Despite Trump Comments, North America is Not Optional for U.S. Farm Country
Trump India visit talk puts trade deal on a political clock | RVO compliance squeeze is shifting from policy risk to physical supply risk | Corn Belt heat wave becomes first real crop-weather test
| LINKS |
Link: USDA Weighing Next Steps to Expand Small Meat
Processing Capacity
Link: USDA Releases Updated Carbon Intensity Calculator for Biofuel
Feedstocks; Neiffer Analyzes
Note: Wiesemeyer’s Perspectives podcast update coming June 28
| Updates: Policy/News/Markets, June 27, 2026 |
| UP FRONT |
TOP STORIES
— Despite Trump comments, North America is not optional for U.S. farm country: U.S. leverage over Canada and Mexico is real, but the farm, energy, fertilizer, ethanol and machinery supply chains are too integrated for North American trade to be treated as expendable.
— Trump India visit talk puts trade deal on a political clock: Rubio’s comments suggest Washington wants a U.S./India trade deal ready for a possible Trump visit early next year, but agriculture, tariffs and India’s domestic farm politics remain major constraints.
— Truce holds by a thread as Hormuz skirmishes reignite U.S./Iran hostilities: Fresh drone and tanker incidents show the U.S./Iran understanding is still intact but fragile, keeping energy, freight, insurance and fertilizer-risk premiums vulnerable to renewed escalation.
FINANCIAL MARKETS
— Equities Fri., June 26 and weekly change: U.S. stocks posted modest Friday losses, but the week exposed a deeper split as the Nasdaq sold off sharply on AI and semiconductor concerns while the Dow gained on rotation into less crowded sectors.
AG MARKETS
— Ag markets end week with soybeans firmer, wheat and cotton under pressure: Soybeans were the week’s relative strength leader, while wheat and cotton ended with weaker technical signals and livestock markets saw mostly corrective, end-of-week profit-taking.
ENERGY MARKETS & POLICY
— Oil slumps as Hormuz flows recover despite fresh ceasefire tensions: Crude prices fell sharply as Gulf shipping and exports improved, shifting the market from a Hormuz-closure fear trade toward a supply-restoration trade despite lingering geopolitical risk.
— RVO compliance squeeze is shifting from policy risk to physical supply risk: Elevated RIN prices show the market is questioning whether renewable diesel, biodiesel, feedstocks and imports can scale fast enough to meet EPA’s larger 2026-27 RFS mandates.
WEATHER
— NWS outlook: Flooding, severe storms, critical fire weather and expanding heat risks are all in play, with the central and eastern U.S. heat wave becoming a key concern heading into next week.
— Corn Belt heat wave becomes first real crop-weather test: The coming heat is not yet a national crop scare, but prolonged dryness and high temperatures in the Plains and western Corn Belt could start pressuring corn, soybean, livestock and forage conditions.
| TOP STORIES—Despite Trump comments, North America is not optional for U.S. farm countryU.S. has leverage over Canada and Mexico, but trade in food, fuel, fertilizer, ethanol and equipment shows a production system that would be costly to pull apart President Trump’s argument that the United States does not need Canada and Mexico for trade may work as negotiating rhetoric, but it is much harder to defend as supply-chain math. Trump recently said the U.S. “would do better” without USMCA, even as farm groups and farm-state lawmakers are urging an extension of the agreement with duty-free agricultural trade and stronger access on issues such as corn, ethanol and dairy. The scale alone argues against the idea that these are optional relationships: U.S. goods trade totaled about $719.5 billion with Canada in 2025 and $872.8 billion with Mexico, meaning the two neighbors accounted for roughly $1.59 trillion in two-way goods trade and about $674.5 billion in U.S. goods exports. The more important point is that this is not just “trade” in the abstract. For agriculture, Canada and Mexico are both major customers and major suppliers. USDA says Mexico was the largest market for U.S. agricultural exports in fiscal 2025, accounting for 18% of the total, while Canada closely followed with $28.2 billion in purchases. On the import side, Mexico and Canada were the two largest suppliers of agricultural products to the U.S., at $43.8 billion and $39.3 billion, respectively. That means the U.S. depends on its neighbors both to absorb U.S. grain, meat, dairy and processed-food exports and to supply produce, livestock products, oilseeds, canola products, beverages and other food items that help stabilize U.S. retail availability and pricing. Mexico is especially important because the trade is complementary rather than simply competitive. USDA notes that nearly three-fourths of U.S. agricultural exports to Mexico are grains, oilseeds, meat or related products, while Mexico does not produce enough grains and oilseeds to meet internal demand. In return, more than 70% of U.S. agricultural imports from Mexico consist of vegetables, fruit, beverages and distilled spirits. In practical terms, U.S. corn, soy products, pork, dairy and poultry help feed Mexico’s consumers and livestock sectors, while Mexican produce helps fill U.S. shelves. A serious trade rupture would not make either country more independent; it would reprice the system and create openings for competitors. Canada plays a different but equally important role. USDA says the U.S. is Canada’s largest agricultural trading partner, buying 62% of Canadian agricultural exports and supplying 54.8% of Canadian agricultural imports. Nearly all bilateral agricultural trade moves tariff- and quota-free under USMCA. Canada buys major volumes of U.S. fuel ethanol, pet food, beef, pork and processed foods, while the U.S. imports Canadian canola oil, beef, pork, potatoes, baked goods and other products. This is why the Canada relationship is not just about border politics or dairy disputes; it is about two mature food systems that have grown around predictable access. Ethanol is one of the clearest farm-state examples. USDA says U.S. fuel ethanol exports reached a record 2.13 billion gallons in the 2024-25 marketing year, with Canada taking 758 million gallons. The same USDA update noted that fuel ethanol production consumed 5.44 billion bushels of corn, or 36% of total U.S. corn use, in 2024-25. That makes Canadian ethanol demand more than an energy footnote; it is part of the demand base supporting U.S. corn growers and ethanol plants. Mexico is a smaller ethanol buyer, but industry data show it also reached a record import volume from the U.S. in 2024-25. Energy makes the “we do not need them” claim even harder to square with reality. The U.S./Canada energy relationship is built around physical infrastructure and refinery configuration, not sentiment. EIA estimated U.S./Canada energy trade at $151 billion in 2024, with U.S. energy imports from Canada far exceeding exports. Canada was the primary source of U.S. crude oil imports, averaging 4.1 million barrels per day, and EIA noted U.S. refiners are well-suited to process heavy Canadian crude. The U.S. also imports natural gas and electricity from Canada. Those flows could not be casually replaced without price effects, infrastructure constraints and refinery inefficiencies. With Mexico, the energy dependence runs more in the other direction, but that still matters to the U.S. economy. EIA’s latest full energy-trade valuation still pegs U.S./Mexico energy trade at $57 billion in 2024, with U.S. exports to Mexico at $41 billion, but newer volume data show the relationship remained deeply embedded into 2025 and early 2026. Mexico remained the largest destination for U.S. gasoline exports in 2025, taking 486,000 barrels per day, or 54% of all U.S. gasoline exports, and it was also the top destination by volume for U.S. distillate and jet-fuel exports. Total U.S. crude oil and petroleum product exports to Mexico eased to about 398 million barrels in 2025 from 429 million barrels in 2024, but still averaged roughly 1.09 million barrels per day; latest monthly EIA data show product flows to Mexico remained large in early 2026, at 901,000 barrels per day in January, 1.10 million barrels per day in February and 943,000 barrels per day in March. The natural gas link is even more structural: U.S. pipeline exports to Mexico hit a monthly record of 7.5 billion cubic feet per day in May 2025, averaged about 6.64 Bcf/d for all of 2025, and were still running around 6.35 Bcf/d in March 2026. That supports U.S. refiners, Permian and South Texas gas producers, pipeline operators, Gulf Coast logistics and, increasingly, LNG projects in Mexico that are designed to use U.S.-sourced natural gas. Fertilizer is the most direct input-cost warning sign for U.S. agriculture. The U.S. may be a grain powerhouse, but it is heavily reliant on imported potash, a key potassium fertilizer. USGS estimates U.S. net import reliance for potash at 92%, with Canada supplying 79% of U.S. potash imports during 2021-24. Domestic U.S. production is small relative to consumption, and the fertilizer industry accounts for most potash use. A trade fight that disrupts or taxes Canadian potash would flow directly into crop budgets, especially for corn, soybeans, cotton and specialty crops. Farmers can defer some purchases in a downturn; they cannot easily farm around a potassium shortage. Farm machinery is another area where the dependence is less visible but very real. Modern equipment markets rely on cross-border flows of finished machinery, components, replacement parts, trade-ins, auctions, service support and dealer networks. Equipment industry officials have warned that USMCA’s tariff-free access and predictable rules are critical for dealers and manufacturers, and that border disruptions can be especially costly during planting and harvest. The Association of Equipment Manufacturers has also emphasized that the U.S. farm equipment sector runs a surplus with Canada, sending roughly $10 billion in goods there while importing about $3.5 billion. In other words, the U.S. is not just buying machinery from Canada; it is also selling into one of its most important machinery markets. Framing the issue. The better way to frame the issue is not whether the U.S. “needs” Canada and Mexico in an absolute sense. The U.S. has enormous leverage because both neighbors depend heavily on access to the American market. But leverage is not the same as independence. In agriculture, Canada and Mexico are top buyers. In energy, Canada is a critical crude and gas supplier, while Mexico is a critical refined-fuel and gas customer. In ethanol, Canada is the leading export outlet. In fertilizer, Canadian potash is difficult to replace. In machinery, the North American market is integrated through parts, plants, dealers and farmers’ capital cycles. That means the smartest U.S. posture is hard-nosed enforcement and targeted negotiation, not a broad claim that North American trade is expendable. Washington can press Canada on dairy access, Mexico on biotech corn and ethanol policy, and both countries on rules enforcement without pretending the U.S. would be stronger by weakening the trade platform that supports U.S. farm income, energy security and rural manufacturing. North America is not a concession the U.S. gives away. Properly managed, it is one of America’s biggest competitive advantages. —Trump India visit talk puts trade deal on a political clockRubio’s comments suggest Washington wants a deal durable enough to survive tariff litigation and sensitive enough not to trip India’s farm-sector red lines Secretary of State Marco Rubio’s comments that the Trump administration is working toward a presidential visit to India early next year add a diplomatic deadline to U.S./India trade talks that have been close for months but not yet finished. Rubio told the Indo-Asian News Service (IANS) that he expects to travel to India before the end of this year to prepare the ground and said the two sides are in the “last inches” of finalizing a trade deal. That language is important because it suggests the administration wants the visit to be more than symbolic; it wants a trade deliverable large enough for President Donald Trump and Prime Minister Narendra Modi to present as proof that a difficult year in bilateral relations has been stabilized. The timing also follows Trump’s June 17 meeting with Modi on the sidelines of the G7 summit in France, where Trump said the two countries were working on trade deals and described Modi as a tough negotiator. Reuters noted that India has been pressing for a Trump visit for months, potentially tied to a broader meeting involving Japan and Australia, which would make the trip part trade diplomacy and part Indo-Pacific strategy. The trade talks remain complicated because the original bargain has been blurred by U.S. tariff litigation and Section 301 leverage. In February, the two sides announced a framework under which the U.S. would lower reciprocal tariffs on India to 18% while India would reduce barriers and buy more American goods. But the U.S. Supreme Court ruling invalidating Trump’s sweeping global tariffs effectively clouded the U.S. side of that bargain, while USTR Section 301 investigations into overcapacity and forced-labor issues continue to hang over Indian exports. That is why India is not simply asking for “a deal.” New Delhi wants a deal that gives Indian exporters a competitive tariff advantage over regional rivals such as Vietnam, Bangladesh and other Asian suppliers. Indian Trade Minister Piyush Goyal said the key question is how Washington can provide the legal backing for that advantage; Reuters quoted him as saying the deal is on when that happens. For the U.S., the deal is about market access, trade-balance politics and China strategy. USTR said goods trade with India totaled an estimated $129.2 billion in 2024, while the U.S. goods deficit with India was $45.7 billion. USTR also said India’s average applied tariff was 17%, with agricultural tariffs far higher than U.S. levels. Those figures explain why Trump sees India as both a strategic partner and a tariff target: it is a major market, but one Washington views as structurally difficult for U.S. exporters. Agriculture remains one of the biggest pressure points. The White House’s February framework said India would eliminate or reduce tariffs on a wide range of U.S. industrial goods and selected food and agricultural products, including DDGs, sorghum, tree nuts, fresh and processed fruit, soybean oil, wine and spirits. It also said India intends to buy more than $500 billion of U.S. energy, information and communications technology, coal and other products. But the likely ag gains should not be overstated. The most realistic openings are in products India already imports or can absorb without directly threatening politically sensitive staples: feed ingredients, soybean oil, tree nuts, fruit, some processed foods and possibly higher-value consumer products. Dairy, poultry, wheat, rice, corn and genetically engineered crops remain much tougher because they collide with India’s farm politics, food-security system and regulatory positions. USTR’s 2026 trade-barriers report said India’s average applied agricultural tariff was 36.7% in 2024 and cited high duties on vegetable oils, apples, corn, raisins, walnuts and other products. Dairy is especially sensitive. USTR said India imposes onerous dairy import requirements, including certification tied to animal feed practices, and that those requirements, along with facility-registration rules and tariff rates, continue to hamper U.S. access to one of the world’s largest dairy markets. That makes a broad dairy breakthrough unlikely unless the final agreement uses narrow categories or technical workarounds rather than a sweeping market opening. The domestic politics in India are already visible. Farmer groups have warned that the agreement could expose Indian producers to competition from U.S. cotton, sorghum, soybean oil, orange juice, dairy, poultry and genetically modified products. Those concerns matter because Modi’s government is unlikely to give Trump a farm-market concession that revives rural backlash at home, especially on dairy or staples tied to minimum support price politics. Strategically, Rubio’s comments also fit the broader Quad frame. The Quad foreign ministers met in New Delhi in May and announced cooperation on a Fiji port project, critical minerals and energy security, while Rubio described the grouping as central to U.S. strategy. A Trump visit to India early next year could therefore serve several purposes at once: finalize or showcase a trade agreement, reset a relationship strained by tariffs and Russian oil tensions, and reinforce India’s role in the U.S. Indo-Pacific approach. Bottom line: a Trump trip to India would be a strong signal, but the visit itself is not the deal. The real test is whether USTR can craft a legally durable tariff advantage for India while securing enough Indian market access to satisfy Trump’s reciprocal-trade agenda. If that legal and political balance is found, the visit could cap a meaningful reset. If not, Rubio’s “last inches” could still prove to be the hardest stretch. —Truce holds by a thread as Hormuz skirmishes reignite U.S./Iran hostilitiesTit-for-tat strikes test a ten-day-old memorandum, slow the strait’s normalization, and threaten the energy-price relief markets had begun to price in The interim understanding the U.S. and Iran reached in mid-June is facing its most serious test since signing, and agricultural and energy markets that had started to exhale should treat the relief as provisional. The U.S. struck Iran on Friday in response to a drone attack a day earlier on a cargo ship in the Strait of Hormuz — the most significant test yet to the interim understanding reached a week earlier. The exchange did not stop there: on Saturday morning, Bahrain reported strikes by Iranian drones, which the Revolutionary Guard Corps claimed targeted U.S. forces in the Gulf state, and a tanker was struck by an unidentified projectile in the strait that same day. What actually happened. The sequence began Thursday, when the British military said a vessel was hit by a projectile off the coast of Oman, an incident Trump attributed to “at least four” Iranian one-way attack drones, one of which hit the upper deck of a large cargo ship while the U.S. knocked down three others. He called it a “foolish violation” of the ceasefire. Washington answered Friday: CENTCOM said U.S. aircraft struck Iranian missile and drone storage locations and coastal radar sites, while stressing, per a U.S. official, that the strikes do not reflect a return to major combat operations, at least for now. The core dispute is about control, not just incidents. The skirmishes are symptoms of an unresolved structural disagreement embedded in the memorandum itself. Tehran and Washington remain at odds on even basic points in their memorandum of understanding, including control of the strait and how Iran will spend its unfrozen funds. Iran’s position is that policing the waterway is its prerogative, not a violation — its parliamentary security chief framing the strikes as “ceasefire management” rather than a breach, and insisting the strait is governed by Iran. The friction is concrete on the water: at least two tankers reversed course on the UN-backed route near Oman after Iran insisted vessels use only Tehran-approved routes. Article 5 of the memorandum punts the question, leaving the strait’s “future administration” to later talks between Iran and Oman — meaning the central leverage point was never actually settled at signing. Market and supply implications. This is the read that matters for energy, fertilizer, and downstream ag costs. Normalization was genuinely underway before Thursday — 78 vessels transited the strait on Wednesday, the highest since the war began, though still below prewar averages of 130 or more per day. The drone strike interrupted that trajectory: marine-data firm Windward noted that while the strait remains operationally open, the pace of normalization has slowed, and U.S. Navy-overseen monitors raised the strait’s threat level to “substantial.” Just as consequentially for the still-stranded fleet, the International Maritime Organization halted its evacuation of stranded ships and will not resume until there are guarantees the remaining vessels won’t be attacked — with roughly 500 ships still in the area after about 115 moved out in recent days. Every day that backlog persists keeps a floor under freight, insurance, and fuel costs that feed directly into fertilizer and farm-input pricing. The political overhang. Trump faces domestic pressure to deliver the price relief he promised; he had repeatedly told voters energy costs would fall once the strait reopened, and gasoline prices remain a live political liability ahead of November’s midterms. That creates an incentive to keep the deal alive even through provocations — but also to answer each incident forcefully to avoid looking weak. Vance’s public line that “violence will be met with violence,” paired with his suggestion that Iran “pick up the phone” over disputes, captures the administration’s posture: respond hard, keep talking. Notably, both sides have now established a communications line to prevent further military incidents in the strait — a thin but real guardrail. Bottom line: the truce is intact but unstable. The fighting is less intense than during the war proper, yet the two sides disagree on the single most important term — who controls Hormuz — and that gap is being litigated through live-fire incidents rather than at the table. For ag and energy markets, the practical takeaway is that the easing of the global energy crunch will be non-linear and reversible: traffic is recovering but well below normal, the stranded-vessel backlog is the binding constraint, and any further strike can re-freeze evacuations and re-widen risk premiums overnight. Treat reopening as a process with a wide error band, not a completed event, and watch the daily transit count, the IMO evacuation status, and war-risk insurance rates as the leading indicators through the memorandum’s 60-day window.This analysis reflects developments as of midday June 27; the situation is moving hourly, with Iran’s retaliatory strikes and Saturday’s tanker hit still unfolding. |
| FINANCIAL MARKETS |
—Equities Fri., June 26 and weekly change: U.S. equities finished Friday, June 26, with small losses across the major indexes, but the weekly performance showed a much sharper divide beneath the surface. The Dow slipped 44.51 points, or 0.09%, to 51,876.11, while the Nasdaq fell 60.99 points, or 0.24%, to 25,297.62. The S&P 500 declined 3.47 points, or 0.05%, to 7,354.02. Those closing figures were mild on the day, but the Nasdaq’s 4.60% weekly drop and the S&P 500’s 1.95% weekly decline contrasted with a 0.60% weekly gain for the Dow.
The week’s key message was not broad panic, but a concentrated reset in technology and AI-related leadership. The Nasdaq’s weekly decline was the clearest sign that investors were reassessing valuations and earnings assumptions tied to the AI investment boom. Chip stocks were a major drag, with the tech-heavy index posting its fifth straight daily decline and the Philadelphia Semiconductor Index suffering heavy losses as questions intensified about AI infrastructure spending, margins and the timing of returns on investment.
The Dow’s weekly gain suggests the selling was not a classic risk-off washout across all equities. Instead, the market appeared to rotate toward value, defensive and lower-volatility areas while trimming exposure to the crowded AI trade. That helps explain why the Dow could rise for the week even as the Nasdaq had one of its roughest stretches in more than a year. The S&P 500, sitting between those two profiles, absorbed enough tech weakness to post a weekly loss but avoided the deeper damage seen in the Nasdaq.
The macro backdrop was mixed but not entirely hostile. Falling oil prices and easing Treasury yields helped cushion the broader market by reducing some inflation and cost-pressure concerns. But that support was not enough to offset worries that AI-related capital spending may be outrunning near-term earnings visibility. In other words, investors were not necessarily rejecting equities; they were marking down the most crowded parts of the market.
The bigger implication is that market leadership is being tested. A Dow gain alongside a sharp Nasdaq loss points to a healthier internal rotation if breadth holds, but it also raises the risk that a prolonged tech pullback could eventually spill into broader sentiment, analysts note. For now, they add, the S&P 500’s modest Friday decline masks a more important development: investors are demanding stronger proof that AI spending will translate into durable profits, while still showing willingness to own sectors less exposed to the highest-valuation growth trade.
| Equity Index | Closing Price June 26 | Point Difference from June 25 | % Difference from June 25 | Weekly Change |
| Dow | 51,876.11 | -44.51 | -0.09% | +0.60% |
| Nasdaq | 25,297.62 | -60.99 | -0.24% | -4.60% |
| S&P 500 | 7,354.02 | -3.47 | -0.05% | -1.95% |
| AG MARKETS |
—Ag markets end week with soybeans firmer, wheat and cotton under pressure
Soybeans were the clear relative strength leader, while wheat’s weak weekly close and cotton’s chart damage left those markets vulnerable to follow-through selling
Ag markets ended Friday, June 26, with a mixed but revealing close: soybeans held most of their weekly gains, corn remained sluggish, wheat finished with bearish technical signals, cotton slipped to a two-week low, and livestock futures saw some end-of-week profit-taking. The broader tone was not one of aggressive risk-taking. Instead, traders appeared to be sorting through technical positioning, weather uncertainty, currency movement and recent fund activity heading into the final days of June.
December corn fell 1 1/2 cents Friday to $4.41 1/2, finishing nearer the daily low and down 2 1/2 cents for the week. That was not a constructive weekly performance, but the market did at least show some signs of late-week stabilization after recent weakness. Corn bulls remain on the defensive, with rallies still looking corrective rather than demand driven. The market needs either a stronger weather threat, fresh export demand or a broader technical reversal to generate more confidence. For now, the modest weekly decline reflects a market that has stopped falling hard but has not yet done enough to rebuild bullish momentum.
Soybeans had the best week among the major grain and oilseed contracts. November soybeans slipped just 3/4 cent Friday to $11.56 1/4, closing nearer the daily high and up 13 1/2 cents for the week. September soybean meal fell $1.30 to $302.30 but still gained $1.50 on the week, while September soybean oil rose 16 points to 68.74 cents and finished the week up 136 points. The key technical takeaway is that soybean futures negated a daily-chart downtrend and are now attempting to build a short-term uptrend. That does not mean the market has turned fully bullish, analysts note, but it does show that sellers lost momentum this week. Soybean oil’s strength also helped support the complex, while meal held together well enough to avoid dragging beans lower.
Wheat was the weakest grain sector. September SRW wheat dropped 11 3/4 cents Friday to $5.89 3/4 and lost 24 1/4 cents for the week. September HRW wheat fell 11 cents to $6.19 1/2, hit a 2.5-month low and finished down 31 3/4 cents on the week. September spring wheat fell 9 3/4 cents to $6.05 1/4 and posted the heaviest weekly loss, down 42 1/2 cents. The winter wheat markets closed near their weekly lows, which is technically negative and could invite more chart-based selling early next week. Wheat bulls still need a stronger fundamental catalyst to offset harvest pressure, weak chart structure and the market’s inability to sustain weather-driven rallies.
Cotton futures also ended the week on a defensive note. December cotton fell 59 points Friday to 76.38 cents, hit a two-week low and finished down 329 points for the week. The sharp weekly loss suggests bears have regained chart momentum. A firmer U.S. dollar and lower crude oil prices have also weighed on cotton, since both can pressure export competitiveness and synthetic-fiber-linked demand psychology. Cotton now needs to quickly stabilize or risk inviting additional technical selling.
Livestock futures were mixed on the week despite Friday’s pullback. August live cattle fell $1.40 to $245.825 and finished down 80 cents for the week. August feeder cattle dropped $3.45 Friday to $369.825 but still gained $3.25 for the week. The late-week weakness looked mostly like profit-taking after strong recent performance, especially in feeders. Still, technical traders are now watching overhead resistance closely. The cattle markets remain fundamentally supported by tight supplies, but futures have already priced in a great deal of bullish news, leaving them vulnerable to corrective breaks when buying enthusiasm fades.
August lean hog futures slipped 2.5 cents Friday to $96.575 and were down 15 cents for the week. That was a small weekly loss, but the market held together better than the grain and cotton weakness might suggest. Hog bulls stabilized prices and kept a developing daily-chart uptrend alive, though the market still needs stronger follow-through buying to confirm a more durable recovery.
The weekly scorecard shows soybeans and soybean products as the clear winners, wheat and cotton as the weak links, and livestock markets as mostly consolidative. Heading into next week, analysts say the technical setup matters: soybeans have improved, wheat has deteriorated, cotton is under renewed pressure, and cattle remain supported but more vulnerable to profit-taking near resistance.
| Commodity | Contract Month | Closing Price on June 26 | Difference from June 25 | Weekly Price Change |
| Corn | December | $4.41 1/2 | -1 1/2 cents | -2 1/2 cents |
| Soybeans | November | $11.56 1/4 | -3/4 cent | +13 1/2 cents |
| Soybean meal | September | $302.30 | -$1.30 | +$1.50 |
| Soybean oil | September | 68.74 cents | +16 points | +136 points |
| SRW wheat | September | $5.89 3/4 | -11 3/4 cents | -24 1/4 cents |
| HRW wheat | September | $6.19 1/2 | -11 cents | -31 3/4 cents |
| Spring wheat | September | $6.05 1/4 | -9 3/4 cents | -42 1/2 cents |
| Cotton | December | 76.38 cents | -59 points | -329 points |
| Live cattle | August | $245.825 | -$1.40 | -80 cents |
| Feeder cattle | August | $369.825 | -$3.45 | +$3.25 |
| Lean hogs | August | $96.575 | -$0.025 | -15 cents |
| ENERGY MARKETS & POLICY |
—Oil slumps as Hormuz flows recover despite fresh ceasefire tensions
Market shifts from war-risk premium to supply restoration as Gulf exports rebound
WTI crude oil fell nearly 4% toward $69 a barrel Friday, marking its lowest level since Feb. 27, as traders rapidly unwound the war-risk premium that had built into prices during the U.S./Iran conflict. Brent crude oil dropped over 4% to just below $72. The key market signal was not rhetoric, but shipping flow: transits through the Strait of Hormuz accelerated, vessels were again openly moving through the waterway, and Persian Gulf crude exports were reportedly restored to roughly 75% of prewar levels.
That shift matters because Hormuz is the pressure point in any Middle East oil crisis. Once markets saw tankers moving and Gulf producers resuming loadings, the immediate fear of a major supply disruption faded. Saudi Arabia’s return to tanker loadings at Ras Tanura was especially important because it signaled not just continuity, but a broader regional effort to ramp output back up. The United Arab Emirates, Kuwait and Qatar are also boosting supply, though the shortage of available tankers may slow how quickly all of that crude reaches buyers.
The decline also reflected a changing market narrative. Earlier in the conflict, prices were supported by fears that Iran could threaten tanker traffic, insurance costs, or regional export infrastructure. By Friday, the market was instead focused on barrels returning to the system and on the possibility that several producers may try to make up lost sales quickly. Iraq’s push for a higher OPEC production quota adds to that pressure, suggesting some producers are looking beyond emergency recovery and toward reclaiming market share.
President Donald Trump’s accusation that Iran violated the ceasefire by shooting drones at ships in Hormuz kept a measure of geopolitical risk in the market. But the price action showed traders were treating those incidents as manageable so far, not as proof of a renewed closure threat. Unless attacks intensify or insurers begin pulling coverage for Gulf transit, the physical flow of oil will carry more weight than political warnings.
The more than 10% weekly drop in crude was therefore less a sign of weak demand than a repricing of supply risk. The market is moving from a “what if Hormuz closes?” trade to a “how fast do Gulf barrels return?” trade. That is bearish for crude in the near term, particularly if Saudi Arabia and other producers continue loading aggressively. But the risk premium has not disappeared entirely. Any confirmed damage to commercial vessels, renewed U.S.-Iran escalation, or fresh disruption at key Gulf terminals could quickly put several dollars back into crude prices.
—RVO compliance squeeze is shifting from policy risk to physical supply risk
Elevated RINs signal the market doubts enough biomass-based diesel can be produced, imported and documented to meet 2026-27 targets
Meeting the new Renewable Fuel Standard (RFS) targets will be challenging because the market is no longer dealing only with a paper-compliance issue. EPA’s final Set 2 rule pushed the 2026 and 2027 RVOs to record levels, with total renewable fuel requirements at 25.82 billion RINs in 2026 and 25.98 billion RINs in 2027 before small-refinery-exemption (SRE) reallocation. After EPA’s 70% reallocation of 2023-25 SRE volumes, total applicable volumes rise to 26.81 billion RINs in 2026 and 27.02 billion RINs in 2027.
The biggest pressure point is biomass-based diesel, where the applicable volume climbs to 9.07 billion RINs in 2026 and 9.20 billion RINs in 2027. That explains why RIN prices remain elevated. EIA says RIN prices moved close to record highs this year primarily because the higher 2026-27 mandates require stronger profit incentives for biofuel producers to generate enough qualifying fuel. In plain terms, high RIN prices are doing what the RFS market mechanism is designed to do: ration compliance, pull more gallons into the system and reward those able to blend or produce qualifying fuel. But the same price signal also reflects market skepticism that supply can expand fast enough without drawing down the carryover RIN cushion.
The risk is most acute in the D4 biomass-based diesel pool. Farmdoc’s balance-sheet work shows required D4 net RIN generation rising from 7.10 billion gallons in 2025 to 10.99 billion in 2026 and 11.89 billion in 2027, increases of 55% and 67%, respectively, versus 2025. That is a much larger operational hurdle than the headline RVO increase suggests, because D4 RINs are not just needed to satisfy the biomass-based diesel mandate; they are also expected to help backfill a D6 ethanol RIN deficit created by the 15-billion-gallon conventional biofuel requirement, SRE reallocation and export retirements.
The RIN bank is the key vulnerability. The bank built up when renewable diesel capacity expanded faster than prior RVOs, but it is now being pulled down quickly. Farmdoc projects the D4/D5 bank falling from about 960 million RIN gallons at the end of 2025 to a minimum operating level of roughly 200 million by the end of 2026, leaving little cushion for 2027. Once that buffer is gone, any shortfall in renewable diesel output, biodiesel production, feedstock availability or imports would flow almost directly into higher RIN prices or compliance deficits.
That makes the expanded 2027 mandate particularly difficult. The 2027 biomass-based diesel obligation, including reallocated SRE volumes, is roughly a 40%-plus step-up from the 2025 level, and the operational requirement for D4 RIN generation is even larger. EPA argues the targets are achievable because they reflect recent growth in biodiesel and renewable diesel capacity, with soybean oil, used cooking oil and animal fats expected to support higher output. But EPA also acknowledged that conventional biofuel supply will likely fall short of the implied 15-billion-gallon conventional requirement, meaning additional advanced biofuels will be needed to close the gap.
The market consequence is a tighter linkage between diesel fuel, soybean oil, used cooking oil, tallow, imports and RIN values. If renewable diesel plants run at high utilization and feedstock imports recover, the mandate can be met, but probably with firm feedstock prices and elevated RINs. If imports remain constrained, if 45Z uncertainty slows production, or if plants cannot sustain the necessary run rates, obligated parties will have to lean harder on the shrinking RIN bank. By late 2026, that bank may be effectively exhausted, turning 2027 into a much less forgiving compliance year.
Caveat: Analysts flag key assumptions in Farmdoc’s RIN balance sheet. The debate centers less on the math than on whether D6 backfill, deficit timing and the minimum RIN bank are too conservative. Some analysts say the “holes” in Farmdoc’s RVO balance sheet are mainly assumption driven. The biggest question is whether Farmdoc overstates how many D4 biomass-based diesel RINs will be needed to backfill a conventional ethanol shortfall. If ethanol blending rises, E15/E85 use expands, or the D6 bank is drawn lower, the D4 requirement could be smaller. Others point to deficit carryforwards, small-refinery exemptions, actual fuel demand and export-retirement assumptions as variables that could delay or soften the projected RIN-bank drawdown. But the critique cuts both ways: if imports, renewable diesel output or feedstock availability fall short, the market could be even tighter than Farmdoc projects. The bottom line is that Farmdoc’s balance sheet is a useful warning signal, but its conclusion that the RIN bank could be exhausted by late 2026 depends heavily on several debatable assumptions.
Of note: one industry observer says, “Keep in mind that without the biodiesel blender credit and the unsettled valuations of 45Z, the RIN has to do all of the incentive work. Before, the combination of the tax credit and RIN value delivered the incentivized value. That all rests on the RIN now.”
For agriculture, the policy is supportive but volatile. Stronger biomass-based diesel demand should underpin soybean oil values and encourage crush margins, while also raising the value of alternative fats and oils. But the mandate is now large enough that it can produce strain as well as demand: higher feedstock costs, pressure on livestock users of fats and oils, stronger incentives for imported feedstocks, and greater exposure to regulatory adjustments if EPA concludes the market cannot physically meet the targets. The bottom line is that RVO compliance is moving from a debate over EPA ambition to a test of whether the fuel and feedstock supply chain can scale quickly enough.
| WEATHER |
— NWS outlook: Flooding threat across portions of the Plains and Ohio Valley into Mid-Atlantic on Saturday… …Scattered to widespread severe thunderstorms across portions of the northern Plains and Ohio Valley into the Mid-Atlantic… …Critical to Extremely Critical fire weather conditions continue over portions of the Intermountain West/Four Corners into the weekend… …Heat begins to build over the South into Saturday before a more widespread expansion into the Plains on Sunday as a dangerous central to eastern U.S. heat wave begins.
—Corn Belt heat wave becomes first real crop-weather test
Heat and dryness arrive as corn and soybeans remain mostly favorable, but the western belt and Plains carry the greater risk
The first meaningful stress test of the U.S. growing season is arriving as a major heat wave builds from the Plains into the Corn Belt, bringing above-normal temperatures, elevated humidity and a potentially more troubling dry signal for portions of the western and southwestern Midwest. The heat alone is not yet a full-blown yield threat for most of the corn crop because much of the Midwest is still ahead of the most critical pollination window. But the pattern matters because it can quickly strip away the moisture cushion that has supported generally favorable crop ratings so far.
The National Weather Service’s Weather Prediction Center says a “significant, dangerous heat wave” is expected next week across the central to eastern U.S., with widespread highs in the 90s to low 100s and heat indices approaching or exceeding 105 to 110 degrees in many areas. The agency also flags warm overnight lows, with some record high minimum temperatures possible, which limits nighttime recovery for crops, livestock and people.
For agriculture, the key distinction is timing. Early July heat can be stressful, but it is less damaging than a similar dome in late July if corn is not yet broadly pollinating. USDA’s latest Crop Progress report showed 97% of the corn crop had emerged and 5% was silking as of June 21, while soybeans were 93% emerged and 9% blooming. Corn was rated 68% good to excellent and soybeans 66% good to excellent, suggesting the crop entered this weather event with a generally solid foundation.
That favorable start is why markets may be slow to add a major weather premium unless the heat proves persistent or the rainfall outlook deteriorates. The current crop can handle a short burst of heat in areas with good soil moisture, especially where stands are well-rooted and the crop is not yet pollinating. But prolonged heat with limited rainfall is different. It increases evapotranspiration, pulls moisture from the upper profile, accelerates crop development and can expose uneven root systems left by earlier wet planting conditions.
The risk is not uniform across the Corn Belt. The U.S. Drought Monitor noted that most Midwestern summer crops still had favorable soil moisture reserves, with statewide topsoil moisture rated surplus in Illinois, Missouri, Indiana and Michigan as of June 21. It also said roughly two-thirds of U.S. corn and soybeans were rated good to excellent, reflecting mostly favorable Midwestern growing conditions. But the same report pointed to mixed conditions in the upper Midwest and drought issues in portions of the Plains and High Plains, where rangeland, pasture and winter wheat conditions were already under pressure.
The most important watch zone is likely the western Corn Belt, the central Plains and the southwestern Midwest. The Climate Prediction Center’s 6- to 10-day outlook has elevated probabilities for above-normal temperatures east of the Rockies, with extreme heat concerns in the northern central and eastern U.S. For the 8- to 14-day period, CPC continues to favor above-normal temperatures across most of the country, while below-normal precipitation is slightly favored in parts of the Central Plains and western Great Lakes region. Its state table shows above-normal temperatures for Nebraska, Kansas, Iowa, Missouri, Illinois, Indiana and Ohio in the July 4-10 period, with below-normal precipitation indicated for Nebraska, Kansas, Iowa, Wisconsin and Michigan.
That combination is where the “first test” theme comes in. In parts of Iowa, Nebraska, Kansas, Missouri and the western fringe of the central Corn Belt, a heat dome with hit-and-miss rainfall can move the crop from comfortable to watch-list status quickly. If rains fall on the northern rim of the ridge or along frontal boundaries, the crop could absorb the stress with little lasting damage. If storms miss and high temperatures persist into the second week of July, condition ratings could begin slipping, particularly where soils are lighter, planting was uneven or subsoil reserves are not as deep.
The crop-stage implications are also important. Corn that reaches pollination during a hot, dry spell is vulnerable to poor pollen shed, silk desiccation and reduced kernel set. Soybeans have more time to compensate, but early blooming stress can still reduce node development and push the crop toward a narrower yield path later in the season. Warm nights are an additional concern because they raise plant respiration rates, meaning the crop burns more energy overnight instead of recovering from daytime stress.
Livestock and feed implications also deserve attention. Heat indices over 100 degrees create stress for cattle, hogs and poultry, particularly when overnight temperatures stay elevated. Pastures in drier areas of the Plains and lower Midwest could deteriorate faster, increasing supplemental feed needs. If the heat pattern lingers, forage production and hay regrowth become part of the broader weather story, not just corn and soybean ratings.
Bottom line: this is not yet a national crop scare, but it is a meaningful early season test. The Corn Belt entered the heat wave with generally favorable crop ratings and, in many central and eastern areas, adequate moisture. That argues against immediate yield panic. But the pattern bears close watching because the greatest risk comes from duration. A three- to five-day heat burst is manageable for much of the crop; a two-week pattern of above-normal temperatures and unreliable rainfall across the Plains and western belt would begin to change the market conversation from “beneficial warmth” to “emerging yield risk.”
