globally traded fertilizer passes through the Strait of Hormuz, while energy can represent as much as 70% of fertilizer production costs. Nitrogen products such as urea are particularly exposed because major production and export facilities are located in the Middle East. U.S. production provides some protection, but domestic fertilizer markets remain connected to global prices and import availability. That makes corn and wheat producers more vulnerable than soybean growers. Fertilizer accounts for nearly 45% of operating expenses for U.S. corn and wheat farms, compared with about 23% for soybeans. A prolonged Hormuz disruption could therefore widen the cost disadvantage of nitrogen-intensive crops and influence 2027 acreage decisions, potentially encouraging some producers to shift acres toward soybeans or other crops requiring less nitrogen. The oil rally does offer a partial commodity-price hedge through biofuels. Higher gasoline prices can improve ethanol’s relative value as a blending component, potentially supporting ethanol margins and corn demand. Most U.S. gasoline contains about 10% ethanol, and USDA research has found a significant connection between gasoline, ethanol and corn markets. Soybean oil could receive similar support from higher petroleum diesel prices because soybean oil is a major feedstock for biodiesel and renewable diesel. Soybean oil has accounted for more than 40% of U.S. biomass-based diesel feedstocks in recent years. Stronger soybean oil values could improve crush margins and soybean demand, although increased crushing could also expand soybean meal supplies and partially restrain meal prices. Those biofuel benefits should not be overstated. Ethanol and renewable diesel demand are heavily shaped by federal blending requirements, tax credits and compliance-credit prices, not simply by crude oil. High gasoline prices can also reduce driving and total fuel consumption, limiting the amount of ethanol blended into the gasoline pool. Livestock generally comes out worse. Higher corn and soybean prices would increase feed costs, while expensive diesel raises transportation and processing expenses. Cattle producers may be somewhat better positioned because tight animal supplies support prices, but hog, poultry and dairy operations typically have less ability to absorb simultaneous increases in feed, energy and freight costs. The macroeconomic effects could compound the farm level squeeze. Sustained high oil prices would add to inflation, potentially keeping interest rates elevated and increasing machinery, operating-loan and land-financing costs. A stronger inflation-driven dollar could also make U.S. grain, meat and dairy products less competitive abroad. USDA was already forecasting inflation-adjusted net farm income to decline 2.6% in 2026, while total production expenses were projected at $477.7 billion, up 1% in nominal terms. Those estimates were made before the full effect of the latest escalation was known, leaving fuel and fertilizer as upside risks to expenses. Bottom line: A brief oil spike would mostly create market volatility. A sustained period of $85-to-$100 Brent, continued Hormuz restrictions or verified damage to Saudi energy infrastructure would become a meaningful farm-income event. Corn and soybean oil could gain some support from biofuels, but for most producers, higher diesel, fertilizer, freight and financing expenses would outweigh the commodity price benefit.— USITC formally closes Chinese glyphosate case after farm backlashWithdrawal averts a tariff shock but leaves U.S. supply concerns unresolved The U.S. International Trade Commission (USITC) has formally terminated its preliminary antidumping and countervailing duty investigations into glyphosate imports from China, completing the unusually rapid collapse of a trade case that generated intense opposition from U.S. farm organizations. The Federal Register notice (link), published Wednesday, confirms that Monsanto Co. and its wholly owned subsidiary Ruveon LLC withdrew their petitions from both the USITC and the Department of Commerce on July 17. The petitions had been filed June 30, meaning the case lasted only 17 days. The withdrawal canceled a July 21 USITC staff conference and eliminated the need for the commission to make its preliminary injury determination by Aug. 14. Importantly, the termination is procedural rather than a decision on the merits. The USITC did not reject Monsanto’s allegations, determine that Chinese glyphosate was fairly traded or conclude that the domestic industry had not been injured. The petitioners withdrew before either Commerce or the USITC could make substantive preliminary findings. The original petitions alleged that Chinese glyphosate was being sold in the U.S. at less than fair value and benefiting from Chinese government subsidies. Monsanto and Ruveon estimated potential dumping margins ranging from 68.9% to 446.47%. Duties approaching even the lower end of that range could have significantly altered the price and availability of generic glyphosate in the U.S. market. That prospect produced an immediate backlash from the National Corn Growers Association, American Soybean Association, National Association of Wheat Growers and other commodity organizations. The groups argued that duties would restrict competition and increase the cost of one of the most widely used crop-protection products at a time when grain and oilseed producers are struggling with weak margins and persistently high production expenses. For farmers, the immediate result is that no new glyphosate-specific antidumping or countervailing duties will emerge from this case. Chinese generic products can continue competing under the existing tariff structure, preserving an important price check on domestically produced Roundup and other glyphosate formulations. That does not guarantee lower glyphosate prices. Ruveon said pricing commitments it had offered after filing the petitions — including a proposed pricing model tied to production costs and its recent three-year average — were contingent on obtaining trade relief and will not be implemented. Instead, the company will continue what it calls “dynamic pricing,” based partly on generic glyphosate prices in the marketplace. The episode therefore represents a clear victory for market competition rather than a formal price cap. As long as generic supplies remain plentiful, competition should restrain major upward price moves. But energy costs, Chinese production decisions, shipping disruptions, broader tariffs or a sudden tightening of inventories could still push prices higher. The underlying supply-security issue also remains unresolved. Bayer-owned Ruveon is the only U.S. manufacturer of glyphosate and reportedly accounts for roughly 60% of glyphosate sold domestically, while Chinese producers supply much of the remaining market. Bayer argued when filing the petitions that the domestic glyphosate business was not sustainable under current competitive conditions. That creates a difficult policy tradeoff. Duties could improve the economics of maintaining domestic manufacturing capacity, but they would also reduce competition and transfer much of the cost to farmers. Keeping imports open supports lower input prices, but it leaves the U.S. agricultural sector exposed to Chinese production interruptions, geopolitical tensions and future trade restrictions. Of note: Politically, the rapid withdrawal demonstrates that farm organizations can influence a trade-remedy case before the federal agencies reach the decision stage. The unusually unified opposition made it difficult for Bayer and Ruveon to portray the petitions as protecting American agriculture when many of their principal customers believed the action would harm them. The outcome may also affect future input sector cases. Farm organizations repeatedly compared the glyphosate petition with trade actions involving phosphate fertilizer and 2,4-D, arguing that trade remedies sought by concentrated input industries can raise costs for producers without adequately accounting for the effect on agricultural customers. The glyphosate reversal gives commodity groups a successful model for responding quickly and collectively to similar petitions. Still, the Federal Register notice does not permanently close the issue. Monsanto or Ruveon could submit a new petition if market conditions change and additional evidence is developed. Federal law also allows Commerce to initiate antidumping investigations on its own when available information indicates a formal investigation is warranted, although most cases originate with domestic-industry petitions. Bottom line: The USITC notice formally removes the near-term threat of potentially steep duties on Chinese glyphosate and protects farmers from another immediate source of input-cost inflation. But the short-lived case exposed a larger unresolved conflict between affordable farm inputs and maintaining domestic agricultural-chemical production. That tension is likely to return whenever Chinese prices fall sharply, U.S. production is threatened or Washington takes broader trade action against Beijing.

— Equities today: Global shares struggled to push higher after a punishing sell-off in Asia, where unease over AI valuations has frayed nerves. Wall Street futures were mixed, with Dow futures pointed lower, after the Dow and S&P 500 indexes ended higher on Tuesday.

In Asia, Japan -1.5%. Hong Kong +2%. China +0.4%. India +1.2%.
 

In Europe, at midday, London +0.2%. Paris -0.5%. Frankfurt -0.2%.

— Equities yesterday: 

— Fed rate cut case collapses as inflation and oil rekindle hike risk

Fed expected to hold rates, but markets see a growing chance of an increase

The Federal Reserve is expected to hold its benchmark rate at 3.5% to 3.75% on Wednesday as persistent inflation, low unemployment and surging oil prices weaken the argument for monetary easing. Link to our preview report out earlier this morning. 

The Fed’s preferred measure of underlying inflation has risen 3.4% over the past year, well above its 2% target, while unemployment remains relatively low at 4.2%. Renewed Middle East fighting has pushed energy prices sharply higher, and President Donald Trump’s latest tariffs threaten additional supply-chain costs and inflation pressure.

Those risks have driven the two-year Treasury yield above 4.3% and prompted markets to assign roughly a one-in-three chance to a rate increase. The decision will also test new Fed Chair Kevin Warsh’s leadership style. Unlike previous chairs, Warsh has offered little forward guidance, leaving investors uncertain about both his policy preference and his ability to build consensus on a divided committee.

— Mortgage rates hit nearly one-year high as housing demand weakens

Inflation fears push 30-year rate to 6.76%, driving applications lower

The average U.S. contract rate for a 30-year fixed mortgage rose 7 basis points to 6.76% in the week ended July 24, its highest level since August 2025, according to the Mortgage Bankers Association.

The increase followed a rise in Treasury yields as persistent inflation concerns reduced expectations for lower borrowing costs. Mortgage rates have climbed nearly 70 basis points since the U.S. and Israel launched strikes against Iran in late February, with higher oil prices adding to inflation pressures and reinforcing expectations that the Federal Reserve will keep rates elevated.

The impact on housing demand is becoming more pronounced. Total mortgage applications fell 6.4% from the prior week, including a 3.6% decline in purchase applications and a 9.9% drop in refinancing activity. With affordability already strained by high home prices, the renewed rise in rates threatens to further slow sales and keep homeowners locked into existing low-rate mortgages.

— Canadian travel pullback remains a drag on U.S. tourism

Recent gains reflect weak comparisons, not a full recovery

Canadian travel to the United States is beginning to improve from last year’s depressed levels, but the market remains far below normal.

Statistics Canada reports Canadian-resident return trips from the U.S. fell 25.4% in 2025, the steepest non-pandemic decline since electronic records began in 1972. The drop reflected more than reduced travel: Canadians redirected spending toward domestic destinations, Europe and Asia.

Visits to the U.S. fell by 7.1 million in 2025, while domestic trips increased by 5 million and overseas visits rose by 1.3 million. Canadian spending in the U.S. declined C$3.3 billion to C$18.8 billion, while domestic and overseas tourism spending increased.

Leisure travel accounted for most of the decline. Canadian vacation trips to the U.S. fell 21.5%, while visits to friends and relatives declined only 9%, suggesting discretionary trips were easier to replace.

Trips increased year over year in April, May and June 2026, but those gains came against weak 2025 comparisons. June travel remained 28.7% below June 2024, including declines of 29.6% for automobile trips and 25% for air travel.

Political tensions, tariff uncertainty and a weaker Canadian dollar all contributed. But the shift may prove lasting because Canadian travelers have developed new destinations and spending habits.

The impact extends beyond hotels and airlines. Reduced Canadian tourism also lowers demand at U.S. restaurants, retailers and food businesses, particularly in border states and major snowbird destinations.

Bottom line: Canadian travel to the U.S. may have stopped deteriorating, but it has not meaningfully recovered. Rebuilding the market will require improved bilateral relations, greater economic confidence and renewed willingness among Canadians to choose U.S. destinations.

— Rain in the forecast trumps ratings slide: corn, beans back down overnight as wheat extends Black Sea-fueled gains

Improving Midwest weather outlook erases Tuesday’s bounce in row crops, while Russia’s export logjam keeps a bid under both wheat markets ahead of this afternoon’s Fed decision

Grain futures split along a familiar fault line overnight Wednesday: weather pressure on the row crops, supply anxiety in wheat. September corn eased 3 1/4 cents to $4.55 1/4, August soybeans dropped 13 1/2 cents to $11.98 1/2 — back below the $12 mark — while September SRW wheat added 3 cents to $6.65 1/2 and September HRW gained 4 1/2 cents to $7.30 3/4. August soymeal slipped $2.90 to $317.40, with August soyoil essentially flat at 70.80 cents, up 4 points.

• Corn: ratings shock fades fast. Monday’s crop condition report should have been more supportive than it has proven to be. USDA cut the corn rating four points to 63% good/excellent — one of the largest weekly July declines on record, with South Dakota tumbling to 50% — and the market managed only a modest Tuesday bounce before overnight selling resumed. The explanation is on the weather maps, not in the rearview mirror: forecasts call for widespread rains across the Midwest this week and moderating temperatures into early August, precisely the “wetter and milder” finish the crop needs after the western Belt’s heat stress. With silking running ahead of the five-year pace at 78%, traders are betting the condition low is in. That leaves September corn drifting back toward last week’s lows, and it will likely take a forecast flip — or a demand surprise — to change the tone.

• Soybeans: August weather is everything. Beans led the overnight retreat, and the logic is the same but amplified — August, not July, makes the soybean crop. Ratings fell three points to 63% good/excellent Monday, but pod-setting at 47% is well ahead of average, and improving early-August forecasts land squarely in the crop’s key yield-determination window. Demand is doing little to cushion the weather trade: export inspections remain sluggish, and while USDA has confirmed fresh sales this week — including 126,000 tonnes to unknown destinations and 132,000 tonnes to China — those are routine volumes, not the kind of sustained Chinese program bulls have been waiting on. Brazil’s relentless crush expansion and record projected meal exports keep a lid on the product markets, evident in meal’s inability to hold above $320.

• Wheat: Russia’s problem is Kansas City’s gain. Wheat remains the bull story of the summer, and overnight strength in both classes shows the Black Sea premium is still being built. Russia’s closure of the Kerch Strait following Ukrainian drone strikes has severed a corridor that normally handles roughly a quarter of its grain exports; July Russian wheat shipments are projected at just 1.5 million tonnes, the weakest for the month since 2017 and about half the recent average. Russia’s remaining deep-water capacity of 4-4.5 million tonnes a month falls well short of the 5-6.5 million tonnes typically needed during the August-October export peak — a structural shortfall, not a one-week disruption. Add downgraded EU yield prospects after severe heat, and HRW’s outperformance of corn makes sense even with U.S. winter wheat harvest 81% complete and spring wheat ratings beating expectations at 53% good/excellent.

•The wider lens. Today’s wildcard is macro: the FOMC wraps up its two-day meeting with a decision due at 2 p.m. ET, and position-squaring ahead of the announcement likely exaggerated the overnight moves. The bigger-picture tension is worth watching — a corn market trying to decide whether one of the sharpest July condition drops on record matters more than a friendly two-week forecast, and a wheat market where the supply-side risk sits offshore and won’t be fixed by rain. If the promised Midwest rains disappoint, the corn and bean ratings slide suddenly gets repriced in a hurry; if they verify, $4.50 corn and $11.75 beans come into view.

— Wheat drifts as Black Sea premium fades — but Europe’s scorched corn crop rewrites the trade map

Paris corn now commands $2.55/bu over Chicago; Russian wheat at $6.37/bu is the world’s cheapest, yet buyers aren’t chasing

•Paris wheat eases as harvest pressure deflates the Black Sea risk premium. September milling wheat futures on Euronext slipped €1.00/MT to €226.75 — roughly $258.50/MT or $7.04/bu at the current euro rate near $1.14. The one-euro decline is worth about 3 cents/bu. The pullback extends the drift from mid-July, when French FOB values hit a record €219.25/MT ($250.40) on July 14 amid the twin shocks of Ukrainian strikes on Russian tankers — which briefly halted Don River/Sea of Azov loadings, a chokepoint handling roughly a quarter of Russian wheat exports — and the summer heatwave that pushed the EU+UK wheat estimate down to 140.8 MMT from 143.7 MMT. With France’s harvest running far ahead of normal pace and the Azov premium fading, the market is giving some of that back. Still, Paris wheat holds a premium of about $15/MT (roughly 40 cents/bu) over CBOT September SRW (~$6.62/bu equivalent), and remains nearly €20 above its late-May lows around €207.50 — the heatwave-reduced EU crop is providing a floor.

• Paris corn tells the more dramatic story. August corn fell €1.00/MT to €247.50 — about $282.15/MT or a striking $7.17/bu equivalent, some $2.55/bu above CBOT September corn (~$4.59/bu). European corn trading at a premium to European wheat is a historical oddity that quantifies the heat damage: EU maize output is pegged at 52.7 MMT, the smallest since 2007, with the French crop — normally the EU’s largest at 13.8 MMT last year — seen at 9.4 MMT or less, with some analysts flagging sub-8 MMT, potentially the worst since 1976. The EU will need heavier corn imports into 2027, and feed-wheat substitution demand should cushion wheat’s downside. For U.S. exporters, the arithmetic is compelling: U.S. corn at a $100+/MT discount to European values keeps U.S. origin firmly competitive into Atlantic and Mediterranean destinations.

• Russian wheat: cheap, but buyers aren’t chasing. Russian 12.5%-protein FOB offers are around $234/MT for August shipment — about $6.37/bu, the cheapest major-origin milling wheat and roughly $24/MT under French equivalents. That’s down from $242-244 in early June, and the “sliding export interest” is notable on both sides: importers are comfortable waiting as Northern Hemisphere harvest supplies build, while Russian farmer selling is sluggish. The strong ruble has squeezed exporter margins (SovEcon notes Russian wheat now trades at parity with Romanian rather than its customary discount), and diesel costs — up as much as 90% in places following Ukrainian drone strikes on refining infrastructure — plus May’s cold, wet planting delays complicate the logistics picture even with the export duty at zero. The crop itself remains big: SovEcon has raised its 2026 estimate to 89.7 MMT and said it could top 90 MMT, against a 2026-27 export forecast in the 42-46 MMT range. Bottom line: Russia has the wheat and needs the export revenue; once farmer selling loosens, $234 likely marks the ceiling more than the floor for Black Sea values into fall. Link to our special report on Black Sea grain and Russia released earlier today.

• Palm oil rebounds. Benchmark October CPO on Bursa Malaysia rose 22 ringgit to close at 4,664 RM/MT — about $1,140/MT, or 51.7 cents/lb at 4.09 ringgit per dollar. The bounce snapped a two-session slide driven by weaker crude and soybean oil; steady export demand and firm Indonesian domestic values (the KPBN tender bid up 0.7%) limited the earlier losses and helped the market recover. Palm remains historically expensive — vegoil quotes are running well above year-ago levels in the heatwave’s wake — and its direction near-term stays hostage to energy markets and Dalian/CBOT soyoil.

•The macro backdrop: the euro near $1.14 keeps translating MATIF weakness into still-firm dollar equivalents, and traders are squaring positions ahead of today’s FOMC announcement, which will steer the dollar — and with it, relative export competitiveness — into August.

— Brazil’s soybean price edge vanishes — now the only thing standing between China’s crushers and U.S. beans is a 10% tariff

With Paranaguá offers now on par with the Gulf and above the PNW, the economics finally favor U.S. origin — if Beijing follows through on lifting the duty for arrivals after Oct. 1.

Brazil’s seasonal price advantage has run its course. With the bulk of Brazil’s record 2025/26 harvest — estimated near 178-180 MMT — already marketed, Paranaguá export premiums have firmed to the point that Brazilian FOB offers are now on par with U.S. Gulf values and above the PNW. That’s a sharp reversal from mid-July, when Brazilian offers still undercut the Gulf by 80 cents to $1.00 per bushel, and it mirrors the late-2025 pattern, when Paranaguá quotes climbed above the Gulf as Brazilian supplies tightened into year-end.

The price argument for staying out of the U.S. market is gone. What remains is China’s 10% retaliatory tariff — and it has done exactly what a 10% wedge does. Every ton of the U.S. beans that arrived in China through May was booked by Beijing-headquartered state firms (Sinograin and Cofco), which completed the 12-MMT purchase commitment and have since added new-crop cargoes, including a 472,000-MT daily sale in early July, the largest since November 2025. Commercial crushers — the price-sensitive buyers who normally spread purchases across coastal provinces — have stayed on the sidelines because even near price parity at the ports, a 10% duty makes the CFR China math unworkable.

Upshot: That last hurdle may be about to fall. Under the reciprocal framework, Washington drops its 10% fentanyl-related tariff and Beijing removes its 10% duty on U.S. ag goods, with the working plan to have it lifted for products arriving after Oct. 1 — precisely the new-crop window when the U.S. is seasonally the world’s cheapest supplier. The PNW angle matters most: with Brazil priced above Pacific Northwest offers and PNW’s freight/transit advantage to China, commercial crushers would have a clear incentive to book U.S. beans the moment the duty clears. If the tariff comes off on schedule, watch for the first genuinely commercial (non-state) Chinese purchases of U.S. new-crop — the clearest signal yet that the 25-MMT-per-year framework through 2028 can be met with market-driven, not just political, demand.

— Indonesia raises biodiesel allocation as B50 boosts palm oil demand

Higher domestic use may tighten exports and support rival vegetable oils

Indonesia has increased its 2026 palm-oil-based biodiesel allocation to 16.75 million kiloliters, providing the additional supply needed as the country transitions from its B40 blending mandate to B50, according to an Energy Ministry document reviewed by Reuters. The revised allocation is 1.1 million kiloliters, or 6.8%, above the original 15.65 million-kiloliter quota established when B40 was expected to remain in place throughout 2026.

The B50 mandate, which requires diesel fuel to contain 50% palm-based biodiesel, formally took effect July 1. However, the government is allowing fuel distributors three months to exhaust remaining B40 inventories and adjust blending and distribution systems. Full nationwide implementation is therefore expected around Oct. 1, limiting the amount of additional biodiesel required during 2026.

That explains why the new allocation remains below earlier estimates of 17.6 million kiloliters for a half-year B50 program and well below the roughly 20.1 million kiloliters that could be required if B50 operated for an entire calendar year. The 16.75 million-kiloliter quota should therefore be viewed as a transitional volume rather than the program’s likely demand level in 2027.

The immediate market implication is stronger domestic demand for Indonesian palm oil. Energy Minister Bahlil Lahadalia estimates B50 will raise crude palm oil consumption for biodiesel to between 16.3 million and 17 million metric tons, compared with approximately 15.2 million tons under the previous program. That additional demand will absorb supplies that otherwise could have entered the export market.

Indonesia is the world’s largest palm oil producer and exporter, meaning even a modest reduction in its exportable surplus can affect the entire global vegetable-oil complex. USDA forecasts Indonesian palm oil production will rise about 3% to 48 million metric tons in 2026/27, providing some additional supply, but production growth may not fully offset expanding biodiesel consumption, food demand and other domestic uses.

Malaysia may be one of the clearest beneficiaries. Buyers facing reduced Indonesian availability could shift some purchases to Malaysian palm oil. Higher palm prices could also improve the competitiveness of soybean oil, sunflower oil and canola oil, particularly in markets where those oils can be substituted in food or industrial applications. Reuters previously noted that significant increases in crude palm oil prices could push buyers toward alternative suppliers or competing edible oils.

Of note: For U.S. agriculture, the decision is modestly supportive for soybean oil. Stronger palm oil demand and potentially tighter Southeast Asian exports tend to provide a firmer floor under the broader vegetable-oil market. That could support soybean-crushing margins and the value of soybean oil used in U.S. biodiesel and renewable diesel production, although the impact will depend heavily on U.S. biofuel policy, domestic soybean supplies and the relative prices of competing feedstocks.

Indonesia also sees B50 as an energy-security and balance-of-payments policy. The Energy Ministry estimates the higher blend could reduce fuel-import costs by approximately 170 trillion rupiah, or about $9.4 billion, compared with roughly 133.3 trillion rupiah under B40. Indonesia hopes the program will substantially reduce or eliminate imports of certain diesel grades while insulating the economy from crude-oil supply disruptions and price spikes.

But those figures represent gross foreign-exchange savings rather than the program’s full net economic benefit. Indonesia subsidizes biodiesel when palm-based fuel costs more than conventional diesel, financing the difference largely through levies on palm oil exports. If crude oil prices weaken while palm oil remains expensive, the subsidy burden rises. Meanwhile, diverting more palm oil into domestic fuel production can reduce both export earnings and the levy revenue needed to finance the mandate.

That funding loop remains B50’s principal vulnerability. The program became more economically attractive when geopolitical tensions pushed crude prices higher, but its durability will depend on the relationship between crude oil, diesel and crude palm oil prices—not simply on the mandated blending percentage.

Bottom line: the higher allocation confirms that B50 is progressing beyond a policy announcement and beginning to create measurable additional palm oil demand. The 2026 increase is tempered by the phased transition, but a full-year B50 mandate in 2027 could require several million additional kiloliters of biodiesel. Unless Indonesian palm oil production accelerates correspondingly, the program is likely to tighten export availability, support global vegetable-oil prices and provide an indirect lift to soybean oil.

— Ag markets Tue., July 28:Bulls answer the bell: grains, cattle rebound from Monday’s rout

Falling crop ratings and a measured take on the border reopening put buyers back in charge, with traders one eye on a Fed decision due Wednesday

Tuesday’s ag markets were largely a mirror image of Monday’s washout. Grain and livestock bulls stepped up after the prior session’s beatdown, aided by a USDA Crop Progress report that showed heat and dryness taking a bigger-than-expected bite out of corn and soybean condition ratings, and by second thoughts on just how bearish USDA’s phased reopening of the southern cattle ports really is. The rebound came with some caution, however, as the Federal Open Market Committee (FOMC) opened its two-day meeting Tuesday, with a decision due Wednesday afternoon and markets unusually unsettled over whether Chairman Kevin Warsh’s “prices are too high” messaging tilts the committee hawkish.

•Corn: December corn rallied 6 1/2 cents to $4.80 1/2, nearer the daily high. The corn futures market bulls needed to step up and show fresh strength after Monday’s beatdown — and they did just that to keep the price uptrend alive and keep the bulls confident. Fundamentals gave them a reason: USDA’s weekly Crop Progress report, released after Monday’s close, showed corn conditions dropped four percentage points to 63% good to excellent, a larger decline than the trade expected, as a hot, dry pattern gripped parts of the Midwest and Plains during pollination and early grain fill, with 78% of the crop silking and 25% at dough. Weekly export inspections of 1.488 million metric tons slipped from the prior week but remain ahead of the pace needed to hit USDA’s export forecast, with Mexico and Japan the top destinations. Near-term weather now carries extra weight: another week of stress ratings would embolden bulls who argue the market has been pricing a record crop that is no longer a sure thing.

• Soybeans: November soybeans rose 6 1/4 cents to $12.20, nearer the daily high. September soybean meal gained $1.00 to $321.30, nearer the daily high. September soybean oil fell 71 points to 70.14 cents, nearer the daily low and hit a three-week low. The soybean futures market saw some short covering and perceived bargain buying today, after Monday’s solid selling pressure. As with corn, Monday’s condition report leaned friendly — soybean ratings fell three points to 63% good to excellent, with 80% of the crop blooming and 47% setting pods, right as the crop heads into its yield-determining August stretch. Bean oil was the soy complex’s weak link, pressured by lower energy prices that dull biofuel demand and by softness across global vegetable-oil markets; the resulting oil/meal spread unwinding helped meal outperform. The demand backdrop remains the swing factor: China’s resumption of U.S. soybean purchases under the trade thaw is underpinning the market, and talks aimed at rolling back agricultural tariffs continue, but weekly inspections of 348,850 MT — down from a year ago — show old-crop shipments merely adequate.

• Wheat: September SRW rose 2 1/2 cents to $6.62 1/2, nearer the daily high. September HRW fell 2 3/4 cents to $7.26 1/4, nearer the daily low. September spring wheat futures fell 3 3/4 cents to $7.02 1/2. The winter wheat futures markets saw mixed trade that included mild follow-through technical selling in HRW and some mild short covering in SRW today, following Monday’s losses. Seasonal harvest pressure is winding down, with winter wheat harvest 81% complete versus the 79% five-year average. Spring wheat ratings held at 53% good to excellent, but the poor-to-very-poor category rose three points to 15% — deterioration the Minneapolis market shrugged off Tuesday. Demand news was quietly supportive: weekly wheat inspections of 394,785 MT were up sharply from both last week and last year, led by Bangladesh and Japan, giving the new marketing year a solid early export pace.

•Cotton: December cotton futures fell 35 points to 80.53 cents, near mid-range. Cotton futures today saw some mild selling interest, but bulls are keeping alive a price uptrend on the daily bar chart. Monday’s report showed cotton bucking the row-crop trend, with conditions improving a point to 46% good to excellent, 81% of the crop squaring and 45% setting bolls. With supply concerns easing slightly, cotton remains hostage to outside markets and macro sentiment — another reason Wednesday’s Fed decision matters to the fiber market.

• Cattle: August live cattle rose $2.25 to $227.475, near mid-range and closed at a two-week high close. August feeder cattle gained $4.825 to $343.075, near mid-range. The cattle futures markets today saw decent rebounds from Monday’s selling pressure that was due in part to news USDA announced a coordinated, phased reopening of southern cattle ports. On reflection, traders judged the announcement less bearish than Monday’s knee-jerk selling implied: the reopening starts with a single port — Douglas, Arizona, on Aug. 24 — limited to cattle from Sonora and Chihuahua, Mexico’s lowest-risk states for New World screwworm, with every animal subject to full USDA inspection and USDA reserving the right to pause the process if audits show rising risk. That measured, conditions-based rollout means Mexican feeder cattle will return in a trickle, not a flood, leaving the historically tight U.S. supply picture largely intact — a point the feeder market punctuated with Tuesday’s near-$5.00 bounce.

• Hogs: August lean hog futures rose $0.125 to $103.10, near mid-range and hit a nine-week high. The lean hog futures market saw mild technical buying today, with good gains in the cattle futures markets also spilling over into some buying interest in hogs. The nine-week-high close keeps the chart posture firmly bullish, though the modest size of the gain suggests traders want confirmation from cash hog and pork cutout values before extending the rally at these price levels.

• The macro wildcard: Wednesday afternoon’s FOMC decision looms over all of Tuesday’s price action. With the debate under Chairman Warsh unusually including the possibility of a rate hike rather than the customary cut-or-hold question, and the U.S. dollar steadying ahead of the announcement, ag traders kept some powder dry. A hawkish surprise that lifts the greenback would be a headwind for export-sensitive grain and fiber markets; a market-friendly outcome would give this week’s rebound room to run.

— Boozman now targets Aug. 6 farm bill markup as vote math tightens

McConnell’s absence and SNAP fight leave little margin before recess

Senate Ag Committee Chairman John Boozman (R-Ark.) is targeting Aug. 6 for a farm bill markup, setting up a potentially decisive committee vote immediately before senators leave Washington for their extended summer break. Boozman said Tuesday the committee will “hopefully” consider the legislation next Thursday. A formal business meeting had not been posted on the committee calendar as of Wednesday morning. Committee rules generally require only 24 hours’ notice for an additional meeting in Washington, so the lack of an official announcement does not yet indicate the date is slipping.

The timing leaves almost no room for another delay. Aug. 6 is the Senate’s second-to-last scheduled session day before the August recess begins after Aug. 7. If Boozman cannot assemble the votes, consideration would probably slide into September — the same month the current extension of the 2018 Farm Bill expires.

McConnell’s absence complicates the vote count. The Ag Committee has 12 Republicans and 11 Democrats, but Sen. Mitch McConnell (R-Ky.) remains in a rehabilitation facility and has not been medically cleared to return for upcoming Senate votes. Without McConnell, Republicans effectively have 11 available committee members — the same number as Democrats.

Meanwhile, Kentucky Gov. Andy Beshear (D) sharply escalated his demands for information about McConnell’s prolonged absence. Beshear called on McConnell to “directly and verbally address the people of Kentucky and provide proof of your capacity to serve, or resign.” He also asked Senate Majority Leader John Thune (R-S.D.) to investigate McConnell’s fitness for office if the senator does not publicly demonstrate that he can continue serving. Beshear said elected officials surrender much of their personal privacy and argued that the speculation surrounding McConnell could have been prevented with minimal transparency. He concluded: “Kentuckians are just asking you to be honest.” The comments marked a significant escalation from Beshear’s July 8 letter, which merely requested an update on McConnell’s health and ability to serve.

Under committee rules, at least 12 members must be physically present to report legislation, and a majority of those present must vote in favor. If the remaining 11 Republicans and all 11 Democrats attend, the bill would need 12 votes; an 11-11 party-line tie would fail. Boozman therefore needs either Democratic support or attendance circumstances that change the threshold.

Boozman has nevertheless said he believes the committee has “a product that we can get out of committee, with or without” McConnell. That confidence suggests negotiations are focused on securing at least one Democratic vote — or potentially a broader bipartisan agreement — rather than simply waiting for McConnell to return.

SNAP remains the principal bargaining issue. Boozman released his Agricultural Act of 2026 discussion draft June 23, describing it as a package combining Republican priorities with more than 100 bipartisan provisions affecting farmers, rural communities, conservation, research, credit and nutrition programs.

But all 11 committee Democrats immediately objected that the proposal does not reverse previously enacted SNAP reductions or delay the shift of some food-assistance costs from the federal government to states. Democrats acknowledged that the draft contains bipartisan provisions but said those nutrition issues must be addressed for the legislation to succeed on the Senate floor.

That statement gives Boozman a clear path to a deal but also establishes the price Democrats are likely to demand. A narrowly tailored delay in the SNAP state cost-sharing requirements could provide political space for one or more Democrats to support the bill without reopening every nutrition provision enacted last year. Republicans, however, would need to find budget offsets or accept additional federal costs — a difficult decision as Congress simultaneously debates farm aid and other spending priorities.

The larger significance: An Aug. 6 committee vote would not ensure enactment, but it would give the Senate a formal negotiating position before the September deadline. Failure would strengthen expectations that Congress will again extend the 2018 law rather than complete a new five-year bill this fall.

Upshot: The word “hopefully” is therefore important. Boozman has selected a date, but he has not yet announced that he has the votes. The days leading to Aug. 6 will reveal whether the markup is designed to approve a negotiated bipartisan bill or merely force members to place their positions on the record before recess.

— USDA locks in post-1990 wetland determinations

Rule eases farm program uncertainty but could invite another legal challenge

USDA is moving to settle a decades-old dispute over the validity of wetland maps used to determine farmers’ eligibility for commodity programs, conservation assistance, farm loans and crop insurance subsidies.

An interim rule scheduled for publication July 29 in the Federal Register (link) establishes that wetland determinations issued after Nov. 28, 1990, are certified when the affected producer was notified of the certification and informed of the right to appeal. The change is aimed principally at determinations issued between Nov. 28, 1990, and July 3, 1996 — a group that has been treated inconsistently under shifting Natural Resources Conservation Service (NRCS) policies.

The practical result is that thousands of farmers and landowners may continue relying on decades-old wetland maps rather than being required to obtain new determinations before installing drainage systems, leveling land, clearing vegetation or making other operational changes.

Under the Food Security Act’s wetland conservation provisions, commonly known as “Swampbuster,” producers can lose access to certain USDA benefits if they produce crops on converted wetlands or convert wetlands to make crop production possible. The affected benefits include most commodity and conservation programs, agricultural loans and federal crop insurance subsidies.

Certainty — and a significant limitation on NRCS. The most important feature of the rule is not simply that older determinations are recognized. It is that NRCS generally cannot revisit or replace a certified determination on its own while the land remains in agricultural use.

USDA says it has no independent authority to question a prior certified determination involving agricultural land. A review ordinarily must be requested by the person affected by the certification.

That represents a substantial degree of regulatory protection for producers who have made planting, drainage, land-purchase and infrastructure decisions based on maps issued more than 30 years ago. USDA argues that questioning those determinations now would not only disrupt future planning but could cast doubt on decisions made decades earlier.

Producers may still request a review if they disagree with a determination. Existing regulations also allow a review when a natural event has changed the land’s topography or hydrology, or when NRCS agrees that the original determination contained an error.

The rule therefore creates a form of regulatory finality, but not an absolute exemption from wetland requirements. Farmers must continue complying with Swampbuster, and the older determination must have been accompanied by certification notice and information about appeal rights.

USDA rebuilds its case after court defeat. The rule is also a direct response to a February 2024 ruling by the U.S. District Court for the District of Columbia. The court concluded that NRCS had not adequately explained why it shifted toward treating more pre-1996 wetland determinations as certified. It vacated USDA’s 2020 rule and returned the matter to the agency for further consideration.

USDA’s new approach is essentially to build the administrative and historical record that the court found missing.

The 26-page rule traces wetland policy through the 1985, 1990 and 1996 farm bills, a 1994 interagency agreement and numerous NRCS manual revisions. USDA argues Congress intended certification to give farmers a dependable answer about which acres were wetlands and later directed that final certifications remain valid while the land stays in agricultural use.

USDA also attempts to eliminate the subjective “map quality” test that previously allowed NRCS personnel to reconsider whether an older determination was sufficiently accurate. Under the new rule, the controlling questions are whether the determination was certified, whether the producer received notice and whether appeal rights were provided.

That simpler test should reduce administrative delays and inconsistent decisions among NRCS offices. It also lowers the risk that farmers in similar circumstances will receive different answers based on how individual staff members evaluate an aging map.

Another court fight remains possible. The extensive legal history suggests USDA expects the rule to be challenged. The National Wildlife Federation successfully contested the earlier rule, and environmental organizations could again argue USDA is validating maps that may not reflect current conditions or modern delineation methods.

USDA’s defense will rest heavily on statutory language and producer reliance interests. The agency emphasizes that Congress, rather than NRCS, established the durability of certified determinations. It also cites the Supreme Court’s 2024 Loper Bright decision, which ended mandatory judicial deference to agency interpretations, to argue that the statutory language itself supports USDA’s position.

USDA also determined that the rule does not require an environmental assessment, environmental impact statement or Endangered Species Act consultation because the agency says Congress left it no discretion to reconsider properly certified determinations. That conclusion could become another focal point in litigation.

One important limitation is that the rule concerns USDA program eligibility under Swampbuster. It does not purport to determine whether land is subject to Clean Water Act Section 404 requirements administered by EPA and the Army Corps of Engineers. USDA’s document recounts how a 1994 agreement once attempted to produce a single wetland answer for both programs, but USDA and the Corps withdrew from that arrangement in 2005. The distinction means a certified NRCS map may protect a producer’s USDA program eligibility without necessarily resolving every federal or state permitting question involving the same property.

The interim rule takes effect immediately upon publication, with USDA accepting public comments for 60 days. USDA says delaying implementation would prolong uncertainty for producers and interfere with administration of farm programs.

Bottom line: For producers holding determinations from the early 1990s, the immediate message is favorable: Unless they request a review, properly noticed certifications are intended to remain the operative maps. The longer-term question is whether USDA’s expanded statutory explanation is strong enough to survive the legal challenge that may follow.

— Tuesday: Oil retreats as Hormuz diplomacy reopens path to de-escalation

Hormuz talks strip out risk premium, but threats to regional supply remain

Crude oil prices dropped sharply Tuesday as traders responded to renewed diplomatic efforts aimed at restoring secure passage through the Strait of Hormuz, unwinding another portion of the war premium that drove oil above $100 per barrel last week.

West Texas Intermediate crude fell $3.35, or 4.1%, to settle at $79.26 per barrel on July 28, its lowest close since July 16. 

Brent crude dropped $4.27, or 4.8%, to $84.09, its lowest close since July 13. 

The benchmarks have fallen roughly 16% over three sessions as the U.S. paused attacks on Iran and mediators sought a more durable arrangement covering the strategic waterway.

The decline does not mean Middle East supply conditions have returned to normal. Rather, the market is shifting away from the worst-case assumption that prolonged warfare would leave a substantial portion of Persian Gulf exports trapped behind the Strait of Hormuz.

The immediate catalyst was an Omani proposal for a regional mechanism to manage navigation through the strait. Under the plan, shipping companies would make voluntary contributions to a fund covering navigation management, environmental protection, search-and-rescue operations and other maritime services. The arrangement is modeled partly on practices used around the Strait of Malacca and reportedly has backing from several Gulf governments.

Iranian Foreign Minister Abbas Araghchi discussed maritime security separately with officials from Oman and Saudi Arabia, giving markets hope that neighboring governments may be able to construct a compromise that neither Washington nor Tehran could negotiate directly.

The proposal is significant because it attempts to bridge a central disagreement. Iran has sought recognition of a role in managing the waterway and collecting revenue from shipping, while the U.S. has insisted that commercial vessels receive unrestricted passage without compulsory tolls. A voluntary, regionally administered system could give Tehran a political and financial benefit without formally granting it unilateral control over one of the world’s most important international waterways.

But the word “voluntary” may become the plan’s weakest point. Shipowners, insurers and governments will need assurances that vessels declining to pay will not face delays, inspections or security threats. Without clear enforcement rules and independent oversight, voluntary fees could gradually function like compulsory tolls.

That uncertainty explains why oil remains well above levels recorded before the latest escalation. Roughly one-fifth of the world’s oil and liquefied natural gas normally moves through Hormuz, and alternative pipelines cannot replace all of that capacity. Saudi Arabia and the United Arab Emirates have pipelines that could bypass about 4.7 million barrels per day, a fraction of the volumes normally exposed to the strait.

President Donald Trump added to the market’s optimism by saying Washington was having “good talks” with Tehran. But as he has done before, he paired that assessment with another warning that U.S. military strikes could resume if negotiations fail. Iran has similarly indicated that its restraint depends on the U.S. maintaining its bombing pause, leaving the current calm closer to a conditional truce than a settled ceasefire.

Events in Saudi Arabia underline that risk. Saudi air defenses intercepted drones that authorities said were launched by Iran-backed groups in Iraq and aimed at oil facilities in the Eastern Province and Riyadh. Meanwhile, Yemen’s Iran-aligned Houthis claimed an operation against infrastructure linking eastern Saudi production areas with the Red Sea export terminal at Yanbu.

The Houthi threat is particularly important because Saudi Arabia’s East-West pipeline is one of the main alternatives to Hormuz. The pipeline normally has capacity of about 5 million barrels per day and carries crude from the Abqaiq area to Yanbu. Attacks on that system would threaten the very route intended to protect Saudi exports from a Persian Gulf disruption.

The result is a market facing interconnected risks at both ends of the Arabian Peninsula: Iran can threaten Hormuz, while the Houthis can threaten Red Sea shipping and the Saudi pipeline network. The possibility of disruptions occurring simultaneously means diplomacy over Hormuz alone may not be enough to eliminate the broader regional risk premium.

Tuesday’s decline therefore represents a rapid repricing of probabilities rather than proof that the supply crisis has ended. Futures traders are betting that negotiations will improve shipping access before physical shortages become more severe. Yet freight costs, insurance rates and prices for immediately available physical crude may remain elevated until ship traffic increases materially and vessels can operate without military escorts or special authorization.

For consumers and central banks, a sustained return of WTI below $80 would reduce some of the inflation pressure created by the conflict. But the benefit depends on prices remaining lower long enough to work through refinery margins and fuel-distribution systems. Another breakdown in talks, attack on a tanker or strike against Saudi infrastructure could quickly reverse much of the decline.

Upshot: For now, oil is trading on diplomacy rather than restored supply. The Oman proposal has created a plausible off-ramp, but the market is likely to demand evidence — more ships moving safely through Hormuz, lower war-risk insurance premiums and a broader regional ceasefire — before concluding that the Middle East supply threat has genuinely receded.

— NWS outlook: Severe thunderstorm and flash flooding risk across the Southeast and northern/central Plains into upper Midwest; Flash flooding concerns across portions Northeast through Thursday… …Monsoonal moisture continues to foster numerous thunderstorms and the risk of flash flooding over the Four Corners, Rockies, and High Plains the next several days… …Dangerous heat wave expands from the southern U.S. into the Southwest and Intermountain West this week.

 

— Corn Belt rain offers timely relief, but weather risk is far from over

Weekend rains ease yield risk, but Missouri and the Plains remain exposed

A developing storm pattern should deliver an important round of rainfall across the central Corn Belt from late Thursday through the weekend, offering timely relief after persistent heat and rapidly declining soil moisture. The event is expected to produce widespread moderate to heavy totals, with most central production areas seeing improved moisture conditions by Sunday. Missouri, however, may receive less rain than neighboring states, leaving a notable pocket of crop stress near the center of the region.

The rain arrives at an especially important stage of crop development. As of July 26, 78% of U.S. corn was silking and 25% had reached the dough stage. Meanwhile, 80% of soybeans were blooming and 47% were setting pods. Corn and soybean condition ratings both fell to 63% good to excellent after the latest stretch of heat.

For corn, the weekend moisture should support kernel establishment and early grain fill, particularly where crops entered pollination with adequate root systems but diminishing topsoil moisture. Rain cannot completely reverse yield losses caused by extreme heat, poor pollination or wind damage, but it can prevent additional deterioration and improve kernel weight during August.

Soybeans may benefit even more because much of their yield potential remains undetermined. Improved moisture during pod setting and seed fill can increase pod retention, seed size and final yields. That makes the timing of the rain potentially more significant for November soybeans than for corn fields where pollination damage may already have occurred.

The forecast is not uniformly favorable. Missouri’s projected rainfall deficit could become increasingly important because the state sits between wetter opportunities across the central and northwestern Corn Belt and persistent heat farther south. A continued pattern of scattered thunderstorms also means county-level differences will remain substantial. Some farms may receive several inches while nearby locations receive only limited relief.

Additional ridge-rider thunderstorms are possible beginning late Monday as northwest flow continues into the six- to 10-day period. Expanded rainfall coverage across the northwestern Corn Belt would be particularly useful for Nebraska, the Dakotas and western Minnesota, where heat and moisture losses have been more severe. Nebraska reported 72% of its topsoil moisture and 72% of its subsoil moisture as short or very short as of July 26.

However, the wetter private-model signal is somewhat more optimistic than the government’s broader outlook. NOAA’s July 28 forecast places most Corn Belt states near normal for precipitation during Aug. 3-7, with above-normal rainfall favored mainly in Wisconsin and Michigan. NOAA continues to favor above-normal temperatures across most of the central U.S. in both the six- to 10-day and eight- to 14-day periods. Forecast confidence falls to below average in the eight- to 14-day window because of model disagreements and a changing upper-air pattern.

That distinction matters. The expected cooler period from Friday through roughly Aug. 3 should reduce crop-water demand and make each inch of rain more effective. But it should be viewed as an interruption of the heat rather than a permanent pattern change. NOAA still identifies a potential rapid-onset drought threat across portions of the Great Plains, middle Mississippi Valley and Great Lakes because of existing dryness and the possibility of renewed heat.

Conditions are more threatening in the Southern Plains, where limited rainfall and extreme heat will continue stressing sorghum, cotton, pasture and livestock through Friday. Heat raises livestock water requirements, suppresses weight gains and accelerates pasture deterioration. Above-normal temperatures returning during Week Two would limit the value of any temporary moderation.

Periodic rain across northern portions of the Hard Red Winter wheat belt will provide little benefit to wheat already harvested, but it could improve pasture conditions, replenish depleted soil moisture and support fall wheat planting preparations. The latest Drought Monitor showed rapidly deteriorating conditions across the Dakotas and Nebraska, with temperatures running 4 to more than 10 degrees above normal in parts of the High Plains.

The Mid-South faces a different problem. A drier five-day outlook delays meaningful moisture until early August, increasing stress on soybeans, cotton and other crops entering reproductive stages. Rain during the six- to 10-day window would still be useful, but the crop response will depend heavily on how much heat and moisture loss occur before it arrives.

Market impact: Analysts says the forecast is initially bearish for corn and soybean futures because it reduces the immediate threat of broad Corn Belt yield losses. But the downside may be limited by uneven rainfall, declining crop ratings, continued Southern Plains stress and uncertainty about renewed heat after Aug. 3. The weather market is shifting from a question of whether rain will arrive to whether rainfall will be sufficiently widespread—and whether the cooler pattern lasts long enough to protect grain fill.

Index to links of special reports & other items of note 

AG POLICY & MARKETS DAILY   |   UPDATES: POLICY / NEWS / MARKETS — WEDNESDAY, JULY 29, 2026