Rollins Expected to Unveil $1 Bil. Specialty Crop, Sugar Aid During California Visit

First sales of U.S. beef to China this year reported by USDA | House Ag panel next week to press Rollins on farm economy, trade and input costs | Soybean crush economics bolsters bean prices

Link: Farm Groups Press Treasury for Fast 45Z Rules as Biofuel Industry
         Seeks Market Certainty

Link: Rail Merger Review Hits New Delay as Regulators Seek More Detail
         from Union Pacific and Norfolk Southern

Link: Video: Wiesemeyer’s Perspectives, May 22
Link: Audio: Wiesemeyer’s Perspectives, May 22

TOP STORIES

— USDA’s Rollins expected to unveil specialty crop and sugar aid during California visit: USDA is set to formally roll out its $1 billion Assistance for Specialty Crop Farmers program, covering producers excluded from earlier bridge payments.

— House Ag panel set to press Rollins on farm economy, trade and input costs: USDA Secretary Rollins will testify before the House Ag Committee on June 4, where members are expected to question her on fertilizer prices, beef imports, China trade, and OBBBA implementation.

— USDA raises FY 2026 ag trade outlook, but deficit remains historically large: USDA lifted export forecasts to $176.5 billion but also raised import projections, leaving the projected $29 billion agricultural trade deficit unchanged.

— USMCA agriculture talks set for mid-June as farm groups push Trump administration on market access: The next round of USMCA negotiations will focus heavily on agricultural trade, with dairy, grain, and produce sectors watching closely for changes affecting North American commerce.

— FDA Updates Pesticide Monitoring Program: FDA overhauled its pesticide residue compliance program for the first time since 2011, shifting to risk-based sampling, updated lab methods, and stronger coordination with federal and state partners.

WAR WITH IRAN

— Oil markets slide as Iran peace framework nears completion: Brent crude headed for its steepest monthly decline since 2020 as traders priced in a potential U.S./Iran ceasefire and easing of Strait of Hormuz shipping disruptions.

FINANCIAL MARKETS

— Equities today: U.S. futures modestly higher on ceasefire hopes and strong tech earnings, with Dell shares surging 35% on AI-driven results.

— Equities yesterday: The S&P 500, Dow, and Nasdaq all closed at fresh records.

— Rising fuel prices drive Costco traffic as consumers hunt for savings: Elevated gasoline prices pushed Costco to record fuel sales volumes while broader consumer spending showed signs of slowing.

AG MARKETS

— First sales of U.S. beef to China this year reported by USDA: Weekly Export Sales data showed modest first beef sales to China for 2026, along with pork, sorghum, soybean, and cotton sales activity.

— USDA daily export sale: USDA announced a 192,000 metric ton soybean sale to unknown destinations split across two marketing years.

— Overnight grain markets mixed as soy complex extends rally: Soybeans and soybean oil led overnight gains while wheat weakened on improving U.S. weather forecasts and easing global supply concerns.

— Soybean crush economics bolsters bean prices: Strong crush margins near $3 per bushel and elevated RIN values are reinforcing domestic soybean demand, providing a price floor even amid export uncertainty.

— International grain markets mixed to end week: Russian wheat held firm while European wheat weakened, and Chinese corn futures rose on planting delay concerns.

— Cotton AWP posts sizable decline: The Adjusted World Price for cotton fell to 63.49 cents per pound, though no loan deficiency payment is available for 2025 production.

— Agriculture markets yesterday: Corn, soybeans, soybean meal, soybean oil, and SRW wheat all closed higher; HRW wheat, spring wheat, and livestock futures were mixed to lower.

FARM POLICY

— Rollins unveils ‘Great American Cotton Plan’ as USDA repackages farm bill support: USDA announced a cotton initiative featuring lending priorities, pest research, and a “Plant Not Plastic” consumer campaign, though much of the support was already embedded in the OBBBA.

FERTILIZER

— Corn growers press FTC over fertilizer market power: FTC Chairman Ferguson announced a major industry-wide investigation into fertilizer pricing at a farmer-organized Texas event, drawing praise from farm groups facing a fourth consecutive year of negative returns.

— FTC fertilizer probe draws questions about regulatory neutrality: Ferguson’s appearance at an anti-fertilizer industry event before an investigation conclusion has raised questions about the agency’s perceived objectivity, though analysts say the stronger criticism is one of optics rather than legal bias.

POULTRY INDUSTRY

— USDA delays publication of poultry grower rule freeze: USDA postponed until June 1 a final rule that would delay the Biden-era poultry contracting regulation until December 2027, adding uncertainty for growers and integrators.

ENERGY MARKETS & POLICY

— Friday: Oil prices slide as ceasefire hopes trigger sharp weekly selloff: Brent and WTI posted their steepest weekly losses since April as reports of a tentative U.S./Iran ceasefire and possible Strait of Hormuz reopening drove broad selling.

— Thursday: Oil prices end mixed as Iran ceasefire talks and Hormuz shipping risks drive volatile trading: Crude markets swung on conflicting ceasefire reports, with WTI edging higher and Brent slightly lower as traders awaited confirmation of a 60-day extension.

— NGFA pushes Treasury for practical 45Z biofuel rules: The National Grain and Feed Association urged Treasury to adopt USDA-based carbon accounting tools and flexible traceability standards to ensure grain supply chain participation in the clean fuel tax credit program.

FOOD POLICY & FOOD INDUSTRY

— SNAP enrollment declines sharply among children following OBBBA changes: A Center on Budget and Policy Priorities analysis found roughly 700,000 fewer children receiving SNAP benefits across 12 states since the OBBBA was enacted.

TRANSPORTATION & LOGISTICS

— Analysis: STB signals tougher scrutiny for Union Pacific/Norfolk Southern merger: The Surface Transportation Board unanimously ordered the railroads to provide substantial supplemental information by July 27, signaling a far more demanding review than merger supporters anticipated.

WEATHER

— NWS outlook: Widespread showers and thunderstorms are expected across the Southern U.S. into the weekend, with slight risks of excessive rainfall in the Southeast and severe weather in parts of Nebraska and the Dakotas on Saturday.

— Western Corn Belt rains improve crop outlook while eastern Belt faces dryness stress: A persistent omega block weather pattern is delivering 2–4 inches of rainfall to the western Corn Belt while keeping the eastern Corn Belt largely dry for at least another week.

— El Niño threat adds new pressure to global energy and food markets: Forecasters see a high probability of El Niño returning this year, raising concerns over crop stress, energy demand, and supply chain disruptions that compound ongoing Iran-related pressures.

— USDA report highlights expanding drought risks, uneven rainfall patterns: USDA’s latest water and climate update shows widespread moderate-to-exceptional drought across the western U.S., central Plains, and Southeast, while NOAA forecasts a below-normal Atlantic hurricane season due to emerging El Niño conditions.

— India’s weakening monsoon outlook raises inflation and growth risks: India’s rainfall estimate was reduced to 90% of the long-term average, with a 60% probability of a deficient monsoon, raising concerns about food inflation, rural demand, and Reserve Bank of India policy options.
 

—Oil markets slide as Iran peace framework nears completion

Brent crude heads for largest monthly drop since 2020 as traders bet on easing Middle East supply risks

Oil markets extended their sharp decline Friday as traders increasingly priced in the possibility of a broader U.S./Iran peace agreement that could eventually restore more normal energy flows through the Middle East and reduce fears of a prolonged supply disruption. Brent crude, the global benchmark, fell toward $91 per barrel and remained on track for its steepest monthly decline since 2020, reflecting a rapid unwinding of the war-risk premium that had driven prices sharply higher earlier this spring.

The latest pressure on crude futures followed reports that U.S. and Iranian officials were moving closer to finalizing a ceasefire and broader diplomatic framework tied to the three-month conflict that severely disrupted shipping through the Strait of Hormuz. While negotiators reportedly reached preliminary understandings on security arrangements and phased de-escalation measures, several key issues remain unresolved, including the pace of restoring commercial shipping traffic through Hormuz and the sequencing of sanctions relief.

Markets have increasingly shifted from focusing on worst-case supply-loss scenarios toward assessing how quickly oil exports and tanker movements could normalize if the ceasefire holds. The Strait of Hormuz remains central to the outlook because roughly one-fifth of global oil and liquefied natural gas flows typically transit through the narrow waterway. Although shipping volumes have improved modestly from wartime lows, flows remain well below pre-conflict levels.

The sharp reversal in crude prices highlights how aggressively traders had previously priced geopolitical risk into the market. Earlier this month, fears of a prolonged disruption in Gulf energy shipments pushed Brent well above $100 per barrel and raised concerns about a renewed inflation shock for the global economy. Meanwhile, expectations of easing tensions have triggered broad liquidation across energy markets, with hedge funds and momentum traders reducing bullish positions tied to Middle East supply concerns.

Despite the recent selloff, analysts cautioned that the oil market remains vulnerable to renewed volatility because major details of the agreement are still unresolved. Questions remain over enforcement mechanisms, maritime security guarantees, the status of Iranian export infrastructure, and how quickly insurers and shipping firms would fully return to the region. Any breakdown in negotiations or renewed attacks near shipping lanes could quickly restore a geopolitical premium to crude prices.

Meanwhile, falling oil prices are easing some concerns about inflation pressures that had resurfaced during the conflict. Lower crude and fuel costs could help moderate gasoline and diesel prices heading into summer, potentially reducing pressure on central banks that had worried energy costs could complicate the inflation outlook. Traders are now increasingly focused on whether stabilizing energy markets could reinforce expectations for eventual interest rate cuts later this year.
 

—Equities today: U.S. equity futures are modestly higher as investors await confirmation of a reported U.S./Iran ceasefire agreement, while another round of strong technology earnings continues to support sentiment. There were no overnight developments on the reported U.S./Iran ceasefire, though multiple media reports indicate an agreement has been reached and is awaiting approval from President Donald Trump.

In Asia, Japan +2.5%. Hong Kong +0.7%. China -0.7%. India -1.4%.

In Europe, at midday, London +0.3%. Paris +0.8%. Frankfurt +0.1%.

On the earnings front, Dell became the latest AI-related technology company to deliver stronger-than-expected results, with shares surging 35% in premarket trading.

Markets will remain focused on geopolitical developments today, particularly any confirmation from Trump regarding the ceasefire agreement. Much of the potential deal appears to already be priced into markets, meaning formal confirmation may not spark a major rally. However, any indication the agreement has been rejected could create modest downside pressure for equities.

Outside of geopolitics, investors will also monitor comments from several Federal Reserve officials, including Michelle Bowman at 9:10 a.m. ET, Patrick Paulsen at 9:15 a.m. ET, and Mary Daly at 12:40 p.m. ET. Any notably hawkish remarks could create a mild headwind for stocks.

—Equities yesterday: The S&P 500 the and the Dow all notched fresh records.

—Rising fuel prices drive Costco traffic as consumers hunt for savings

Higher gasoline costs boost warehouse club fuel sales and memberships, even as broader consumer spending shows signs of slowing

Rising fuel prices helped fuel strong quarterly results for Costco Wholesale, as consumers increasingly turned to the retailer’s discounted gasoline offerings in an effort to manage higher household energy costs.

The company reported fiscal third-quarter revenue of $70.53 billion, topping market expectations of $69.81 billion, with executives pointing to unusually strong traffic at Costco fuel stations across the U.S. CEO Ron Vachris said the final five weeks of the quarter marked the highest fuel sales volumes in company history, underscoring how elevated gasoline prices are reshaping consumer shopping patterns.

Vachris noted that many customers using Costco fuel stations were first-time fuel buyers at the retailer, suggesting the recent surge in gasoline prices is pulling in additional members seeking lower-priced alternatives. Costco’s fuel business has historically operated as a traffic driver rather than a major profit center, but periods of high energy inflation tend to amplify its competitive advantage against traditional gasoline retailers.

The results also highlight the broader economic impact of persistently high fuel costs. While Costco benefited from increased traffic, new federal Personal Income and Outlays data released Thursday suggested consumers may be becoming more cautious elsewhere. Consumer spending growth slowed notably in April compared to March, signaling that higher energy expenses may be starting to crowd out discretionary purchases.

Fuel expenditures were among the largest contributors to the increase in household spending, reinforcing concerns that elevated energy prices are acting as an inflationary tax on consumers. Economists continue to watch whether sustained gasoline costs — particularly amid uncertainty surrounding Middle East oil flows and the Strait of Hormuz — will further pressure household budgets heading into summer.

Meanwhile, Costco’s performance suggests warehouse retailers with strong fuel discount programs may continue gaining market share if energy prices remain elevated. Lower-priced gasoline not only drives repeat traffic but also encourages additional in-store purchases, helping offset weakness in other retail categories where consumers appear increasingly price sensitive.

—First sales of U.S. beef to China this year reported by USDA. Weekly Export Sales activity from USDA for the week ended May 21 noted sales activity to China including net sales of 3 MT of beef for delivery in 2026, the first such sales this year with 196 MT of sales carried into 2026 from 2025. The report also noted net sales of 1,773 MT of pork for 2026 delivery. On the crop side, net sales of 3,028 MT of sorghum, 4,312 MT of soybeans and 24,889 running bales of upland cotton were reported for 2025/26.

—USDA daily export sale: 192,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 60,000 metric tons is for delivery during the 2025/2026 marketing year, and 132,000 metric tons is for delivery during the 2026/2027 marketing year.

—Overnight grain markets mixed as soy complex extends rally

Soybeans and soybean oil lead gains overnight while wheat markets weaken on improving U.S. weather forecasts and easing global supply concerns 

Grain futures traded mixed overnight heading into Friday’s session, with strength in the soybean complex offset by continued pressure in wheat markets as traders weighed improving weather forecasts across parts of the U.S. Corn Belt and Plains against ongoing uncertainty surrounding global trade flows and biofuel demand.

July corn futures slipped 2 3/4 cents overnight to $4.53 per bushel as traders monitored updated rainfall forecasts for portions of the western Corn Belt. Forecasts calling for improving moisture in Nebraska and parts of the northern Plains reduced some near-term weather premium, although concerns persist for drier areas in the eastern Corn Belt where topsoil moisture continues to decline.

The soybean complex remained firm overnight, supported by strong domestic crush economics and continued strength in soybean oil (see related item below). July soybeans rose 3 3/4 cents to $11.98 1/4 per bushel, while July soybean oil gained 0.75 cents to 77.45 cents per pound. July soybean meal futures were slightly weaker, down 30 cents to $333.80 per short ton.

Soybean oil continues to receive support from elevated renewable diesel and biofuel demand expectations. Traders also note that higher Renewable Identification Number (RIN) values have reinforced the market perception that domestic soybean oil remains the primary available feedstock for U.S. biofuel production, particularly as uncertainty lingers over the availability of imported feedstocks.

Corn futures continue to find underlying support from strong domestic ethanol demand and concerns that any weather adversity later in the growing season could quickly tighten supply expectations. However, improving near-term rainfall forecasts have limited upside momentum for now.

Wheat futures were under pressure overnight, with July Chicago soft red winter wheat down 1 1/4 cents to $6.22 3/4 per bushel and July Kansas City hard red winter wheat falling 5 cents to $6.60 1/4. Traders pointed to improving harvest weather in portions of the Southern Plains and continued competition from Black Sea wheat supplies.

Russian wheat export values remain relatively competitive on the global market despite ongoing geopolitical tensions, while improving crop prospects in parts of Europe have also weighed on world wheat sentiment. Meanwhile, U.S. exporters continue to face stiff competition in major global tenders.

The grain trade will continue to monitor weekend weather forecasts, export demand signals, and any additional developments tied to global trade negotiations and energy markets, particularly following recent volatility in crude oil and biofuel markets tied to the evolving U.S./Iran situation.

—Soybean crush economics bolsters bean prices

Strong soy oil demand and elevated RIN values reinforce domestic crush incentives

The soybean market continues to find underlying support from exceptionally strong processing economics, as crush margins remain in the high $3-per-bushel range — levels that encourage aggressive domestic soybean demand from processors and renewable fuel producers. The rally in soybean product values, particularly soy oil, has become one of the key bullish drivers for the broader soybean complex.

At the center of the strength is the renewable diesel and biofuel sector, where soybean oil has emerged as the dominant available feedstock amid tightening supplies of alternative foreign oils and waste-based materials. Traders note that Renewable Identification Number (RIN) credits have moved sharply higher in recent sessions, signaling that the market increasingly believes imported feedstocks such as used cooking oil and other foreign biofuel inputs are either constrained, more expensive, or less available to U.S. refiners and renewable diesel producers.

That shift matters because renewable diesel economics are heavily tied to both feedstock availability and RIN values. Higher RIN prices improve blending economics and effectively increase the value of soybean oil in the fuel supply chain. As a result, domestic crushers are incentivized to maximize soy oil production, which in turn boosts demand for raw soybeans.

Soy oil has consequently become the primary feedstock supporting renewable diesel expansion for now, particularly as policy uncertainty and trade frictions continue to cloud the outlook for imported materials. The market is increasingly viewing the U.S. soybean complex as the most reliable near-term source of low-carbon vegetable oil supply.

Meanwhile, soybean meal demand remains relatively steady, allowing processors to maintain highly profitable crush margins even as bean futures have recovered from earlier lows. Historically, crush margins approaching $4 per bushel are considered very supportive for soybean prices because they encourage processors to continue bidding aggressively for physical supplies.

The strong crush environment is also helping offset some broader macro uncertainty tied to export competition and South American production prospects. Even if export demand fluctuates, the domestic processing sector is currently providing a substantial demand floor underneath the soybean market.

Meanwhile, traders are increasingly watching whether elevated crush profitability leads to further expansion in U.S. processing capacity utilization during the heart of the summer growing season. If renewable diesel demand remains firm and RIN values stay elevated, the soybean market could continue to derive support from product-led buying even during periods of favorable crop weather.

The dynamic also reinforces the broader structural shift underway in agriculture, where energy policy and biofuel demand are becoming increasingly important drivers of row-crop pricing. For soybean producers, the current environment suggests that domestic industrial demand — rather than export demand alone — is now playing a much larger role in establishing price support for the market.

—International grain markets mixed to end week

Russian wheat holds firm while European values weaken amid weather concerns in China

International grain markets finished the week mixed Friday as stronger Russian wheat values offset weakness in European wheat futures, while Chinese grain markets firmed on concerns about delayed spring planting and excessive rainfall in key growing regions.

Paris milling wheat futures fell €1.75 per metric ton to €208.50/MT ($236.90/MT), reflecting continued pressure from improved European wheat supplies and competitive Black Sea export offers. Using standard conversion factors, the Paris wheat price equates to roughly $6.44 per bushel in U.S. terms.

Russian FOB wheat values remained steady to firm, with June 12.5% protein wheat quoted at $247/MT FOB and new crop offers near $245/MT. That translates to approximately $6.72 to $6.78 per bushel on a U.S. equivalent basis, keeping Russian wheat competitively priced into North African and Middle Eastern export channels despite higher Black Sea freight and insurance costs.

Chinese grain markets recovered modestly Friday following reports that excessive rainfall and delayed spring planting could trim production potential in portions of northeastern China. Dalian July corn futures rose the equivalent of 4 cents to finish near $8.62 per bushel, maintaining a substantial premium to Chicago corn futures and continuing to support Chinese domestic feed grain values.

Meanwhile, August Malaysian palm oil futures slipped 2 ringgit to close at 4,535 ringgit per metric ton. That equates to roughly $1,060/MT, or about 48.1 cents per pound in U.S. equivalent terms. Palm oil futures remained under pressure from weaker crude oil markets and expectations that global vegetable oil supplies will remain adequate through the summer.

The divergence between Russian and European wheat markets continues to highlight the importance of Black Sea export competitiveness. Russian wheat values have remained resilient due to steady export demand and ongoing logistical concerns in the region, while European wheat futures continue facing pressure from larger available supplies and sluggish export demand.

Global grain traders also continue monitoring weather developments across major Northern Hemisphere production regions. Excessive rainfall concerns in China, improving moisture across portions of the western U.S. Corn Belt, and ongoing Black Sea weather variability remain central drivers for short-term price direction heading into June.

—Cotton AWP posts sizable decline. The Adjusted World Price (AWP) for cotton declined to 63.49 cents per pound, effective today (May 29), down 68.88 cents per pound the prior week. Despite the downturn, this still results in no LDP available for 2025 cotton production as the availability to claim and LDP on that production ends May 31.

—Agriculture markets yesterday:

Source: Market close data, May 28, 2025

—Rollins unveils ‘Great American Cotton Plan’ as USDA repackages farm bill support

Administration highlights cotton-focused lending, pest research, and “Plant Not Plastic” campaign amid continued financial pressure on growers

USDA Secretary Brooke Rollins on Thursday unveiled what USDA called the “Great American Cotton Plan,” a broad initiative designed to bolster the U.S. cotton sector through financing support, research investments, and a consumer-focused marketing campaign promoting American-grown cotton products.

Much of the initiative, however, largely reinforces support mechanisms and commodity assistance already enacted through Republicans’ One Big Beautiful Bill Act (OBBBA) last summer, rather than introducing sweeping new subsidy programs or direct aid for producers.

The administration said USDA will now prioritize cotton processors and textile manufacturers for financing through the Business and Industry Guaranteed Loan Program, a move aimed at strengthening domestic textile supply chains and encouraging more value-added processing within the United States.

USDA also announced that its Agricultural Research Service (ARS) has launched expanded research efforts targeting the cotton jassid pest, an invasive insect that has increasingly threatened U.S. cotton acreage. The pest, which damages cotton leaves and reduces yields, has become a growing concern for producers as infestations spread into more production regions.

Meanwhile, USDA and other federal agencies will support a new “Plant Not Plastic” initiative intended to encourage consumers to purchase clothing and textile products made from American cotton rather than petroleum-based synthetic fibers. The campaign reflects a broader administration effort to frame natural fibers as both environmentally preferable and supportive of domestic agriculture and manufacturing.

The cotton package arrives as U.S. cotton producers continue to face weak prices, rising input costs, and pressure from foreign competition. Cotton prices have remained under strain amid sluggish global textile demand and economic uncertainty in key importing nations, while growers have also dealt with weather volatility and higher financing costs.

The administration is attempting to position the cotton initiative as part of a broader “America First” manufacturing and rural economic agenda, linking farm policy with domestic industrial policy and supply-chain resiliency goals. The emphasis on textile manufacturing also reflects longstanding concerns within the cotton industry about the steady decline of U.S. spinning and processing capacity over several decades.

Still, many of the financial underpinnings for cotton support were already embedded in the OBBBA, which expanded commodity program assistance and provided additional support tools for producers facing prolonged margin pressure. As a result, the latest announcement appears aimed as much at signaling political support for cotton-producing states as at unveiling entirely new policy authorities.

The “Plant Not Plastic” messaging could also place the administration more directly in competition with synthetic fiber producers and petrochemical interests, particularly as the White House simultaneously advances broader energy and manufacturing priorities tied to domestic fossil fuel production.

Details lacking: USDA did not immediately provide additional details on funding levels, implementation timelines, or how cotton-sector loan applications would receive priority treatment under the Business and Industry program.

—Corn growers press FTC over fertilizer market power

FTC Chairman Andrew Ferguson announces industry-wide investigation as farm groups intensify calls for fertilizer competition reforms and lower input costs

A coalition of corn organizations and commodity groups escalated pressure on the fertilizer industry Thursday during a high-profile listening session in Texas, where Andrew Ferguson announced the Federal Trade Commission (FTC) has already launched a sweeping investigation into fertilizer pricing practices and market concentration.

Speaking before farmers representing 18 states at a North Texas farm event titled “Fed Up: Fertilizer Cartel Profits off Farmers’ Backs and Your Grocery Bill,” Ferguson said the FTC had begun a “major industry-wide investigation” into the “precipitous rise” in fertilizer prices and confirmed the probe includes compulsory legal process. “USDA data has shown the single largest increase in input costs of farmers across the United States since 2020 has come from fertilizer,” Ferguson said, according to the event release. “These continued price increases are not something our nation, much less our farmers, can continue to ignore.”

The announcement drew immediate praise from farm organizations, including the National Corn Growers Association. In a statement following the event, NCGA President Jed Bower said the FTC investigation comes as corn growers face a fourth consecutive year of negative returns while continuing to absorb historically high fertilizer costs.

Bower said NCGA is pushing to address what it views as structural competition problems in the fertilizer sector through measures including the Fertilizer Transparency Act, Fertilizer Research Act, and Homegrown Fertilizer Act.

He also renewed calls for the Trump administration to remove countervailing duties on phosphate fertilizer imports from Morocco, arguing the tariffs have constrained supplies and elevated costs for farmers.

The Texas event itself featured increasingly sharp rhetoric aimed at major fertilizer manufacturers. Organizers specifically cited Mosaic, Nutrien, CF Industries, and Koch as dominant players whose pricing power has contributed to rising input costs. Texas Corn Producers Chairman Aaron Martinka described the situation as a “fertilizer cartel” that has “squeezed American agriculture to the breaking point.”

According to figures highlighted during the event, fertilizer prices have climbed more than 150% since 2020, substantially outpacing overall inflation, while U.S. net farm income has fallen 31% from its 2022 peak.

Organizers also pointed to worsening financial stress in farm country, citing rising Chapter 12 farm bankruptcies across several states and regions. Iowa farm bankruptcies rose 220% year-over-year in 2025, while Arkansas filings doubled and Georgia filings increased 145%, according to event materials citing American Farm Bureau Federation data.

Farmers participating in the panel discussion urged regulators to aggressively examine fertilizer pricing, supply concentration, and competitive barriers in the marketplace. Iowa farmer Lance Lillibridge, a former state corn association president, said producers wanted the FTC investigation to “follow the evidence wherever it leads.”

The fertilizer issue has become one of the most politically sensitive agricultural input debates in Washington. Grower groups increasingly argue that consolidation among major fertilizer suppliers has limited competition and reduced market flexibility during supply disruptions. Domestic fertilizer producers, meanwhile, maintain that trade protections and strong domestic manufacturing are necessary to preserve U.S. production capacity and national supply security.

A key flashpoint remains phosphate fertilizer imports from Morocco. Farm organizations argue countervailing duties imposed in recent years reduced access to lower-cost imports and tightened supplies during a period of global nutrient volatility. Domestic producers counter that the tariffs address unfair subsidization and protect U.S. phosphate manufacturing from foreign competition.

Perspective: The FTC’s decision to formally investigate the fertilizer industry marks a significant escalation in what had largely been an agricultural policy dispute into a broader antitrust and consumer-cost issue. The political framing is also evolving. Farm groups are no longer presenting fertilizer inflation solely as a farm profitability problem — they are increasingly tying it directly to grocery prices, food inflation, and rural economic stress.

That strategy could broaden political support for federal scrutiny. By emphasizing both farm bankruptcies and consumer food costs, commodity groups are attempting to place fertilizer pricing squarely within the Trump administration’s broader agenda of combating inflation and challenging concentrated market power in critical industries.

The aggressive language used at the Texas event — including repeated references to a “fertilizer cartel” — reflects growing frustration among producers after years of elevated input costs. Fertilizer remains one of the largest single operating expenses for corn farmers, meaning prolonged price inflation has had an outsized impact on margins during a period of weaker commodity prices.

Still, the underlying economics are complex. Fertilizer markets are globally interconnected and inherently concentrated due to high capital costs, resource geography, and dependence on natural gas and mineral reserves. Nitrogen production depends heavily on natural gas economics, phosphate reserves are geographically concentrated, and potash production is dominated by a relatively small number of global suppliers. Those realities mean even an aggressive FTC probe may have limited ability to fundamentally reshape pricing dynamics in the near term.

The Morocco phosphate dispute illustrates the policy balancing act facing the administration. Removing countervailing duties could increase import competition and potentially ease prices for farmers, but it would also intensify pressure on domestic producers that have argued the tariffs are necessary to counter subsidized imports. That tension pits farm-state political interests against domestic manufacturing priorities — two constituencies the Trump administration has sought to support simultaneously.

Meanwhile, fertilizer affordability is increasingly becoming intertwined with the broader farm economy debate heading into the next phase of farm bill and agricultural policy discussions. With crop margins compressed, borrowing costs elevated, and bankruptcies climbing in some regions, pressure is likely to grow for both regulatory and legislative action aimed at input cost relief.

—USDA delays publication of poultry grower rule freeze

Agency pushes Federal Register notice to June 1 as industry uncertainty continues around Biden-era poultry contracting regulations

USDA has delayed publication of a final rule that would postpone implementation of the Biden administration’s controversial poultry contracting regulation, adding another layer of uncertainty for poultry growers and integrators already preparing for the rule’s scheduled July 1, 2026, effective date.

USDA had been expected to publish the final rule today in the Federal Register, but the agency instead requested the document be withdrawn without publicly explaining the reason for the last-minute delay. The rule is now scheduled for publication June 1. Link

The action centers on the Biden-era “Poultry Grower Payment Systems and Capital Improvement Systems” rule, which was finalized under the Packers and Stockyards Act framework and aimed at increasing transparency and fairness in poultry grower compensation systems. The regulation targeted practices tied to tournament-style payment systems and capital investment requirements imposed on contract growers by poultry companies.

Under the Trump administration proposal now moving forward, USDA would delay implementation of that rule until Dec. 31, 2027, pushing back the original July 1, 2026, compliance deadline by roughly 18 months.

USDA’s Agricultural Marketing Service said the delay is intended to provide “time for further consideration of actions that may be taken regarding the disposition of the rule,” signaling the administration may still revisit whether to substantially revise or potentially rescind the underlying regulation altogether.

The agency also pointed to congressional direction included in the Fiscal Year 2026 USDA funding measure that encouraged delaying implementation. USDA further cited “significant estimated costs” and unresolved legal and policy concerns raised by commenters regarding the payment systems regulation.

The administration received more than 2,800 public comments on the proposed delay. AMS said it is finalizing the delay without substantive changes from the proposal and will accept additional comments for 30 days after publication.

The dispute over the poultry grower rule reflects a broader long-running fight between contract poultry growers, who have argued tournament payment systems can unfairly disadvantage producers, and poultry integrators, which contend the regulations would increase costs, invite litigation, and disrupt efficient production arrangements.

Supporters of the Biden-era rule argued it would provide growers with greater protections against discriminatory payment practices and excessive capital upgrade demands from processors. Meanwhile, industry groups representing poultry companies warned the regulation could fundamentally alter contracting systems that dominate the modern poultry sector.

The Trump administration’s move to delay the rule aligns with its broader deregulatory approach toward livestock and poultry markets and reflects ongoing skepticism among Republicans about the scope of USDA authority under the Packers and Stockyards Act.

The unexplained decision to postpone publication until June 1 may further fuel speculation about internal administration deliberations over whether the rule should merely be delayed or ultimately withdrawn entirely.

—Friday: Oil prices slide as ceasefire hopes trigger sharp weekly selloff

Brent and WTI post biggest weekly declines since April as traders weigh prospects for extended U.S.-Iran truce and eventual reopening of the Strait of Hormuz

Oil futures fell 1.5% Friday and were headed for their steepest weekly losses since early April after reports that the United States and Iran reached a tentative agreement to extend a ceasefire and potentially ease restrictions on shipping through the Strait of Hormuz.

Brent crude futures for July delivery, which expire today, fell $1.30, or 1.4%, to $91.37 per barrel. The more actively traded August Brent contract dropped $1.63, or 1.76%, to $91.07.

U.S. West Texas Intermediate crude futures declined $1.55, or 1.74%, to $87.35 per barrel.

The weekly losses have been substantial. Brent has fallen roughly 11% this week, marking its sharpest weekly decline since the week ending April 6, while WTI has dropped nearly 10% for its largest weekly loss since the week ending April 13.

The sharp reversal reflects growing expectations that tensions between Washington and Tehran may continue to ease after Reuters reported Thursday that the two sides had reached a tentative agreement to extend the ceasefire and gradually lift shipping restrictions through the Strait of Hormuz. The agreement still requires approval from President Donald Trump, while Iranian state media insisted no final deal had yet been completed.

Markets have remained highly volatile as traders react to conflicting headlines surrounding the Iran conflict and the future of the Strait of Hormuz, which before the war handled roughly one-fifth of global oil and liquefied natural gas flows. Both Brent and WTI have experienced intraday swings of as much as $6 in recent sessions as investors rapidly reposition around geopolitical developments.

Even with optimism surrounding a potential reopening of Hormuz, shipping activity through the key maritime chokepoint remains far below pre-war levels. Analysts at ING said reopening the waterway would provide immediate relief to energy markets, though they cautioned that a full normalization of traffic could take time.

The disruption has already had significant global consequences. Japan, one of the world’s largest importers of Middle Eastern crude, reported a 66% year-over-year drop in oil imports last month as shipping constraints severely limited flows from the region.

Fundamental supply data continued to support prices beneath the surface. The U.S. Energy Information Administration reported Thursday that domestic crude, gasoline, and distillate inventories all declined last week as refinery activity and consumer demand increased. U.S. crude exports, however, fell by 1.16 million barrels per day to 4.4 million barrels per day, underscoring the continuing disruption to global trade flows.

—Thursday: Oil prices end mixed as Iran ceasefire talks and Hormuz shipping risks drive volatile trading

Crude markets swung sharply on conflicting reports over a possible 60-day ceasefire extension between the United States and Iran, while traders remained focused on the pace of any reopening of the Strait of Hormuz

Oil futures finished mixed Thursday after another volatile session dominated by geopolitical headlines tied to the U.S./Iran conflict and uncertainty surrounding shipping flows through the Strait of Hormuz.

July Brent crude, which expires today, settled down 58 cents, or 0.6%, at $93.71 per barrel, while the more actively traded August Brent contract traded modestly higher late in the session at $92.97.

U.S. West Texas Intermediate crude rose 22 cents, or 0.3%, to close at $88.90 per barrel.

Markets reacted throughout the day to conflicting signals over efforts to extend the fragile ceasefire that has temporarily paused the three-month conflict between the United States and Iran. Reports indicated negotiators had reached a tentative agreement to extend the ceasefire another 60 days, though the proposal still requires approval from President Donald Trump. Meanwhile, Iran’s Tasnim news agency reported that no formal memorandum of understanding had yet been finalized.

Analysts said traders remain highly sensitive to any indication that the Strait of Hormuz could reopen more fully to commercial shipping traffic. Vessel movements through the critical energy chokepoint remain well below pre-war levels, continuing to raise concerns about global crude and fuel supply disruptions.

Despite supportive U.S. inventory data, geopolitical developments continued to overshadow traditional supply-and-demand fundamentals. U.S. government data released Thursday showed domestic crude inventories fell by 3.3 million barrels last week, marking the sixth consecutive weekly drawdown. However, the decline came in below analyst expectations for a 4.1-million-barrel reduction. Gasoline and distillate fuel inventories also declined during the reporting period.

Analysts said the market’s reaction function has become increasingly tied to diplomatic and military developments in the Middle East, with traders placing less emphasis on inventory figures and more on the risk of renewed disruptions to energy flows through Hormuz.

—NGFA pushes Treasury for practical 45Z biofuel rules

Grain industry group urges USDA-based carbon accounting and flexible traceability standards as Treasury finalizes clean fuel tax credit framework

The National Grain and Feed Association (NGFA) this week urged the Treasury Department and IRS to adopt a practical and agriculture-focused approach to implementing the Section 45Z Clean Fuel Production Credit, warning that overly burdensome compliance requirements could undermine participation across the grain supply chain.

During a three-day public hearing on proposed 45Z regulations, NGFA Vice President of Feed and Sustainability Berit Foss testified that the success of the clean fuel tax credit will depend on whether federal agencies create a transparent and workable framework for agricultural producers, grain handlers, and biofuel feedstock suppliers. The hearing brought together stakeholders from the agriculture, biofuels, energy, and environmental sectors, including the Renewable Fuels Association, Illinois Soybean Association, National Sorghum Producers, and the National Oilseed Processors Association.

NGFA argued Treasury should formally recognize USDA’s existing Technical Guidelines for Crops Used as Biofuel Feedstocks and the Feedstock Carbon Intensity Calculator, known as FD-CIC, contending that both tools already provide science-based and peer-reviewed methodologies designed around real-world farming practices and grain marketing systems.

The organization also emphasized the scale of the grain and feed industry, noting it supports more than 1.16 million jobs and generates over $401 billion in annual economic output nationwide. NGFA said implementation rules must account for the realities of how grain moves through the U.S. bulk commodity system, where crops are routinely aggregated, blended, stored, and transported through shared infrastructure.

A major focus of NGFA’s testimony centered on traceability requirements. The group warned that rigid or overly prescriptive documentation standards could become unworkable for grain elevators, merchandisers, processors, and exporters that rely on commingled grain handling systems. NGFA argued that if compliance costs become too high or operationally impractical, participation in the 45Z program could be limited, reducing the scalability of low-carbon fuel production and weakening demand opportunities for U.S. farmers.

The debate over 45Z implementation has become increasingly important for agricultural groups and the biofuels industry because the credit is expected to play a central role in future demand growth for corn oil, soybean oil, sorghum, ethanol feedstocks, renewable diesel, and sustainable aviation fuel. Farm organizations have been pressing Treasury and the IRS to finalize rules that maximize farmer participation while preserving flexibility for existing commodity marketing systems.

—SNAP enrollment declines sharply among children following OBBBA changes

Center on Budget and Policy Priorities says early state data show roughly 700,000 fewer children receiving benefits in 12 reporting states

A new analysis from the Center on Budget and Policy Priorities (link) says participation by children in the Supplemental Nutrition Assistance Program (SNAP) has fallen significantly since Republicans’ One Big Beautiful Bill Act (OBBBA) became law, raising concerns among anti-hunger advocates about access to food assistance amid new eligibility and administrative requirements.

The CBPP blog found that, across 12 states with available data, approximately 700,000 fewer children are receiving SNAP benefits compared to enrollment levels before enactment of the law. The group argued the decline reflects a combination of procedural hurdles, changes to eligibility determinations, and increased state administrative burdens tied to implementation of the legislation.

The report is likely to intensify the political debate surrounding the OBBBA’s SNAP provisions, which were among the most contentious elements of the law during congressional negotiations. Republicans argued the changes were necessary to improve program integrity, reduce improper payments, and encourage workforce participation, while Democrats and anti-hunger organizations warned the provisions could reduce access for low-income households and families with children.

The law included expanded state cost-sharing requirements tied to SNAP error rates, stricter verification procedures, and broader work-related compliance standards. Senate Ag Committee Democrats had previously pushed to soften or delay some of the state cost-sharing requirements, warning that states facing budget pressures could respond by tightening enrollment procedures or reducing outreach efforts.

The CBPP analysis did not conclude that all of the enrollment declines were directly caused by eligibility losses. Instead, the group said many households may be struggling with paperwork, recertification requirements, or delays in processing cases as states adjust to the new system. Anti-hunger advocates have long argued that administrative complexity can suppress participation even among households that remain eligible for benefits.

The findings also arrive as food inflation and broader household cost pressures continue to weigh on lower-income consumers. While inflation has moderated from peak levels seen earlier in the decade, many food categories remain elevated relative to pre-pandemic levels, keeping pressure on household grocery budgets and increasing reliance on nutrition assistance programs.

Republicans have defended the SNAP reforms as part of a broader effort to rein in federal spending and strengthen oversight of benefit programs. Supporters of the law have argued that long-term program sustainability requires tighter administration and greater accountability for states with high payment error rates.

Meanwhile, the enrollment decline could become a focal point in the coming farm bill debate, where SNAP funding and nutrition policy historically account for the majority of spending within omnibus agriculture legislation. Farm-state lawmakers and nutrition advocates are already preparing for renewed fights over benefit levels, state funding responsibilities, and eligibility standards as Congress works toward a broader reauthorization package.

—Analysis: STB signals tougher scrutiny for Union Pacific/Norfolk Southern merger

Grain industry, farm groups and regulators press railroads for detailed commitments as review process intensifies

The proposed merger between Union Pacific and Norfolk Southern appears headed into a far more demanding review process than many merger supporters initially anticipated, as the Surface Transportation Board signaled (link) it wants significantly more operational detail before moving the case forward. (Link to special report and link to STB statement.)

In accordance with STB merger rules, the board conditionally accepted the railroads’ revised application on May 28, but ordered the companies to provide substantial supplemental information by July 27 before a procedural schedule will even be established.

According to the STB order, Union Pacific and Norfolk Southern must provide additional detail on enhancing competition, protections for 2-to-1 and 3-to-2 shippers, service assurance plans, gateway and car supply issues, market share projections, downstream merger impacts, passenger rail implications, and underlying workpaper questions.

The decision suggests regulators are no longer satisfied with broad assurances from the railroads about improved efficiency and service benefits. Instead, the board appears to be demanding measurable operational evidence showing exactly how the merger would preserve competition and protect rail customers — particularly agricultural shippers heavily dependent on captive rail service.

Industry observers said the message from regulators is increasingly clear: generalized promises and optimistic projections will not be enough to secure approval for what would become the nation’s first coast-to-coast freight rail network.

The latest STB action was approved unanimously by the board’s three members — two Republicans and one Democrat — underscoring that skepticism surrounding the merger is bipartisan rather than ideological. That detail is significant because some merger proponents had privately viewed the current political environment as potentially favorable for consolidation.

There appears to be a “great deal of skepticism about this application” among the three current STB members, who backed the Thursday decision unanimously, said Roger Nober, a former chair who served on the panel from 2002 to 2006. “If I were those applicants, I wouldn’t be feeling very good about this,” he added.

Stock prices for the two railroads dropped several percentage points following the STB announcement.

Union Pacific and Norfolk Southern will provide the requested information to the board, according to a joint press release. “Under the governing statute, the STB has 12 months from the date it publishes its acceptance to complete its evidentiary proceedings, providing a clear and defined path forward regardless of the timing of individual steps,” the release says.

Railroad BNSF praised the board for a decision that “highlights the significant gaps” in the revised application from its rivals. Holding the proceeding and environmental review in abeyance until UP and NS provide this supplemental information underscores the seriousness of those deficiencies. “The fundamental concerns persist: the transaction threatens to reduce competition, restrict access for shippers, and undermine the resilience and efficiency of the national rail network,” BNSF said in a statement.

Exactly how long the board will consider the proposed deal has yet to be formally announced, but the board will hold at least 12 public meetings, according to the statement.

“We have more confidence than ever in the value this proposal will deliver for all stakeholders and look forward to a full and transparent review,” Norfolk Southern CEO Mark George said in the press release.

Agricultural organizations have played an increasingly prominent role in shaping the debate. Farm groups, including the American Farm Bureau Federation and commodity associations, have argued for months that the merger applications lacked sufficient detail regarding how grain shippers, fertilizer distributors, ethanol producers, and rural customers would be protected if the transaction moves forward.

The National Grain and Feed Association responded cautiously to the STB decision, emphasizing that it is still evaluating the proposal and gathering feedback from its members. “As the process moves forward, the National Grain and Feed Association will continue to examine the application and gather feedback and perspectives from its members to help determine what position, if any, it will take in this matter,” the group said. “NGFA has consistently maintained that any agreement must deliver tangible benefits for rail customers and the agricultural supply chain.” The association added that it looks forward to continued engagement with both the STB and the railroads as the review process advances.

Sources close to the proceeding said many of the questions now being emphasized by the STB mirror concerns were raised by agriculture groups since last fall, particularly surrounding competition, reciprocal switching, rate protections, service continuity during integration, and the potential for reduced rail options in key production regions.

The board’s posture also suggests regulators may now expect Union Pacific and Norfolk Southern to disclose operational information they have thus far resisted providing publicly. That could include more granular traffic modeling, contingency planning, interchange agreements, and specific service benchmarks tied to merger implementation.

Meanwhile, the proceeding is increasingly entering what some observers describe as the “real political and business give-and-take” phase, where major shipper groups, regional interests, labor organizations, ports, and competing railroads will attempt to shape the conditions attached to any eventual approval.

One regulator drawing particular attention is STB Chairman Patrick Fuchs, who previously worked for Senate Majority Leader John Thune (R-S.D.) and is widely viewed in transportation policy circles as highly analytical and data-focused. Sources familiar with the board’s internal dynamics describe Fuchs as unlikely to rely on broad narratives or political pressure when evaluating the merger record, instead focusing heavily on detailed operational evidence and measurable customer impacts. That approach could prove especially important as agricultural interests continue pressing the railroads to demonstrate — rather than simply promise — that the merger would improve service and competition for rural America.

— NWS outlook: Widespread showers and thunderstorms to persist across the Southern U.S. into the weekend… …A Pacific low maintains unsettled conditions and isolated severe weather across the Northwest… …There is a Slight Risk (level 2/4) of excessive rainfall over parts of the Southeast on Friday… …There is a Slight Risk (level 2/5) of severe thunderstorms over parts of Nebraska and Dakota on Saturday.

—Western Corn Belt rains improve crop outlook while eastern Belt faces dryness stress

Updated 15-day forecast boosts moisture prospects across western Corn Belt, northern Plains, and HRW wheat areas, while eastern Corn Belt dryness raises concerns for early crop development

An upgraded 15-day weather outlook is providing a significantly improved moisture picture for the western Corn Belt, where widespread rainfall totals of 2 to 4 inches are expected to stabilize crop conditions following recent dryness concerns. Overnight rains across Nebraska already delivered meaningful relief, and additional precipitation is forecast to support emerging corn and soybean crops during a critical early development stage.

The improved moisture outlook is tied to a persistent omega block weather pattern that is reshaping conditions across the central U.S. While the western Corn Belt stands to benefit from repeated rainfall events, the same blocking pattern is expected to keep much of the eastern Corn Belt largely dry for at least the next week. Forecasters warn that topsoil moisture depletion could intensify across areas near Lake Michigan and portions of the eastern Midwest, potentially stressing early crop development before the pattern weakens during the 6–10-day period.

As the blocking setup begins to break down, forecasters expect rainfall opportunities to normalize during the 11–15-day window, offering eventual relief to drier eastern areas. Meanwhile, the far eastern northern Plains also saw an improved forecast, with better chances for near-normal precipitation in both the 6-10- and 11-15-day periods following an exceptionally dry stretch.

Temperatures across the western Corn Belt and northern Plains are projected to run 5 to 10 degrees above normal over the next two weeks. The warmer pattern is expected to accelerate crop emergence and development, particularly in areas now receiving improved moisture support.

Further south, the Mid-South and Southeast are forecast to remain in an active rainfall pattern, with above-normal precipitation expected over the next 15 days. Recent downpours of 2.5 to 5 inches already halted some fieldwork activity but also provided meaningful drought relief. Forecast temperatures in those regions are now expected to return closer to seasonal early-June norms instead of the previously anticipated cooler pattern.

The Hard Red Winter wheat belt is also forecast to receive steady rainfall over the next two weeks, supporting summer row crops and pasture conditions following some of the most meaningful precipitation the region has seen in months. However, the wetter pattern could slow early winter wheat harvest activity in areas where the crop is reaching maturity.

—El Niño threat adds new pressure to global energy and food markets

Wall Street Journal reports forecasters see a high likelihood of El Niño returning this year, raising concerns over energy demand, crop stress, and supply chain disruptions amid ongoing fallout from the Iran conflict 

The Wall Street Journal reported that the expected return of the El Niño weather pattern is emerging as another major risk for the global economy, compounding energy and inflation pressures already heightened by the Iran war and uncertainty surrounding the Strait of Hormuz. Climate scientists and forecasters in the U.S. and abroad say El Niño is highly likely to develop this year, with unusually warm ocean temperatures increasing the possibility of a severe event.

Perspective: El Niño — which occurs when Pacific trade winds weaken and ocean temperatures warm — typically brings hotter and drier conditions across much of Asia while increasing rainfall in other regions, including parts of the U.S. Gulf Coast. Previous El Niño cycles contributed to widespread disruptions, including India’s rice export ban, low water levels in the Panama Canal, flooding in Brazil, and surging cocoa prices after crop damage in West Africa.

Energy markets are closely monitoring the outlook. BNP Paribas commodities strategist Jason Ying warned that stronger cooling demand in Asia during hotter weather could divert liquefied natural gas cargoes away from Europe, potentially leaving European gas inventories tighter heading into winter. Analysts also noted that drought conditions linked to El Niño can reduce hydropower generation, forcing countries such as China and India to increase coal and natural gas consumption.

India is already battling an intense heat wave, with forecasts pointing to below-average monsoon rainfall. Higher temperatures during El Niño years typically increase electricity demand as air conditioner use rises. Farmers across Asia are also facing elevated diesel and fertilizer costs, raising concerns about crop stress and broader food inflation risks.

The report noted that agricultural commodities ranging from sugar to natural rubber could see price volatility if weather disruptions intensify. Climate scientists cautioned that El Niño now acts as a “risk multiplier” because each event is occurring on an increasingly warmer planet, amplifying the odds of extreme weather events tied to fossil fuel-driven climate change.

—USDA report highlights expanding drought risks, uneven rainfall patterns

NRCS update points to worsening dryness across parts of the Corn Belt and Plains while El Niño is expected to suppress Atlantic hurricane activity

USDA Natural Resources Conservation Service’s latest Water and Climate Update (link) paints a mixed picture for U.S. agriculture, with widespread drought concerns persisting across major production regions despite pockets of heavy rainfall in the Plains and Southeast. The report also highlights NOAA’s expectation for a below-normal Atlantic hurricane season as El Niño conditions emerge this summer.

According to the report, a highly variable weather pattern brought significant temperature swings and uneven precipitation during the past week. Heavy rainfall stretched from eastern Texas and Oklahoma into the mid-Atlantic region, with some areas receiving more than six inches of rain. Meanwhile, much of the upper Mississippi Valley and western Corn Belt remained mostly dry.

The drought outlook remains concerning across large portions of the country. The U.S. Drought Monitor map released May 28 showed extensive moderate-to-exceptional drought coverage across the western U.S., central Plains, and parts of the Southeast. The report noted that above-normal temperatures and limited moisture in parts of Montana, Idaho, and New Mexico are beginning to pressure streamflows following a weak winter snowpack.

Soil moisture conditions also reflect growing regional stress. NOAA soil moisture percentile maps showed widespread dryness across portions of the Plains, Midwest, and Southeast, while localized improvements appeared in areas receiving recent rainfall.

USDA agricultural meteorologist Brad Rippey said the near-term pattern is expected to favor continued rainfall from the central and southern Plains into the Southeast, while much of the Midwest is forecast to remain relatively dry outside its southern and western fringes. The 6- to 10-day outlook also calls for warmer-than-normal temperatures across much of the northwestern U.S. and northern Plains.

Meanwhile, NOAA’s hurricane outlook projects below-normal Atlantic hurricane activity for the June-November season because developing El Niño conditions typically increase wind shear that suppresses storm formation in the Atlantic basin. However, NOAA cautioned that major hurricanes remain possible despite the forecast.

The report’s seasonal drought outlook through Aug. 31 indicates drought persistence or expansion across much of the West, northern Plains, and portions of the Midwest, reinforcing concerns about crop stress and water supplies heading into the heart of the summer growing season.

—India’s weakening monsoon outlook raises inflation and growth risks

Economists warn that a hotter, drier summer could pressure food supplies, rural demand and the Reserve Bank of India as El Niño concerns intensify

India’s monsoon outlook deteriorated further Friday, raising new concerns about food inflation, rural growth and financial-market volatility at a time when the country is already grappling with elevated energy prices and currency pressures. The India Meteorological Department (IMD) reaffirmed its forecast for a “below-normal” southwest monsoon season but reduced its rainfall estimate to 90% of the long-term average from 92% previously, citing an increasing likelihood of an El Niño weather pattern.

Rainfall below 90% of the long-term average would qualify as a “deficient monsoon,” and the IMD now places the probability of that outcome at 60%. The southwest monsoon, which runs from June through September, remains critical to India’s farm sector and rural economy despite decades of advances in irrigation, seed technology and crop management.

The weaker outlook immediately heightened concerns over agricultural output and food prices. Poor monsoon rainfall can reduce crop yields, tighten food supplies and weaken rural incomes, particularly in regions still heavily dependent on rain-fed agriculture. Economists also fear the inflationary effects could be amplified by persistently high crude oil prices, which are already increasing transportation and input costs across the economy.

The Reserve Bank of India (RBI), in its annual report released Friday, acknowledged that monsoon variability still matters significantly for agriculture, though it emphasized that the economy has become somewhat more resilient over time. “While the monsoon remains critical for Indian agriculture, the sensitivity of agricultural production to rainfall variability has moderated over time with rising irrigation intensity, improved crop management practices, and technological advancements,” the RBI said.

Private economists broadly agree that India’s vulnerability to El Niño conditions has diminished compared to prior decades, but they still expect a meaningful inflation impact this year. Nomura economists Sonal Varma and Aurodeep Nandi noted that previous El Niño episodes in 2018 and 2023 produced smaller slowdowns in food production growth than earlier cycles due to improvements in farming practices and irrigation coverage.

Even so, Nomura expects food inflation to surge to roughly 6% during the current fiscal year, compared to just 0.6% in FY26. Headline inflation is projected to rise to 5% from 2.1% previously, though those forecasts were made before the IMD downgraded its rainfall estimate and before factoring in the latest rally in global crude oil prices tied to Middle East tensions.

Financial markets are already beginning to reflect concerns about weaker rural spending power. According to Bloomberg Intelligence analyst Nitin Chanduka, investors have increasingly avoided companies with high exposure to rural demand. Stocks tied to microfinance, motorcycles, fertilizers, agri-chemicals, tractors and rural consumer goods have lagged urban-focused companies by roughly seven percentage points this year.

The outlook now places additional pressure on the RBI, which economists still expect will prioritize economic growth over inflation risks by avoiding interest-rate increases. However, a prolonged stretch of hot and dry weather during June could complicate that strategy if food prices accelerate sharply and inflation expectations begin to rise.

Meanwhile, the monsoon forecast also carries broader implications for global agricultural and energy markets. India is one of the world’s largest consumers of vegetable oils, sugar and grains, and weaker domestic production could increase import demand later this year, potentially tightening global supplies and adding another inflationary layer to world food markets already dealing with volatile energy costs and geopolitical uncertainty.