Same Analysts Who Wrongly Doubted China Soybean Purchases from U.S. Also Skeptical of Iran Purchases of U.S. Farm Products
Senate farm bill analysis and Dem reaction | Diesel prices drop under $5 | Trump targets fuel pricing | Bessent sees 3% GDP for U.S. | NWS cases again expand | Year-round E15 update
| LINKS |
Link: Senate Farm Bill 2.0 Unveiled: Boozman Draft Signals New Direction
for Farm Policy
Link: Major U.S. Meat and Livestock Organizations: The Groups
That Shape Policy, Trade, and Production
Link: Video: Wiesemeyer’s Perspectives, June 22
Video show is now on You Tube, Spotify & Apple
Link: Audio: Wiesemeyer’s Perspectives, June 22
| Updates: Policy/News/Markets, June 24, 2026 |
| UP FRONT |
TOP STORIES
— Diesel price relief arrives, but U.S. farmers need it to last: Lower fuel costs offer a welcome break, but margins remain tight.
— Trump targets fuel pricing as crude retreats after Iran truce: DOJ scrutiny adds pressure on fuel companies as pump prices lag crude’s decline.
— Bessent bets on 3% growth as administration pushes supply-side agenda: The Treasury secretary sees stronger growth, though inflation and deficits remain risks.
— New World screwworm cases expand in Texas, raising concerns about containment efforts: New cattle cases keep attention on border surveillance and livestock risk.
— Iran grain sales from U.S. debate rekindles memories of China skepticism: Analysts doubt major purchases, but trade history argues against dismissing the possibility.
— Prop. 12 fight moves to the Senate front burner: The farm bill draft omits a pork industry priority, setting up a major Senate battle.
— Senate farm bill faces big hurdle as SNAP fight threatens bipartisan path: Democrats say SNAP cost shifts remain a threshold issue.
— Boozman sees momentum for year-round E15 and signals more farm aid may be needed: E15 and producer assistance remain key farm-state priorities.
— U.S./India trade talks enter critical phase as Greer pushes for interim deal: India signals it will not be rushed by U.S. tariff deadlines.
— Senate passes Iran war powers resolution, escalating congressional challenge to Trump policy: Bipartisan votes show growing concern over an open-ended conflict.
— Trump maritime plan sets up funding fight over shipbuilding revival: The proposal backs shipbuilding aid but raises questions over tariffs, vessel seizures and port fees.
FINANCIAL MARKETS
— Equities today: Global markets paused as investors weighed Iran diplomacy and AI stock weakness.
— Equities yesterday: AI and semiconductor stocks led a sharp selloff as investors questioned spending returns.
— PCE inflation test could shape the Fed’s next move: A hot reading could intensify debate over whether rate hikes are back on the table.
AG MARKETS
— Grain market firms overnight as weather and wheat concerns support trade: Corn and wheat gained while soybean oil weakened.
— International grain markets firm on wheat, mixed on vegetable oils: Paris wheat rose, Russian wheat held steady and palm oil slipped.
— European heat wave raises crop risks as temperatures top 110 degrees in France: Extreme heat threatens corn, wheat and livestock across Europe.
— El Niño returns to reshape South American crop prospects: The pattern could help southern areas while stressing Brazil’s Center-North.
— Ag markets Tuesday, June 23: Favorable weather pressured grains and cotton, while hogs recovered and cattle eased.
FARM POLICY
— Senate farm bill draft opens negotiations, but SNAP fight looms large: Boozman’s draft advances talks, but nutrition policy remains the biggest obstacle.
WILDFIRE AID
— House sends wildfire aid streamlining bill to Trump after overwhelming bipartisan vote: The bill speeds USDA conservation payments and expands wildfire aid eligibility.
FOOD POLICY & FOOD INDUSTRY
— USDA moves to implement SNAP administrative cost shift to states: A proposed rule would cut the federal share of state SNAP administrative costs beginning in FY 2027.
LABOR & IMMIGRATION POLICY
— H-2A program usage continues to accelerate: First-half certifications put the guest-worker program on pace for a record year.
POLITICS & ELECTIONS
— Mamdani’s primary sweep deepens Democratic divide ahead of midterms: Progressive victories in New York strengthen the party’s left wing and give Republicans a new attack line.
— GOP midterm exposure problem limits the size of the wave: Charlie Cook says Republicans face a rough environment, but fewer competitive seats may cap losses.
WEATHER
— NWS outlook: Severe weather, flash flooding, intense heat and elevated fire weather remain key near-term risks.
| — Rainfall brings relief but sets up new weather risks across key crop regions: Moisture helped the northwestern Corn Belt, while southern areas face heavy rain and early July heat. TOP STORIES—Diesel price relief arrives, but U.S. farmers need it to lastLower fuel costs offer a welcome break for producers facing tight margins, though broader profitability challenges remain The average U.S. diesel price falling below $5.00 per gallon for the first time since mid-March is a notable development for agriculture because diesel remains one of the most important input costs across virtually every segment of farming. From spring planting and summer crop spraying to grain hauling and harvest operations, diesel powers tractors, combines, irrigation systems, trucks and much of the equipment needed to move crops and livestock through the supply chain. For grain producers, the timing is particularly important. Much of the Corn Belt is entering a period when farmers are making crop protection applications and preparing for the logistical demands of harvest later this year. Lower diesel prices help reduce operating expenses at a time when many producers are facing compressed margins due to relatively low corn prices and only modest improvements in soybean economics. Every decline in fuel costs can partially offset weakness in commodity prices. Livestock producers also stand to benefit. Cattle feeders, dairy operators and hog producers rely heavily on diesel for feed transportation, manure management, equipment operation and moving animals to market. Lower fuel costs can trim expenses throughout the production chain and may eventually help reduce freight costs for feed ingredients moving across the country. The impact extends beyond the farm gate. Diesel is the primary fuel used by the trucking industry, railroads and many agricultural supply chains. As diesel prices decline, transportation costs for fertilizer, seed, crop chemicals and feed ingredients can ease. Likewise, moving harvested grain from farms to elevators, processors and export terminals becomes less expensive. While freight rates do not move in lockstep with retail diesel prices, sustained declines typically provide some relief to the broader agricultural transportation system. The drop below $5.00 is also significant psychologically. Farmers have spent much of the past several years dealing with elevated fuel, fertilizer, labor and interest costs. Any indication that one of those major expense categories is moving lower is viewed positively, especially as many producers remain concerned about profitability heading into 2027. Lower energy costs can also help moderate inflation pressures across rural economies. Still, the benefit should not be overstated. Diesel prices remain historically high compared with pre-pandemic levels, and fuel costs are only one part of the farm income equation. Producers continue to face elevated interest expenses, high machinery costs and uncertainty surrounding export demand and trade policy. Moreover, diesel markets remain vulnerable to geopolitical developments, particularly in the Middle East, where disruptions can quickly reverse recent price declines. For now, however, the move below $5.00 per gallon represents one of the few clear cost-side positives for U.S. agriculture. If energy markets remain calm and diesel prices continue to trend lower through the summer and into harvest season, the savings could provide a modest but meaningful boost to farm profitability during a period when many producers need every dollar they can save.—Trump targets fuel pricing as crude retreats after Iran truceWhite House pressure on pump prices adds new uncertainty for energy markets as consumers await relief and refiners defend pricing dynamicsPresident Donald Trump’s call for the Department of Justice to investigate possible fuel-price “gouging” reflects growing frustration that gasoline prices have not fallen as quickly as crude oil prices following the U.S./Iran memorandum of understanding and the reopening of the Strait of Hormuz. While oil futures have retreated sharply from their war-related highs, gasoline prices remain elevated relative to pre-conflict levels, prompting the president to argue that consumers are not receiving the full benefit of lower crude costs. The issue is more complicated than a simple comparison between crude oil and retail gasoline prices. Crude oil is the largest component of gasoline costs, but it typically accounts for only about half of the price consumers pay at the pump. Refining margins, transportation expenses, distribution costs, ethanol blending requirements, taxes, and retail marketing costs also influence gasoline prices. In addition, fuel retailers and refiners often work through inventories purchased when crude prices were significantly higher, creating a lag between falling crude prices and lower pump prices. Industry analysts generally note that gasoline prices tend to rise rapidly when crude rallies but decline more gradually when crude retreats because of these inventory and supply-chain dynamics. Still, the political optics are challenging. National average gasoline prices have reportedly fallen from roughly $4.52 per gallon a month ago to about $3.93 per gallon, but they remain above levels seen before military tensions with Iran escalated. The persistence of relatively high fuel prices matters because energy costs have been a major contributor to recent increases in consumer spending and inflation readings. Lower gasoline and diesel prices would provide immediate relief to households and businesses, including U.S. farmers facing elevated operating costs during the growing season and ahead of harvest. For agriculture, the broader energy trend remains constructive despite the White House criticism of fuel companies. Crude oil prices have fallen substantially from their recent highs as fears of a prolonged disruption in Middle East energy supplies have eased. If crude remains near current levels or moves lower, diesel prices — which are particularly important for farm operations, grain transportation, and fertilizer logistics — should continue trending downward in the weeks ahead. Whether DOJ scrutiny leads to any enforcement action remains uncertain, but the administration’s public pressure campaign is clearly aimed at accelerating the pass-through of lower energy costs to consumers before inflation concerns become further entrenched.—Bessent bets on 3% growth as administration pushes supply-side agendaTreasury secretary argues economic fundamentals remain strong, but deficit reduction is likely to be a longer-term challengeTreasury Secretary Scott Bessent is making one of the administration’s clearest economic forecasts yet, predicting U.S. economic growth could exceed 3% in 2026 despite persistent concerns about inflation, elevated interest rates, and slowing global demand. His comments suggest the White House believes recent policy initiatives — including tax incentives, deregulation efforts, trade actions, and energy production policies — are beginning to support stronger domestic economic activity.A growth rate with a “3” in front of it would represent a notable acceleration from the pace many economists expected entering the year. Most private-sector forecasts have generally anticipated growth closer to the 2% range, reflecting headwinds from higher borrowing costs and weaker business investment. Bessent’s optimism appears rooted in the administration’s argument that the private sector remains healthy, labor markets are resilient, and capital spending tied to manufacturing, energy, artificial intelligence infrastructure, and reshoring efforts continues to provide economic momentum. The timing of Bessent’s comments is significant because they come as markets await another closely watched inflation report (see related item below).Investors are increasingly debating whether the Federal Reserve may need to maintain restrictive monetary policy longer than anticipated—or even consider additional rate increases if inflation proves stubborn. Stronger-than-expected growth can be a double-edged sword: it boosts employment, incomes, and corporate earnings, but it can also keep inflation pressures elevated, complicating the Fed’s efforts to restore price stability. For agriculture and rural America, sustained 3% economic growth would generally be supportive for domestic food demand, biofuel consumption, freight activity, and overall consumer spending. Stronger economic performance could also help offset some of the uncertainty created by ongoing trade disputes and shifting global commodity flows. However, farmers and agribusinesses remain highly sensitive to interest rates, meaning any growth-driven inflation concerns that keep borrowing costs elevated could temper some of the benefits. Bessent was notably more cautious on the federal deficit outlook. While expressing confidence that the deficit-to-GDP ratio could eventually fall into the 3% range by the end of President Trump’s term, he acknowledged meaningful progress is unlikely this year. That reflects the reality that strong economic growth alone is rarely sufficient to reduce deficits quickly. Rising entitlement costs, higher interest payments on federal debt, defense spending requirements, and political resistance to major spending reductions continue to place upward pressure on federal borrowing. The administration’s challenge moving forward will be proving that stronger growth can coexist with declining deficits. Historically, sustained economic expansions have helped improve federal finances by increasing tax receipts, but most fiscal experts argue that meaningful deficit reduction ultimately requires some combination of spending restraint, revenue growth, or structural reforms. Bessent’s remarks indicate the White House is betting that faster economic growth will provide much of the answer, even as questions remain about whether growth alone can achieve the administration’s longer-term fiscal targets.Bottom line: Bessent is offering a decidedly upbeat assessment of the U.S. economy at a time when financial markets are increasingly focused on inflation risks and government debt. If growth does exceed 3% this year, it would strengthen the administration’s economic narrative. But it could also intensify the debate over whether the economy is running too hot for the Federal Reserve’s comfort, particularly if inflation remains elevated in the months ahead.—New World screwworm cases expand in Texas, raising concerns about containment effortsThree additional cattle cases in Terrell County highlight continuing spread along the border The confirmation of three additional New World screwworm (NWS) cases in cattle in Terrell County, Texas, marks another troubling development in the effort to prevent the destructive livestock pest from becoming established in the United States. According to USDA’s Animal and Plant Health Inspection Service (APHIS), the new cases were confirmed June 23 and bring the total number of active U.S. cases to 16, while three earlier cases have been moved to inactive status. The latest detections follow the June 22 confirmation of an infected goat in the same county, indicating that multiple species are now being affected within the area.The geographic location of Terrell County underscores why federal and state animal health officials remain on high alert. The county shares part of its southern border with Mexico, where screwworm activity has been advancing northward, and it also borders Crockett County, which already has a confirmed NWS case. The appearance of multiple infected animals in neighboring counties suggests the infestation is no longer an isolated incident and could reflect a broader pattern of localized spread. While the number of confirmed cases remains relatively small compared to historic outbreaks, each new detection expands the area requiring surveillance, treatment, and monitoring. There are, however, some encouraging signs in the APHIS data. The agency continues to report no confirmed cases in wildlife or feral animal populations and no positive detections from fly traps. Those findings are significant because wildlife can serve as a reservoir for the parasite, making eradication efforts substantially more difficult. Likewise, the absence of screwworm flies in trapping networks suggests that a self-sustaining fly population may not yet be established in Texas. If infestations remain confined to individual animal cases rather than widespread fly activity, officials have a better chance of containing and eliminating outbreaks through aggressive treatment and surveillance. Even so, the continued appearance of new cases highlights the biological challenge posed by screwworm. Unlike many livestock diseases, the threat comes from the larval stage of a fly that lays eggs in wounds or openings on warm-blooded animals. The larvae feed on living tissue, causing severe damage and, in untreated cases, death. Because livestock operations routinely involve activities that can create wounds — such as branding, castration, dehorning, tagging, and predator injuries — producers in affected regions face heightened management concerns. Ranchers are being urged to inspect animals frequently and report suspicious wounds immediately. The broader concern for the cattle industry is not simply the current case count but what the detections signal about future risk. USDA Secretary Brooke Rollins and APHIS officials have repeatedly emphasized that preventing establishment of NWS in the United States is a national livestock priority. The U.S. cattle herd is already at historically low levels, and an expanding screwworm outbreak could increase production costs, disrupt animal movements, and complicate efforts to rebuild inventories. The economic consequences would extend beyond cattle to sheep, goats, horses, wildlife, and even companion animals. For now, the absence of wildlife infections and fly-trap detections suggests containment efforts may still be working. However, the addition of three new cattle cases only a day after the initial Terrell County goat case demonstrates that the situation remains fluid. Industry observers will be watching closely to see whether these cases represent isolated infestations linked to animal movements or the early signs of broader screwworm activity along the Texas/Mexico border. The next several weeks of surveillance data will likely determine whether officials can declare the outbreak contained or whether additional control measures become necessary.—Iran grain sales from U.S. debate rekindles memories of China skepticismAnalysts doubt Tehran will buy U.S. Commodities, but recent trade history suggests caution before dismissing the possibilityPresident Donald Trump’s assertion that Iran could use unfrozen assets to purchase U.S. agricultural products has been met with widespread skepticism across commodity markets. Many grain traders and analysts argue that Iran has long-standing supply relationships with countries such as Brazil, Russia, and other exporters, making significant purchases of U.S. corn, wheat, or soybeans unlikely. Iranian officials have reinforced that view, publicly stating that Tehran is under no obligation to buy American farm products and that any released funds can be spent according to Iran’s own priorities. The skepticism is understandable. Iran has historically sourced grain and feed ingredients from a variety of suppliers based on price, logistics, and political considerations. In addition, details of the U.S./Iran understanding remain murky. While Trump and Vice President JD Vance have promoted the arrangement as a potential win for U.S. farmers, Iranian officials have repeatedly disputed that any commitment to purchase American commodities exists. Yet agricultural markets have learned repeatedly that geopolitical agreements often produce outcomes that initially appear improbable — and have forced commodity analysts to alter their prior bearish outlooks. The current debate bears some resemblance to the skepticism that surrounded China’s willingness to return as a major buyer of U.S. soybeans. During periods of heightened trade tensions, many analysts argued China would permanently shift purchases toward Brazil and reduce dependence on U.S. supplies. While China certainly diversified sourcing, economic realities, supply needs, and government-level negotiations eventually led to renewed U.S. soybean purchases that exceeded many expectations. The lesson is not that Iran will necessarily become a major customer, but rather that political assumptions often underestimate the power of commercial incentives. The Trump administration’s argument centers on the idea that access to unfrozen Iranian funds could be structured in ways that encourage purchases of U.S. food and agricultural products. Trump has stated that the money would be directed toward food purchases from American farmers, while Vance specifically mentioned corn, wheat, and soybeans as potential beneficiaries. For grain markets, the more important question is not whether Iran is legally obligated to buy U.S. commodities but whether economic incentives could make such purchases attractive. If sanctions relief expands, shipping routes normalize, and U.S. grain prices become competitive, Tehran could find value in diversifying suppliers. Iran remains a sizable importer of feed grains and food products, meaning even modest purchases could create headline support for commodity markets already searching for demand growth. Still, traders should avoid overestimating the potential impact. Even if Iran were to purchase U.S. corn, wheat, or soybeans, volumes would likely be small relative to overall U.S. export programs. China remains the far larger demand driver for soybeans, while Mexico, Japan, South Korea, and other traditional customers dominate many U.S. grain export flows. The immediate market significance would therefore be more psychological than fundamental, signaling that diplomatic agreements can reopen demand channels previously considered closed. The larger takeaway for agricultural markets is that certainty is often misplaced when politics and trade intersect. Today, many analysts insist Iran will not buy U.S. farm products. They may ultimately be correct. But commodity markets have seen similar confidence before regarding China, only to watch commercial realities and government negotiations reshape trade flows. As a result, producers and traders would be wise to view Iran-related demand prospects with measured skepticism rather than outright dismissal. The history of agricultural trade suggests that when governments seek diplomatic wins and buyers need supplies, seemingly unlikely deals can become reality.—Prop. 12 fight moves to the Senate front burnerFarm bill draft leaves out pork industry priority, setting up a major political and policy battle aheadThe release of Senate Ag Committee Chairman John Boozman’s (R-Ark.) farm bill discussion draft (link) without a Proposition 12 fix marks a significant setback for the pork industry’s top legislative priority, but it is far from the end of the fight. Instead, it signals that one of the most contentious agricultural issues in Washington remains unresolved and is likely headed for an intense battle as the Senate moves toward formal farm bill consideration. The competing statements issued Tuesday underscore just how sharply divided agriculture, animal welfare advocates, and lawmakers remain over California’s Proposition 12, the voter-approved law that establishes housing standards for breeding pigs whose pork is sold in California regardless of where the animals are raised. Since the Supreme Court upheld the law in 2023, the debate has shifted from the courts to Congress, where the industry has sought federal legislation to pre-empt state production standards that affect interstate commerce. For the National Pork Producers Council (NPPC), the omission of a Prop. 12 fix from the discussion draft is disappointing because the organization views the issue as an existential threat to a national livestock marketplace. The group argues that California’s law creates a precedent allowing individual states to impose production standards beyond their borders, potentially leading to a patchwork of conflicting regulations for pork, poultry, eggs, cattle and other agricultural products. NPPC’s decision to assemble a coalition of more than 330 agricultural organizations demonstrates the breadth of concern among many commodity groups about the interstate commerce implications rather than solely the specifics of pig housing requirements. The pork industry’s campaign received a significant legislative boost earlier this year when the House included a Proposition 12 fix in its version of the farm bill, demonstrating that a majority of lawmakers in one chamber were willing to support federal limits on state livestock production mandates. Supporters point to that vote as evidence that a bipartisan coalition exists for federal action. They also argue that compliance costs disproportionately affect smaller and mid-sized producers who lack the capital necessary to retrofit facilities or segregate supply chains for different markets. Industry economists have long contended that the law raises production costs and ultimately food prices, although the magnitude of those impacts remains debated. Yet the political landscape in the Senate appears considerably more challenging. Senate Minority Leader Chuck Schumer (D-N.Y.) is publicly opposing the Save Our Bacon Act and that highlights the uphill climb facing supporters. Schumer’s statement reflects the arguments advanced by animal welfare organizations and many progressive lawmakers who view federal pre-emption as an attack on states’ rights and voter-approved standards. Their position is that states have long exercised authority over food safety, consumer protection and animal welfare, and that Proposition 12 simply reflects California consumers’ preferences regarding how animals are raised. The political irony is that both sides are framing the debate around states’ rights. Pork producers argue that California is effectively dictating production practices to farmers in Iowa, North Carolina and other states. Opponents argue that federal legislation overturning Proposition 12 would prevent states from establishing standards desired by their own voters. That competing interpretation of federalism has complicated efforts to build a durable Senate coalition. Another factor working against immediate action is the broader farm bill coalition itself. Farm bills traditionally succeed because lawmakers avoid including provisions that threaten support from key constituencies. Proposition 12 has become one of those divisive issues that risks alienating lawmakers whose votes are needed for final passage. Chairman Boozman’s decision to leave the language out of the discussion draft may reflect a strategic calculation that it is easier to add controversial language later than to remove it after opposition hardens. The absence of a fix from the draft should not be interpreted as Senate rejection of the industry’s position. Rather, it suggests leadership is attempting to advance the broader farm bill while keeping options open during negotiations. Senators including Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa), Kevin Cramer (R-N.D.), Ted Budd (R-N.C.), Pete Ricketts (R-Neb.), Thom Tillis (R-N.C.), John Cornyn (R-Texas), and Mike Rounds (R-S.D.) are expected to continue pressing for inclusion as the legislative process advances. Looking ahead, the most likely outcome is that Proposition 12 becomes one of the central amendment fights during Senate farm bill deliberations. The pork industry retains substantial support among agricultural-state lawmakers and many national farm organizations. However, opposition from Schumer and animal welfare groups ensures that any attempt to add a fix will face intense scrutiny and procedural hurdles. The broader significance extends beyond pork production. The outcome will help determine whether Congress is willing to place limits on state laws that affect agricultural production beyond state borders. That precedent could influence future debates involving livestock production practices, environmental standards, labeling requirements and food system regulations. For that reason, both supporters and opponents view the battle over Proposition 12 as much larger than pork, making it one of the most consequential unresolved issues in the 2026 farm bill debate.—Senate farm bill faces big hurdle as SNAP fight threatens bipartisan pathDemocrats signal farm bill support hinges on revisiting food aid cost shifts to states Senate Ag Committee Chairman John Boozman’s (R-Ark.) farm bill legislative text immediately exposed the central political challenge that could determine whether Congress can enact a new five-year package this year: the battle over SNAP funding and state cost-sharing requirements. (More on this topic under Farm Policy section.) Senate Democrats made clear that their biggest concern remains unresolved. The legislation leaves untouched the Supplemental Nutrition Assistance Program (SNAP) changes enacted in last year’s reconciliation package, including more than $187 billion in projected SNAP savings and a requirement that states with payment error rates above 6% begin sharing benefit costs starting in 2028. For many Democrats, that issue is not a side dispute—it is the deciding factor. Sen. Elissa Slotkin (D-Mich.) said lawmakers from farm states “desperately want a farm bill” but argued that the SNAP reductions remain a “fundamental issue.” Sen. Tina Smith (D-Minn.) went further, calling the state cost-sharing provisions the “threshold question” and saying she could not support the bill without changes. Sen. Ben Ray Luján (D-N.M.) criticized Republicans for releasing what he described as a partisan draft rather than a bipartisan negotiating product. The dispute highlights the increasingly difficult politics of farm bill coalition-building. For decades, farm legislation has relied on an alliance between rural lawmakers seeking farm safety-net programs and urban lawmakers seeking nutrition assistance funding. Last year’s reconciliation law altered that balance by making substantial SNAP changes outside the traditional farm bill process. Democrats now argue that Congress cannot simply proceed with a new farm bill while ignoring those earlier decisions. Republicans counter that the reconciliation debate has already been settled and that the farm bill should focus on modernizing agricultural programs, strengthening commodity supports, conservation initiatives, crop insurance and rural development programs. Boozman has emphasized that the legislation remains a discussion draft and that negotiations are continuing. The challenge for Senate Republicans is arithmetic as much as policy. Unlike the House, where Republicans passed their farm bill largely along party lines, Senate passage almost certainly requires bipartisan support to reach the 60-vote threshold needed to overcome procedural hurdles. That gives Democrats substantial leverage, particularly on issues they view as core priorities. Meanwhile, Democrats face pressure from farm groups that have grown increasingly frustrated after years of farm bill extensions and delays. Many commodity organizations want Congress to move quickly, especially after inflation, higher interest rates and rising input costs have strained farm profitability. That creates an incentive for both parties to find a compromise even as they remain far apart on SNAP. One possible landing spot could be a temporary delay in the state cost-sharing requirements, something Democrats have been seeking through a two-year postponement. Whether Republican leaders are willing to reopen any portion of last year’s reconciliation law remains unclear, however, and doing so could create resistance from fiscal conservatives especially in the House who view the SNAP changes as a major policy victory. Bottom line: Boozman hopes to advance the bill before the August recess, but unless negotiators can bridge the SNAP divide, the Senate may find itself confronting the same reality that has delayed farm bill completion for years: agricultural policy is often easier to agree on than nutrition policy, and the latter frequently determines the fate of the entire package. —Boozman sees momentum for year-round E15 and signals more farm aid may be neededSenate Ag chairman says farm bill negotiations are moving forward, but economic pressures on producers remain a major concern The release of Senate Ag Committee Chairman John Boozman’s (R-Ark.) farm bill discussion draft marked the formal start of what is expected to be an intense round of bipartisan and bicameral negotiations, but Boozman made clear Tuesday that the farm economy’s immediate challenges extend beyond the legislation itself. Speaking with reporters after unveiling the proposal, the Arkansas Republican highlighted both the prospects for year-round E15 legislation and the possibility that Congress may need to provide additional financial assistance to struggling farmers. On E15, Boozman struck an optimistic tone regarding legislation that would allow nationwide year-round sales of gasoline blended with 15% ethanol. The issue has become a top priority for corn growers, ethanol producers, and many Midwestern lawmakers who argue that permanent nationwide E15 access would provide a larger and more stable domestic market for corn while giving consumers a lower-cost fuel option. Boozman indicated there remains significant interest in moving the measure and suggested there are multiple legislative vehicles available. While he stopped short of predicting a timetable, his comments reinforced growing expectations that Congress could ultimately act on the issue separately from the broader farm bill. The politics surrounding E15 have shifted noticeably over the past several years. What was once viewed largely as a regional ethanol issue has increasingly become tied to energy security, fuel affordability, and rural economic development. Supporters also point to the fact that several Midwestern states have already moved toward permanent E15 availability through state-level actions and federal waivers. The challenge remains building enough support among lawmakers from regions where refining interests have historically raised concerns about fuel distribution and infrastructure impacts. For agriculture, the significance of year-round E15 extends beyond ethanol demand. At a time when export markets remain uncertain and biofuel policy continues to evolve, many farm groups view domestic fuel demand as one of the most reliable avenues for boosting corn consumption. Industry estimates suggest nationwide E15 availability could increase annual corn demand by hundreds of millions of bushels over time, providing additional support for farm income during a period of compressed margins. But others say it will take years for states outside of the Midwest to build the infrastructure needed for year-round E15. Of note, Senate Majority Leader John Thune (R-S.D.) has acknowledged the political challenges facing the E15 legislation, particularly opposition from senators representing refining states. Following House passage of the E15 bill in May, he told reporters, “We’re looking at ways to move it,” while noting that senators from refinery-heavy states remain an important part of the conversation. Thune has also publicly framed E15 as a priority for agriculture. During a Senate Ag Committee hearing in May, he stated, “We need to get E15 done,” underscoring his view that expanded ethanol access is important for farmers and rural economies. Impact: Industry groups including the National Corn Growers Association estimate that full nationwide adoption of year-round E15 could ultimately increase annual corn demand by roughly 2.1 to 2.4 billion bushels, although the actual gain over the next 5-7 years will depend on the pace of infrastructure expansion and consumer adoption. A 1% increase in the national ethanol blend rate would require roughly 486 million additional bushels of corn. Meanwhile, Boozman’s comments on farm economics may have drawn even greater attention. He acknowledged that many producers remain under severe financial pressure despite Congress providing economic assistance in recent years. Corn, soybean, wheat, cotton and rice producers continue to face a difficult combination of lower commodity prices, elevated input costs and high interest rates. While some sectors have benefited from stronger livestock markets, much of crop agriculture continues to struggle with profitability concerns. The chairman indicated there is growing recognition in Washington that additional assistance may be warranted if current market conditions persist. That assessment aligns with concerns voiced by numerous farm organizations that existing safety-net programs have not kept pace with today’s production costs. One of the central themes of both House and Senate farm bill efforts has been strengthening commodity support programs and crop insurance protections to better reflect current economic realities. The discussion comes as lawmakers continue debating whether recently enacted farm assistance and disaster programs will be sufficient to bridge producers until a new farm bill can be completed and implemented. Many agricultural economists warn that another year of low commodity prices combined with rising debt levels could accelerate financial stress in parts of rural America, particularly among younger and highly leveraged operators. Boozman’s remarks underscore the balancing act facing Congress. Lawmakers are attempting to craft a long-term farm bill that modernizes the safety net while also responding to immediate economic pressures that many producers argue cannot wait. Whether through supplemental aid, stronger farm bill provisions, year-round E15 expansion, or some combination of all three, agricultural policymakers increasingly appear focused on finding ways to improve farm income at a time when many producers say margins are approaching unsustainable levels. The broader takeaway from Boozman’s comments is that farm bill negotiations are no longer occurring in isolation. They are unfolding against a backdrop of mounting concern about rural economic conditions, uncertainty surrounding commodity markets, and growing pressure from farm-state lawmakers to deliver both short-term relief and long-term policy certainty. As negotiations move forward this summer, year-round E15 and additional farmer assistance are likely to remain among the most closely watched issues.—U.S./India trade talks enter critical phase as Greer pushes for interim dealIndia signals it won’t be rushed by tariff deadlines, raising questions about whether a July agreement is still realisticU.S. Trade Representative Jamieson Greer opened a new round of high-level trade negotiations in New Delhi on Tuesday, meeting with Indian Commerce Minister Piyush Goyal and Finance Minister Nirmala Sitharaman to finalize the interim trade framework first outlined by President Donald Trump and Prime Minister Narendra Modi earlier this year. Yet even as both governments publicly describe the negotiations as productive, comments from Goyal suggest India is increasingly confident it can wait out U.S. pressure and negotiate on its own timetable, as it has done with other U.S. administration and via the WTO. The significance of Goyal’s remarks goes beyond diplomatic messaging. By declaring that India “never negotiates on a deadline” and emphasizing that the July 24 expiration of the Trump administration’s temporary 10% tariff regime is primarily a U.S. issue, New Delhi appears to be signaling that it believes leverage has shifted. The Supreme Court’s February decision overturning the administration’s use of the International Emergency Economic Powers Act for broad tariffs created uncertainty around several trade actions and weakened what had been one of Washington’s principal negotiating tools. India is now using that legal uncertainty to seek additional concessions and clarification before committing to final terms. At stake is an agreement that would provide improved access for U.S. exporters across a range of industrial and agricultural sectors. Earlier discussions envisioned India reducing or eliminating tariffs on selected American products, including agricultural commodities, while the United States would lower duties on Indian exports and remove penalties linked to India’s purchases of Russian crude oil. For U.S. agriculture, the negotiations have been closely watched because India remains one of the world’s most protected major agricultural markets. Any meaningful reduction in Indian barriers could create opportunities for products ranging from almonds and apples to ethanol, feed ingredients, pulses, dairy products and other value-added agricultural goods. The challenge is that agriculture remains one of the most politically sensitive issues in India. Modi’s government continues to face pressure from domestic farm organizations and opposition parties that view expanded agricultural imports as a threat to rural livelihoods. That political reality helps explain why progress has been slower than many U.S. negotiators anticipated. Opposition leaders have already begun criticizing the proposed agreement, arguing it would provide disproportionate benefits to American exporters while exposing Indian producers to greater competition. The timing of the talks is particularly important because several other trade issues are now intersecting with the bilateral negotiations. Besides the pending expiration of Section 122 tariffs on July 24, India is among dozens of countries facing scrutiny under ongoing U.S. Section 301 investigations involving labor practices and industrial overcapacity. USTR recently proposed additional tariffs on products from numerous trading partners, including India, creating another layer of uncertainty for businesses attempting to plan future trade flows. From Washington’s perspective, a successful interim agreement with India would represent one of the Trump administration’s most significant trade achievements outside of China. India is expected to become one of the world’s largest consumer markets over the next decade and is increasingly viewed by U.S. policymakers as a strategic counterweight to China in global supply chains. Securing greater market access now could position American exporters to benefit from India’s long-term economic expansion. For India, however, the calculations are more complicated. The government wants closer commercial ties with the United States but also seeks to preserve flexibility in managing domestic industries and maintaining strategic relationships with other partners, including Russia. New Delhi’s insistence that it will not negotiate under deadline pressure suggests officials believe Washington needs a deal as much as India does. The outlook remains cautiously positive. Both governments continue to describe the negotiations as constructive, and Trump recently stated that the two sides are “very close” to completing an agreement following his meeting with Modi at the G7 summit. However, Goyal’s comments underscore that substantial differences likely remain. Rather than a simple race to meet a July deadline, the talks increasingly resemble a broader strategic negotiation over market access, tariffs, and geopolitical alignment. For U.S. agriculture, the outcome could be especially important. India has historically been one of the most difficult major markets to penetrate because of high tariffs, complex sanitary requirements, and strong domestic political protections. Even a limited interim agreement that modestly lowers barriers could create new export opportunities and establish a foundation for future negotiations. Conversely, failure to reach a deal would leave many of those barriers intact while potentially opening the door to new tariff disputes. The next several weeks will reveal whether Greer’s visit produces enough momentum to bridge remaining gaps or whether India succeeds in stretching negotiations beyond the July tariff deadline. Either way, the discussions have evolved beyond a simple tariff bargain and now represent a test of how far Washington and New Delhi are willing to go in building a deeper economic partnership. —Senate passes Iran war powers resolution, escalating congressional challenge to Trump policyAfter House approval earlier this month, bipartisan votes in both chambers signal growing pressure for a defined endgame The Senate on Tuesday (June 23) approved a war powers resolution calling for an end to U.S. military involvement in the Iran conflict absent specific congressional authorization, marking a significant bipartisan challenge to President Trump’s war policy. The measure passed with support from Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Bill Cassidy (R-La.), and Rand Paul (R-Ky.), who joined most Senate Democrats in backing the resolution. Sen. John Fetterman (D-Pa.) was the lone Democrat to oppose the measure. The vote follows House passage of a similar resolution earlier this month, when a bipartisan coalition approved legislation aimed at reasserting Congress’ constitutional role in decisions involving military force. While neither measure is likely to immediately alter military operations, the combined House and Senate actions send a powerful political message that lawmakers in both parties are increasingly uneasy with the trajectory of the conflict and the absence of a formal authorization from Congress. The Senate action reflects a broader concern that the administration’s military campaign could evolve into a prolonged engagement with uncertain objectives and potentially significant costs. Lawmakers supporting the resolution argued that Article I of the Constitution gives Congress the authority to declare war and that any sustained military operation against Iran requires explicit legislative approval. Opponents contended that the president must retain sufficient authority as commander in chief to protect U.S. forces and respond to threats without waiting for congressional action. The vote is particularly noteworthy because it demonstrates cracks within the Republican coalition on national security issues. While GOP leaders have generally supported the administration’s handling of the conflict, the willingness of several Republican senators to break ranks suggests growing concern over both the military and political consequences of a prolonged confrontation. That concern has been amplified by rising questions about war costs, potential escalation risks, and the long-term impact on U.S. strategic priorities elsewhere around the world. Despite the strong bipartisan showing, the practical effect of the resolution remains limited. The White House is expected to argue that the president already possesses sufficient authority under existing law to conduct military operations necessary to defend U.S. interests and personnel. As a result, the administration is unlikely to alter its current posture solely because of the Senate vote. The larger significance may lie in what comes next. Congress will soon confront defense appropriations bills, supplemental funding requests, and other legislation tied to military operations. Lawmakers who support the war powers resolution could attempt to attach funding restrictions, reporting requirements, or other conditions that would have more direct consequences for administration policy. Analysts say such efforts would face significant political and procedural hurdles but would represent a more substantive challenge than the largely symbolic resolution approved this week. For agricultural and commodity markets, the congressional vote reinforces expectations that policymakers are seeking ways to prevent further escalation. Energy markets have been highly sensitive to developments involving Iran, particularly concerns surrounding oil exports and shipping through the Strait of Hormuz. Any indication that Washington is moving toward a more limited military commitment or a diplomatic off-ramp could help ease geopolitical risk premiums in crude oil prices, while continued uncertainty could keep volatility elevated. The outlook ahead points to a growing constitutional and political debate rather than an immediate policy shift. The House and Senate have now both signaled discomfort with an open-ended conflict, but the administration retains broad authority unless Congress can assemble sufficient bipartisan support behind binding legislation. The coming budget and defense funding debates will likely determine whether this week’s vote becomes a symbolic protest or the beginning of a more consequential effort by Congress to reassert its war-making powers. —Trump maritime plan sets up funding fight over shipbuilding revivalWhite House proposal embraces tariffs and seized vessels as revenue sources but sidesteps controversial port fees favored by some lawmakers The Trump administration is intensifying its push to rebuild the U.S. maritime sector, circulating draft legislation that would create a sweeping framework for subsidizing domestic shipbuilding, expanding the maritime workforce, and strengthening America’s commercial and strategic sealift capacity. But the proposal is already exposing a key fault line in Washington: how to pay for an ambitious effort to reverse decades of decline in U.S. shipbuilding and maritime commerce. The 165-page legislative package serves as the legislative companion to the administration’s Maritime Action Plan released earlier this year. At its core is the belief that the United States faces a growing national security vulnerability because of its shrinking commercial fleet and limited shipbuilding capacity compared with China, which now dominates global ship construction and maritime logistics. The proposal reflects an increasingly bipartisan view that the U.S. maritime sector has become a strategic weakness that requires federal intervention, much like semiconductors and critical minerals. A notable feature of the administration’s proposal is what it omits. Earlier administration discussions had contemplated imposing fees on Chinese-linked vessels and foreign shipping operators calling at U.S. ports. Those fees were viewed by many maritime advocates as a potentially significant source of revenue for rebuilding the domestic industry. However, the current draft excludes port fees entirely, a move that likely reflects both industry opposition and concerns about inflationary impacts on importers, retailers, and exporters. That omission puts the White House on a somewhat different track than the bipartisan SHIPS for America Act, legislation that has attracted support from lawmakers in both parties. Supporters of that measure have argued that Section 301 revenues and port-related fees should play a central role in financing maritime investments. Earlier this month, Democratic lawmakers urged President Trump to revisit vessel fees targeting China-linked shipping, arguing they would provide a dedicated funding stream while increasing pressure on Beijing’s maritime dominance. Instead, the administration is proposing a Maritime Security Trust Fund financed through a combination of tariff revenues and proceeds from seized smuggling vessels. The concept reflects a broader Trump administration philosophy of directing tariff collections toward domestic industrial policy initiatives. Under the proposal, the fund would receive an initial $1 billion capitalization and could receive up to $2 billion annually. While tariffs may provide a politically appealing source of revenue for the administration, questions remain about the stability of that funding stream. Tariff receipts can fluctuate significantly depending on trade volumes, economic conditions, and future trade agreements. Likewise, revenues from seized vessels are unlikely to represent a predictable long-term funding source. Critics may argue that large-scale maritime investments require a more permanent financing mechanism if Congress hopes to provide shipyards and maritime employers with long-term certainty. The legislation also seeks to replicate one of Trump’s signature first-term economic development initiatives through the creation of Maritime Prosperity Zones. Modeled after Opportunity Zones established in the 2017 Tax Cuts and Jobs Act, the concept would provide targeted tax incentives to attract investment into shipbuilding centers, ports, maritime manufacturing facilities, and workforce development programs. Supporters believe such incentives could help revitalize coastal industrial regions that have experienced decades of economic decline. From a political perspective, the proposal illustrates the unusual coalition forming around maritime policy. Organized labor, national security hawks, shipbuilders, and many lawmakers from both parties increasingly agree that the United States must expand its maritime capacity. The USA Shipbuilding Coalition, which includes labor interests, praised the administration’s draft and argued Congress now has sufficient bipartisan momentum to act. The larger debate moving forward will not be whether Washington should support domestic shipbuilding, but how aggressively and through what mechanisms. China’s dominance of global ship construction has become a bipartisan concern, particularly as policymakers assess potential military and supply-chain vulnerabilities. The question for Congress is whether lawmakers can reconcile competing funding models and merge the administration’s proposal with elements of the bipartisan SHIPS for America Act. The outlook for action is stronger than in previous years because maritime policy now intersects with several major congressional priorities: competition with China, national security, industrial policy, workforce development, and supply-chain resilience. That combination gives shipbuilding advocates a broader coalition than they have enjoyed in decades. However, disagreements over financing, the role of tariffs, and whether to revive vessel fees could ultimately determine how quickly a final package moves through Congress and how ambitious it becomes. |
| FINANCIAL MARKETS |
—Equities today: Global financial markets entered a holding pattern as investors weighed the latest developments surrounding U.S./Iran diplomacy while continuing to reassess the outlook for artificial intelligence-related stocks after a sharp technology-led selloff. Wall Street futures were mixed following Tuesday’s decline in major U.S. indexes. The market is increasingly demanding evidence that AI adoption will generate sustainable cash flow rather than simply fueling another round of spending.
In Asia, Japan -0.9%. Hong Kong +0.3%. China +0.1%. India +1%.
In Europe, at midday, London +0.5%. Paris +0.6%. Frankfurt +0.6%.
The combination of falling oil prices and weaker technology stocks presents an unusual market dynamic. Lower energy prices generally support economic growth by reducing costs for businesses and consumers, while weakness in technology shares can weigh heavily on broader indexes because of the sector’s large market capitalization. As a result, investors are receiving mixed signals about the direction of risk assets.
For agricultural markets, the recent decline in crude oil prices bears close watching. Sustained weakness in energy markets could pressure biofuel margins and potentially weigh on demand expectations for corn-based ethanol and soybean oil used in renewable diesel production. However, lower fuel costs also provide relief to farmers facing elevated transportation and input expenses.
Looking ahead, investors will focus on several key questions: whether the technology sector can stabilize after the recent valuation reset, whether Middle East tensions remain contained, and whether incoming economic data supports expectations for continued growth without reigniting inflation. Until those questions are answered, markets are likely to remain vulnerable to bouts of volatility despite the current calm.
The broader message from global markets is that investors are transitioning from a period driven largely by enthusiasm and momentum toward one increasingly focused on fundamentals. That shift does not necessarily signal the end of the AI investment boom, but it does suggest that companies will face greater scrutiny from investors demanding proof that massive spending today will translate into meaningful profits tomorrow.
Investors will be closely watching Wednesday’s earnings report from Micron Technology, which is scheduled for release after the market closes. The memory-chip manufacturer comes into the report under pressure after its shares plunged 13% Tuesday amid a broad selloff in AI, semiconductor, and technology stocks. Also on Wednesday’s earnings calendar are results from Paychex, Jefferies Financial Group, and Worthington Steel.
On the economic front, markets will receive fresh data on new home sales and the latest reading of U.S. leading economic indicators, both of which could provide additional insight into the strength of the economy and the outlook for growth in the second half of the year.
—Equities yesterday: Technology stocks suffered a sharp reversal Tuesday as investors reassessed the sustainability of the artificial intelligence investment boom that has powered equity markets higher for much of 2026. The selling pressure began in Asia before spreading to Europe and the United States, highlighting growing unease over whether the massive capital expenditures being poured into AI infrastructure will ultimately generate returns sufficient to justify current valuations.
The downturn was particularly severe in the semiconductor sector. South Korean memory-chip giants Samsung Electronics and SK Hynix each fell roughly 12%, signaling investor concerns about future demand growth for high-bandwidth memory chips that have become critical components in AI servers. The weakness carried into U.S. trading, where companies tied directly to AI infrastructure and data-center expansion faced heavy selling.
Sandisk plunged nearly 14%, while Micron Technology, Arm Holdings and Marvell Technology also posted significant declines.
The market action reflects a shift from enthusiasm over AI’s long-term potential to questions about near-term economics. Investors are increasingly scrutinizing the extraordinary spending plans announced by major technology firms. Building AI data centers requires billions of dollars in capital investment for land, power infrastructure, advanced chips, networking equipment and cooling systems. While demand for AI computing remains strong, uncertainty persists regarding how quickly companies can monetize those investments and whether future revenues will justify the scale of spending now underway.
Another factor weighing on sentiment is the possibility that AI infrastructure growth could become more cyclical than many investors previously assumed. Over the past two years, markets largely treated AI spending as a virtually guaranteed growth story. However, some analysts are beginning to question whether hyperscale cloud providers and technology companies may eventually slow the pace of investment once initial buildouts are completed. If capital spending moderates, earnings expectations for chipmakers and equipment suppliers could prove overly optimistic.
The selloff underscores how heavily equity markets have become dependent on a relatively small group of AI-linked companies. Technology stocks have accounted for a disproportionate share of market gains this year, leaving valuations vulnerable to any signs of slowing growth or margin pressure. When sentiment shifts, the same concentration that drives rallies can accelerate declines.
By the closing bell, the damage extended beyond individual chipmakers. The tech-heavy Nasdaq fell 2.2%, while the broader S&P 500 lost 1.4%. The Dow proved more resilient, slipping just 0.1%, reflecting its lower exposure to high-growth technology shares.
Whether the decline marks a temporary correction or the beginning of a broader reassessment of AI-related valuations will depend largely on upcoming earnings reports and capital spending guidance. Investors are likely to focus less on promises of future AI growth and more on evidence that the enormous investments being made today can generate sustainable profits tomorrow. The market’s message Tuesday was clear: enthusiasm alone is no longer enough.
| Equity Index | Closing Price June 23 | Point Difference from June 22 | % Difference from June 22 |
| Dow | 51,666.84 | -45.87 | -0.09% |
| Nasdaq | 25,587.04 | -579.56 | -2.21% |
| S&P 500 | 7,365.46 | -107.33 | -1.44% |
—PCE inflation test could shape the Fed’s next move
A hot inflation reading would intensify debate over whether the Federal Reserve must shift from holding rates to raising them
Thursday’s Personal Consumption Expenditures (PCE) inflation report is shaping up as one of the most important economic releases of the summer because it arrives at a moment when financial markets are reassessing whether the Federal Reserve’s next move is still a rate cut — or whether policymakers may eventually be forced to raise rates again.
The PCE index is the Fed’s preferred inflation gauge because it captures a broader range of consumer spending than the Consumer Price Index and better reflects shifts in household behavior. Consensus forecasts suggest inflation remained elevated in May and June, with some economists expecting the headline measure to reach its highest level in roughly three years. Much of the recent pressure has stemmed from energy costs tied to the U.S./Iran conflict, as well as continued strength in services inflation and wage growth.
The timing is particularly important because markets have spent much of the past year expecting lower rates. That narrative is now being challenged. While oil prices have retreated sharply from their wartime highs — with Brent crude trading just above $75 per barrel, only modestly above pre-conflict levels — the inflation shock already worked its way through the economy. Meanwhile, Treasury yields have moved higher as investors demand greater compensation for inflation risk and expanding federal deficits.
The benchmark 10-year Treasury yield near 4.48% is especially significant because it affects borrowing costs throughout the economy, including mortgages, farm operating loans, business credit and commercial real estate financing. Even without Fed action, tighter financial conditions are already emerging through the bond market.
What has changed in recent weeks is that several major Wall Street firms are openly discussing the possibility of rate hikes. Economists at Bank of America, Deutsche Bank and BNP Paribas argue that inflation has become more persistent than expected and that the Fed may need to respond. Bank of America economist Aditya Bhave has projected three quarter-point rate increases beginning in September, arguing that inflation pressures have become “unambiguously worse.”
Not everyone agrees. Economists at UBS and several other firms contend that the market is overreacting to a temporary inflation spike driven largely by geopolitical events. Their view is that lower oil prices, slowing economic growth and easing supply-chain pressures should eventually bring inflation back down without requiring additional monetary tightening.
The debate highlights a critical distinction: a single hot PCE report is unlikely to trigger an immediate rate increase. Federal Reserve officials generally want to see several months of sustained inflation pressure before changing policy direction. However, another unexpectedly strong reading would reinforce concerns that inflation is becoming embedded again, particularly if core PCE — which excludes food and energy — also accelerates.
As for the odds of a coming rate hike, they have risen noticeably but remain far from a consensus outcome. CME FedWatch puts probabilities for a 25-basis-point increase at the September meeting at 51% vs. 29.5% for a steady rate decision. Steady rates are still the expectation for July. Based on current market pricing and economist forecasts, the probability of at least one rate increase before year-end appears to be just over 59%, depending on the inflation data over the next several months. The likelihood of multiple hikes, as projected by Bank of America, remains substantially lower and would likely require a series of strong inflation reports coupled with continued economic resilience.
Political considerations will also be closely watched. The Fed, now led by Chair Kevin Warsh, has repeatedly emphasized its independence, but any policy move close to the November midterm elections would inevitably draw scrutiny. The central bank faced criticism from both Republicans and Democrats after policy decisions during previous election cycles, making officials especially sensitive to perceptions that monetary policy could influence politics.
For agriculture and rural America, the stakes are significant. Higher interest rates would increase financing costs for land purchases, equipment loans, operating credit and agribusiness investments at a time when many producers are already facing compressed margins. Conversely, if inflation remains elevated, input costs could stay higher for longer, creating a different set of challenges for farm profitability.
Ultimately, Thursday’s PCE report may not determine the Fed’s next move by itself, but it could substantially reshape expectations. If inflation shows signs of peaking, markets may regain confidence that rates will remain on hold. If inflation surprises to the upside again, the conversation on Wall Street could shift from when the Fed cuts rates to whether the next move is up. That possibility, once viewed as remote, is now firmly back in the discussion.
| AG MARKETS |
—Grain market firms overnight as weather and wheat concerns support trade
Corn and wheat lead gains while soy complex trades mixed amid improving crop prospects and shifting global demand signals
Overnight grain trade was modestly higher across most major contracts, with corn, wheat, and soybean meal attracting buying interest while soybean oil weakened.
July corn futures rose 1 1/2 cents to $4.11 1/4 per bushel, July soybeans gained 1/2 cent to $11.17 1/2, and July soybean meal climbed $2.80 to $305.70 per ton. July soybean oil was down 0.57 cents per pound (57 points) overnight, trading at 70.02 cents per pound.
In wheat, July Chicago SRW futures advanced 3 1/4 cents to $5.90 and July Kansas City HRW wheat added 4 3/4 cents to $6.23. July soybean oil slipped 57 points to 70.02 cents per pound.
Corn continues to find underlying support from favorable ethanol margins, steady export demand, and uncertainty surrounding weather patterns heading into the critical pollination period. While recent rains have improved soil moisture across portions of the western and northwestern Corn Belt, forecasts continue to show periods of heat developing as the calendar turns toward July. Traders remain reluctant to establish large short positions with crop development still in its early reproductive stages and weather risk premiums historically increasing during late June and July.
The soybean complex remains divided. Strength in soybean meal reflects expectations for solid domestic crush demand and tighter global protein meal supplies. Conversely, soybean oil is retreating as energy markets weaken following the sharp decline in crude oil prices and reduced geopolitical risk in the Middle East. The drop in oil has tempered enthusiasm for renewable diesel feedstock demand in the short term, weighing on soybean oil despite generally supportive longer-term biofuel policies.
Wheat futures are drawing support from both U.S. and international developments. Harvest delays continue in portions of the Southern Plains following recent heavy rainfall, while global traders are closely monitoring Russian spring wheat production prospects. Several private analysts have lowered expectations for Russian spring wheat acreage because of excessive rainfall and delayed planting. At the same time, Russian July FOB wheat offers remain steady near $233 per metric ton, keeping Black Sea wheat competitive but offering little additional downside pressure to world values.
Overall, the overnight session suggests grain markets are stabilizing after recent volatility. Corn remains focused on summer weather, soybeans are balancing favorable crop conditions against solid demand, and wheat is finding renewed support from production concerns in key exporting regions. With weather forecasts, export activity, and end-of-month positioning all in play, traders are likely to remain cautious but increasingly attentive to any threat that could trim yield potential during the next several weeks.
—International grain markets firm on wheat, mixed on vegetable oils
Paris wheat rallies while Russian export values hold steady amid growing questions over spring wheat acreage
International grain markets were mixed on June 24, with wheat values strengthening in Europe while vegetable oil markets softened. Paris milling wheat futures gained €4.00/metric ton to €210.00/MT, signaling renewed concern about global wheat supplies despite generally favorable Northern Hemisphere crop prospects. Meanwhile, Russian July FOB wheat offers were unchanged at $233/MT, reflecting a relatively stable Black Sea export market even as traders increasingly focus on weather-related risks to Russia’s spring wheat crop.
At current exchange rates, Paris wheat at €210/MT equates to roughly $243-$245/MT, or about $6.60-$6.70 per bushel. That places European wheat at a premium to nearby Chicago wheat futures, which have been trading near $5.85-$5.90 per bushel. Russian FOB wheat at $233/MT converts to approximately $6.34 per bushel, maintaining Russia’s traditional pricing advantage in key export markets across North Africa, the Middle East and parts of Asia. The narrowing spread between European and Russian wheat values suggests buyers are becoming more sensitive to potential production risks in the Black Sea region.
A growing source of market attention is Russia’s spring wheat belt. Several private analysts have begun trimming spring wheat acreage estimates following excessive rainfall and delayed fieldwork across portions of Siberia and the Urals. While moisture generally supports yield potential once crops are established, persistent rains can reduce planted area, delay emergence and increase disease pressure. Spring wheat represents a smaller share of total Russian production than winter wheat, but it remains important for higher-protein export supplies. Analysts note that any meaningful reduction in spring wheat acreage could tighten supplies of premium milling wheat later in the marketing year and help support global wheat values. Russia remains the world’s largest wheat exporter, so even modest production adjustments can influence international price direction.
In the vegetable oil sector, Malaysian August palm oil futures fell 24 ringgit to 4,604 ringgit/MT. The decline translates to roughly $1,085-$1,090/MT and reflects pressure from weaker crude oil prices and profit-taking after recent gains. Lower palm oil values can weigh on competing vegetable oils, including soybean oil, although the broader oilseed complex continues to receive support from biofuel demand expectations in several major consuming countries.
For U.S. producers, the international price structure remains generally supportive. Russian wheat continues to set the floor for global export values, but the emergence of potential spring wheat production issues in Russia could limit further downside risk in world wheat markets. At the same time, strong competition from Black Sea exporters and ongoing Northern Hemisphere harvest pressure suggest rallies may remain measured unless weather concerns intensify further. The key market question over the next several weeks will be whether Russia’s spring wheat acreage losses are large enough to offset expectations for another sizable winter wheat crop.
—European heat wave raises crop risks as temperatures top 110 degrees in France
Extreme heat across France, Germany, Spain and Italy is increasing stress on corn, wheat and livestock, creating fresh uncertainty for global grain markets during a critical growing period
A powerful early summer heat wave sweeping across Europe is becoming an increasingly important issue for global agricultural markets as temperatures reach levels rarely seen in major crop-producing regions. In France, temperatures climbed as high as 44.3 degrees Celsius (111.7 degrees Fahrenheit) in some areas, while Bordeaux reached 41.9 degrees Celsius (107.4 degrees Fahrenheit) and Poitiers topped 41.2 degrees Celsius (106.2 degrees Fahrenheit). The extreme temperatures are raising concerns about crop development, soil moisture depletion and livestock stress across the continent.
France, the European Union’s largest grain producer, is at the center of the weather concern. While winter wheat benefited from generally favorable growing conditions earlier in the season, prolonged temperatures above 100 degrees Fahrenheit can still reduce grain fill, lower test weights and hurt overall quality. The greater concern is corn, which is entering critical growth stages and is significantly more vulnerable to heat and moisture stress. If the current weather pattern extends into July, pollination and yield potential could come under increasing pressure.
The risks extend well beyond France. Germany, Italy and Spain are also experiencing unusually hot and dry conditions. In Spain, where drought concerns have become a recurring issue in recent years, the heat is accelerating moisture losses and increasing irrigation requirements. Northern Italy’s corn-growing regions are facing similar challenges as water demand rises during a period when crops require substantial moisture to maintain yield potential.
Livestock producers are also being affected. Dairy cows, beef cattle and hogs all experience performance losses during extreme heat events. Milk production can decline, feed intake often falls and weight gains slow. Pasture conditions may deteriorate if rainfall remains limited, potentially tightening forage supplies and increasing feed costs later in the year.
From a market perspective, the heat wave arrives at a time when global grain prices have been under pressure from generally favorable crop conditions in the United States and expectations for ample world supplies. However, weather threats in Europe could begin to offset some of that bearish outlook if production estimates start to decline. Traders will be especially focused on corn because heat during pollination can have an outsized impact on final yields.
For U.S. farmers, the European situation bears close watching. A smaller European grain crop could improve export opportunities for U.S. corn and wheat later in the marketing year, particularly if quality issues emerge in European wheat production. While it is too early to quantify crop losses, temperatures exceeding 110 degrees Fahrenheit in parts of France underscore the severity of the weather pattern and the potential for agricultural impacts if relief does not arrive soon.
The next several weeks will be critical. Weather forecasts will determine whether this heat wave proves to be a short-lived event or develops into a more prolonged summer drought. With crops entering key reproductive stages and soil moisture reserves beginning to decline, Europe is entering a period where weather could become a major driver of global agricultural markets.
—El Niño returns to reshape South American crop prospects
Developing weather pattern could create winners and losers across South America, raising the potential for renewed volatility in global grain markets and shifting trade flows in 2027
The confirmation of a new El Niño weather pattern for the second half of 2026 is rapidly becoming one of the most important variables facing global agricultural markets. South America has emerged as the world’s dominant supplier of soybeans and a critical exporter of corn and wheat, meaning any significant weather disruptions across the region can have far-reaching consequences for global grain supplies, trade flows, and prices.
According to Hedgepoint Global Markets, the upcoming El Niño event is unlikely to produce a uniform impact across the continent. Instead, forecasters anticipate a sharp divide between southern producing regions and Brazil’s Center-North agricultural belt. Historically, El Niño episodes tend to increase rainfall across southern Brazil, Argentina, Uruguay, and Paraguay, often improving soil moisture reserves and reducing drought risk during key crop development stages. For producers in those regions, the weather pattern could support yield potential and provide a more favorable growing environment after several years of weather-related production challenges.
The greatest weather risk lies in Brazil’s Center-West and Center-North agricultural regions, particularly Mato Grosso, Goiás, Mato Grosso do Sul, Tocantins, Maranhão, Piauí, and Pará. These areas account for a substantial share of Brazil’s soybean production and serve as the foundation of the country’s massive safrinha corn crop. During previous El Niño events, these regions have often experienced below-normal rainfall and periods of above-normal temperatures that disrupted planting progress and reduced yield potential.
Mato Grosso deserves special attention because it is Brazil’s largest soybean-producing state and the cornerstone of the country’s export machine. If rainfall deficits emerge during the planting season, soybean seeding could be delayed, creating a domino effect that extends into the safrinha corn crop. Since second-crop corn is planted immediately after soybean harvest, any delays can shorten the growing season and expose corn to greater heat and moisture stress during pollination and grain fill.
The timing of the developing weather pattern adds another layer of concern. South America’s growing season begins in earnest during the second half of the year, meaning El Niño’s influence could coincide directly with planting decisions, crop establishment, pollination, and grain filling. Markets typically become increasingly sensitive to weather forecasts when climate anomalies emerge during these critical stages because even modest production changes in Brazil or Argentina can significantly alter global balance sheets.
Early indications suggest the 2026-27 El Niño may be moderate rather than extreme, although its ultimate intensity remains uncertain. Market participants are already comparing the developing event with notable El Niño episodes in 1997-98 and 2015-16, both of which produced significant agricultural disruptions across South America. The 2015-16 event brought excessive rainfall to parts of Argentina and southern Brazil while contributing to dryness in northern Brazil. Argentina experienced flooding and quality issues in portions of its soybean crop, while parts of Brazil faced harvest and logistical challenges.
What makes this cycle particularly important is that Brazil’s influence on global grain and oilseed trade is far greater today than it was during earlier El Niño events. The country has become the world’s largest soybean exporter and one of the leading corn suppliers. As a result, weather disruptions that once had regional implications now carry global consequences. Moreover, world grain inventories are not as burdensome as they were during some previous cycles, making markets potentially more sensitive to production threats.
For soybean markets, the implications could be substantial. Brazil has become the world’s dominant supplier, and expectations for another large crop are already embedded in many supply forecasts. If dryness develops across major Center-North producing areas, traders may begin building weather risk premiums into futures markets much earlier than normal. At the same time, favorable moisture in Argentina could support a recovery in production, potentially offsetting some losses elsewhere. The net impact on overall South American soybean supplies will depend on the severity and duration of rainfall deficits in Brazil’s largest producing states.
Corn markets face a similar dynamic. Brazil’s second-crop corn harvest has become a major competitor to U.S. exports and now accounts for roughly three-quarters of the country’s total corn production. Any weather-driven reduction in safrinha corn output would tighten global feed grain supplies and could increase demand for U.S. corn later in the marketing year. Importers across Asia, North Africa, and the Middle East would likely be forced to seek alternative suppliers if South American export availability declines.
The potential shift in global trade flows could be significant. Reduced Brazilian soybean production would likely redirect some demand toward U.S. supplies during the first half of 2027, potentially strengthening export opportunities for American farmers. China, which relies heavily on Brazilian soybeans, could once again become a more active buyer of U.S. soybeans if South American supplies tighten. Similarly, a smaller Brazilian corn crop would improve the competitiveness of U.S. corn exports and could help the United States regain market share that has steadily migrated to Brazil over the past decade.
Wheat markets present a more mixed picture. Increased rainfall across Argentina and southern Brazil could benefit wheat production and partially offset concerns elsewhere. However, if El Niño contributes to adverse weather in other key exporting regions simultaneously, wheat prices could also find support from tightening global supplies.
The broader economic implications extend beyond agriculture. South America accounts for a significant share of global oilseed and feed grain exports, meaning production disruptions can ripple through livestock feeding costs, vegetable oil markets, biofuel production, and ultimately consumer food prices. A weather-driven reduction in soybean or corn output could contribute to renewed food inflation concerns just as many economies are attempting to stabilize prices following several years of supply-chain disruptions and geopolitical shocks.
While forecast confidence will improve in coming months, the return of El Niño virtually guarantees that weather will once again become a dominant market driver. Traders, producers, and policymakers will be closely monitoring rainfall trends across Brazil and Argentina throughout the remainder of 2026. If the expected weather contrasts emerge, the next South American crop could play a decisive role in determining global grain supplies, commodity prices, and trade flows throughout 2027.
—Ag markets Tues., June 23:grain, livestock and cotton markets retreat as favorable weather pressures commodities
Corn and wheat lead broad-based agricultural selloff while soybeans stabilize and hogs extend recovery
Agricultural futures ended June 23 mostly lower as traders focused on favorable U.S. crop weather, harvest pressure in wheat, weaker energy prices and a stronger U.S. dollar. While soybeans managed a modest gain and lean hogs continued to recover, the broader tone across commodity markets was defensive as speculative sellers regained control in several sectors.
Corn futures remained under pressure as July corn fell 1¾ cents to $4.09¾ per bushel, marking another contract-low close. The market continues to struggle against a backdrop of near-ideal growing conditions across much of the Corn Belt. Recent rains and moderate temperatures have eased concerns about early-season stress, reinforcing expectations for strong yield potential. Technical indicators also remain bearish, with trend-following funds continuing to add short positions as prices push deeper into new-crop lows. With pollination approaching and weather forecasts remaining generally favorable, the market currently lacks a bullish catalyst capable of reversing sentiment.
Soybeans were relatively resilient, with July futures gaining 1¼ cents to finish at $11.17 per bushel despite weakness elsewhere in the grain complex. The soybean market largely consolidated recent gains as traders balanced favorable U.S. weather against continued uncertainty surrounding global vegetable oil supplies and export demand. Strength in July soybean meal, which rose $3.10 to $302.90 per ton, reflected short covering after an extended decline and renewed optimism about feed demand. Soybean oil moved in the opposite direction, falling 56 points to 70.59 cents per pound as crude oil prices tumbled to their lowest levels in nearly three months amid easing geopolitical concerns surrounding Iran. The divergence between meal and oil underscores the market’s ongoing struggle to determine which product will drive soybean values during the summer months.
Wheat futures posted the largest declines of the day as July Chicago wheat fell 10¾ cents to $5.86¾, July Kansas City wheat dropped 15¼ cents to $6.18¼ and September Minneapolis wheat declined 24¾ cents to $5.88. The market faced a combination of harvest pressure, improving production prospects in parts of the Northern Hemisphere and renewed technical selling. Winter wheat harvest activity is expanding across the Southern Plains despite weather delays, while traders increasingly view recent weather threats in Europe and the Black Sea region as insufficient to significantly alter global supply expectations. Analysts say the sharp losses suggest speculative buying tied to weather concerns is being unwound as traders refocus on ample world wheat inventories and stiff export competition from Russia.
Cotton futures also came under significant pressure, with July cotton falling 84 points to 75.21 cents per pound. The fiber market was weighed down by a stronger U.S. dollar, lower crude oil prices and weakness in broader financial markets. The stronger dollar raises the cost of U.S. cotton for foreign buyers, while declining petroleum prices reduce the competitive advantage of natural fibers versus synthetic alternatives. From a technical perspective, cotton remains trapped in a broad trading range, but Tuesday’s selloff indicates traders remain skeptical about demand growth amid slowing global economic activity.
Livestock markets experienced a round of profit-taking after recent rallies. August live cattle futures declined $1.35 to $246.00 per hundredweight, while August feeder cattle fell $2.275 to $368.15. The setback appears largely technical rather than fundamental. Cash cattle markets remain historically strong, beef demand has held up well despite high prices and cattle supplies remain exceptionally tight. However, after reaching record or near-record levels in recent sessions, futures traders took profits as broader commodity markets weakened. The long-term cattle outlook remains supported by limited herd expansion and constrained feeder supplies, suggesting breaks may continue to attract commercial buying interest.
Lean hog futures were the lone bright spot in livestock, with August hogs gaining 50 cents to $97.225 and reaching a two-week high. The advance reflected continued short covering and improving technical momentum. While the broader trend remains cautious due to concerns about export demand and ample pork supplies, the market is showing signs of stabilizing after a prolonged decline. Traders appear increasingly willing to question the bearish outlook, particularly if domestic demand remains firm during the peak summer grilling season.
Overall, Tuesday’s trade reflected a market increasingly focused on favorable U.S. crop conditions and easing geopolitical concerns. Corn and wheat remain particularly vulnerable to additional downside pressure if weather forecasts remain benign, while livestock traders continue to weigh historically tight cattle supplies against lofty price levels. For now, weather remains the dominant influence in grain markets, and unless a significant heat or drought threat emerges during July, rallies are likely to encounter strong selling pressure from both producers and speculative funds.
| Commodity | Contract Month | June 23 Close | Change vs. June 22 |
| Corn | July | $4.09 3/4 | –1 3/4¢ |
| Soybeans | July | $11.17 | +1 1/4¢ |
| Soybean Meal | July | $302.90 | +$3.10 |
| Soybean Oil | July | 70.59 ¢ | –56 pts |
| Wheat (SRW) | July | $5.86 3/4 | –10 3/4¢ |
| Wheat (HRW) | July | $6.18 1/4 | –15 1/4¢ |
| Wheat (HRS) | September | $5.88 | –24 3/4¢ |
| Cotton | July | 75.21 ¢ | –84 pts |
| Live Cattle | August | $246.00 | –$1.35 |
| Feeder Cattle | August | $368.15 | –$2.275 |
| Lean Hogs | August | $97.225 | +$0.50 |
| FARM POLICY |
—Senate farm bill draft opens negotiations, but SNAP fight looms large
Boozman seeks bipartisan path forward, yet disagreement over food aid funding changes could become the biggest obstacle to completing a long-delayed farm bill
The release of a Senate farm bill discussion draft by Senate Agriculture Committee Chairman John Boozman (R-Ark.) marks the most significant step yet toward completing a full five-year farm bill, but it also highlights the political hurdles that remain before Congress can send legislation to President Trump. After years of extensions and stopgap measures, Boozman is attempting to restart formal negotiations with a proposal that updates farm safety-net programs, reauthorizes expiring initiatives and incorporates several bipartisan priorities while avoiding some of the most divisive policy fights that have surfaced during recent debates. Link to our special report.
The draft reflects a strategic effort by Senate Republicans to keep the focus on production agriculture and risk management rather than reopening contentious battles that could fracture support. Notably absent is language addressing pesticide pre-emption, a proposal sought by some farm groups and chemical manufacturers but opposed by environmental and consumer advocates. The measure also leaves untouched the Supplemental Nutrition Assistance Program changes enacted in last year’s One Big Beautiful Bill, a decision that immediately drew concern from Democrats whose votes may ultimately be needed to move the legislation through the Senate.
That SNAP issue could become the defining challenge of the farm bill debate. The reconciliation law shifted a portion of SNAP benefit costs to states, a change many governors and state agencies are still evaluating. Democrats argue implementation should be delayed until states have a clearer understanding of the fiscal and administrative impacts. Sen. Tina Smith (D-Minn.), a senior member of the Ag Committee, has framed the matter as a prerequisite for broader farm bill negotiations, warning that states across the political spectrum could face significant budget pressures under the new framework.
The political math favors Democrats on this issue. While Senate Republicans can advance a draft through committee on party-line support, they are unlikely to reach the 60-vote threshold needed on the Senate floor without at least several Democratic votes. That gives Democrats leverage to demand changes or delays to SNAP provisions before supporting a broader package. Boozman’s repeated emphasis on bipartisanship suggests he understands that reality, but it remains unclear how much flexibility Republican leadership is willing to show on a policy victory they secured only last year.
From an agricultural perspective, the draft demonstrates that Senate Republicans are trying to build upon portions of last year’s reconciliation package rather than start from scratch. Many commodity, conservation, research and rural development programs still require reauthorization despite the farm bill extension enacted previously. Producers have increasingly expressed frustration with the uncertainty surrounding farm policy, particularly as input costs remain elevated and weather volatility continues to increase production risks. The draft attempts to provide that certainty while modernizing several programs that farm groups have argued no longer reflect current economic conditions.
The timing is also important. Boozman has indicated he would like a committee markup before the August recess, creating pressure on negotiators to identify areas of agreement quickly. Yet history suggests farm bills are rarely completed on an accelerated timeline when major disagreements over nutrition policy remain unresolved. Because SNAP traditionally accounts for the largest share of farm bill spending, disputes over food assistance often become inseparable from debates over farm programs themselves.
The broader significance of the discussion draft is that it finally gives lawmakers a concrete legislative framework around which negotiations can occur. For much of the past two years, farm bill discussions have centered on concepts rather than legislative text. Now the debate shifts from what lawmakers want in a farm bill to what they are willing to compromise on to get one enacted. Whether that produces a bipartisan agreement before year-end may depend less on commodity programs and crop insurance than on whether Republicans and Democrats can find common ground on SNAP implementation and state cost-sharing requirements.
In that sense, the Senate draft accomplishes two things simultaneously: it advances the farm bill process farther than it has been in years, while also revealing that the toughest negotiations may still lie ahead.
| WILDFIRE AID |
—House sends wildfire aid streamlining bill to Trump after overwhelming bipartisan vote
Legislation aims to accelerate USDA conservation payments for producers rebuilding after catastrophic wildfire losses
The House on Tuesday overwhelmingly approved legislation designed to speed federal disaster assistance to farmers and ranchers whose land has been damaged by wildfires, sending the measure to President Donald Trump for his signature after a decisive 386-19 vote.
The bill focuses on the USDA’s Emergency Conservation Program (ECP), which provides cost-share assistance to producers restoring farmland damaged by natural disasters. Under current procedures, producers often face lengthy delays before receiving reimbursement for debris removal, fence replacement, water infrastructure repairs and other conservation work needed to return land to production. Supporters of the legislation argue those delays can be particularly damaging in wildfire-stricken areas where ranchers and farmers face substantial upfront costs to restore operations.
The measure reflects growing bipartisan concern about the increasing frequency and severity of wildfires affecting agricultural regions across the West and Great Plains. While Congress has repeatedly provided supplemental disaster assistance in recent years, lawmakers from both parties have complained that the delivery of aid can be too slow, forcing producers to absorb significant financial burdens while awaiting federal reimbursement.
The strong bipartisan vote suggests broad agreement that improving the speed of disaster assistance is one area where Congress can act without becoming entangled in larger debates over federal spending or climate policy. The legislation also highlights the importance of disaster programs as Congress continues broader discussions over agricultural risk management tools, including crop insurance, conservation programs and ad hoc disaster assistance.
Details: One of the most notable provisions expands eligibility for ECP assistance beyond traditional natural disasters. Under the legislation, producers could qualify for aid when damage results from a non-natural wildfire that spreads because of natural causes, as well as for any wildfire caused by the federal government. The change addresses concerns raised by producers who have found themselves excluded from assistance because of technical limitations in existing law regarding the origin of a fire.
The legislation also substantially increases the amount of advance assistance producers can receive. Current law allows only a 25% advance payment and limits that authority largely to fencing projects. The new measure would allow producers to receive an advance payment equal to 75% of replacement costs and 50% of repair or restoration costs for farmland and conservation structures requiring immediate attention. Eligible projects could include fencing, irrigation systems, livestock water infrastructure, debris removal and other conservation improvements damaged by wildfire.
Supporters argue the higher advance-payment authority is perhaps the bill’s most important provision because it addresses one of the biggest complaints from producers following disasters: the need to spend large sums upfront before federal assistance arrives. Ranchers often must quickly replace fences and water systems to maintain livestock operations, while crop producers may need immediate repairs to restore farmland to production.
The measure also updates USDA’s Emergency Forest Restoration Program (EFRP), which assists owners of nonindustrial private forestland damaged by natural disasters. Current law does not permit advance payments under the program. The legislation would allow affected forestland owners to receive advance cost-share payments covering up to 75% of the cost of approved emergency restoration measures, giving landowners access to capital earlier in the recovery process.
For livestock producers, the timing is particularly significant. Wildfires often destroy fencing, grazing infrastructure and water systems, creating immediate operational challenges that can persist long after the flames are extinguished. Accelerated ECP payments could allow ranchers to begin rebuilding more quickly and reduce reliance on short-term borrowing to cover restoration costs.
The bill’s passage comes as lawmakers continue to hear concerns from agricultural groups that natural disaster recovery programs should function more like emergency response tools than traditional reimbursement programs. Industry organizations have argued that quicker payments can reduce long-term economic damage, help preserve farm and ranch viability, and speed recovery in rural communities heavily dependent on agriculture.
With the legislation now headed to President Trump’s desk, the measure is expected to become law and provide USDA with additional authority to expedite assistance following future wildfire disasters. The overwhelming margin in both chambers underscores the political appeal of targeted disaster relief measures at a time when many broader farm policy issues remain difficult to resolve.
| ENERGY MARKETS & POLICY |
—Wed., June 24: oil rout deepens as Middle East risk premium evaporates
Brent drops below $76, WTI slides as traders shift focus back to supply and demand
Crude oil prices extended their sharp decline Wednesday, with international benchmark Brent crude falling below $76 per barrel and touching its lowest level since before the U.S./Iran conflict erupted. The move underscores how quickly geopolitical risk premiums can disappear once traders conclude that a worst-case supply disruption is unlikely.
As of Wednesday morning, August Brent crude futures were trading near $75.60 per barrel, down roughly $1.40 on the session, while U.S. benchmark West Texas Intermediate (WTI) crude was near $72.10 per barrel, down about $1.30. Both contracts have now surrendered nearly all of the gains generated by the U.S. and Israeli strikes on Iranian targets earlier this year.
The market’s reversal has been driven largely by easing fears that Iran would retaliate by disrupting traffic through the Strait of Hormuz, the narrow waterway that handles roughly one-fifth of global petroleum shipments. In the days following military action against Iran, traders briefly priced in the possibility of a major supply shock that could have sent crude above $90 or even $100 per barrel. Those fears have steadily faded as oil exports from the Persian Gulf have continued to flow normally and shipping traffic has remained largely uninterrupted.
The speed of the decline highlights a recurring theme in energy markets: geopolitical events often create dramatic short-term price spikes, but those gains rarely last unless actual barrels are removed from the market. Traders are increasingly concluding that while tensions remain elevated, the physical oil supply system has proven far more resilient than initially feared.
Adding to the pressure, President Donald Trump publicly called for a Department of Justice investigation into gasoline and diesel pricing, accusing oil companies of failing to pass along lower crude costs to consumers. While such comments are unlikely to directly influence oil fundamentals, they reinforce the administration’s desire to keep energy prices contained amid broader concerns about inflation and consumer spending.
The retreat in crude also reflects a market that is refocusing on underlying fundamentals. Global inventories remain relatively comfortable, OPEC+ still retains significant spare production capacity, and concerns persist about the pace of economic growth in several major consuming regions. China’s recovery remains uneven, while manufacturing activity across parts of Europe continues to struggle. Those demand-side concerns are increasingly outweighing geopolitical headlines.
For agriculture and rural America, the drop in crude prices carries mixed implications. Lower energy costs can reduce expenses for diesel fuel, grain drying, transportation and fertilizer production, providing some relief to producers facing tight margins. However, weaker oil prices can also pressure biofuel economics, particularly for renewable diesel and biodiesel producers that depend on favorable energy markets to support margins and feedstock demand.
The key question now is whether the market has completely removed the Middle East risk premium or merely reduced it. Any renewed military escalation involving Iran, Israel, or Gulf shipping routes could quickly reverse sentiment. For the moment, however, traders appear convinced that the most severe supply disruption scenarios will not materialize.
The result is a crude market that has rapidly shifted from pricing geopolitical fear to pricing economic reality. Unless a new supply threat emerges, attention is likely to remain focused on global demand trends, OPEC+ production decisions, and the broader health of the world economy rather than developments in the Persian Gulf.
| CHINA |
—China signals greater yuan flexibility as dollar strength persists
Fourth straight weaker daily fix suggests Beijing is prioritizing economic support over currency defense
China’s central bank set the yuan’s daily reference rate weaker for a fourth consecutive trading session on Wednesday, a move that underscores Beijing’s willingness to allow greater currency flexibility as the U.S. dollar strengthens globally. While the adjustment was modest, the signal to financial markets was significant: Chinese policymakers appear increasingly comfortable with a gradual depreciation of the yuan if it helps support economic growth and export competitiveness.
The daily fixing mechanism remains one of the most closely watched policy tools of the People’s Bank of China. By setting a weaker midpoint, authorities are effectively acknowledging the reality of widening interest-rate differentials between China and the United States. The Federal Reserve’s reluctance to ease monetary policy amid stubborn inflation contrasts sharply with China’s efforts to stimulate a slowing economy through lower borrowing costs and accommodative liquidity measures. That divergence naturally places downward pressure on the yuan.
For China’s export sector, a weaker currency offers some advantages. Chinese manufacturers continue to face soft domestic demand, uneven property-sector conditions, and trade uncertainty abroad. A modestly weaker yuan can help offset some of those pressures by making Chinese goods more competitive in global markets. At a time when export growth remains one of the brighter spots in China’s economy, policymakers have little incentive to aggressively defend the currency if depreciation remains orderly.
Meanwhile, Beijing is attempting to strike a delicate balance. Chinese officials remain wary of triggering large capital outflows or creating the perception that they are intentionally devaluing the currency to gain a trade advantage. Previous episodes of rapid yuan weakness have led to financial market volatility and heightened concerns about capital flight. As a result, the central bank is likely to continue managing the pace of any depreciation rather than allowing a sharp one-way move lower.
The broader backdrop is the renewed strength of the U.S. dollar. Expectations that the Federal Reserve could keep interest rates elevated longer—or even consider additional tightening if inflation remains persistent—have supported Treasury yields and boosted demand for dollar-denominated assets. Those forces have pressured many currencies across Asia, not just the yuan.
For agricultural markets, currency movements bear close watching. A weaker yuan can reduce the purchasing power of Chinese importers for dollar-denominated commodities such as soybeans, corn, wheat, cotton, and meat products. While China’s food-security priorities and supply needs remain the primary drivers of agricultural purchases, sustained yuan weakness could make imports more expensive and potentially influence buying patterns at the margins.
The latest fixing suggests Chinese authorities are prepared to tolerate some additional currency weakness as long as it remains controlled. That approach reflects a broader policy priority emerging in Beijing: supporting growth and exports in a challenging economic environment, even if it means allowing the yuan to drift lower against a stronger U.S. dollar. For global commodity markets and U.S. agricultural exporters, the trajectory of the yuan will remain an important variable to watch in the months ahead.
| FOOD POLICY & FOOD INDUSTRY |
—USDA moves to implement SNAP administrative cost shift to states
Proposed rule codifies major cost transfer mandated by GOP OB3
USDA’s Food and Nutrition Administration (FNA) has formally proposed regulations implementing one of the most consequential Supplemental Nutrition Assistance Program (SNAP) changes contained in the One Big Beautiful Bill Act of 2025: cutting the federal government’s share of state SNAP administrative costs from 50% to 25%, beginning in fiscal year 2027. Link
The proposal itself does not create new policy. Rather, it codifies into federal regulations a statutory requirement enacted by Congress and signed by President Donald Trump in July 2025. USDA notes repeatedly that it has little discretion in the matter because the change was mandated by law.
The financial implications, however, are substantial. USDA estimates the rule will reduce federal spending by approximately $16.9 billion between FY 2027 and FY 2031 while requiring states to absorb an equal amount in additional administrative costs — about $3.4 billion annually nationwide. The department assumes the overall shift will not significantly affect SNAP participation or benefit levels, though it specifically seeks public comment on whether the transfer of costs could alter program operations or spending decisions at the state level.
The proposal arrives at a politically sensitive moment as congressional Democrats continue criticizing broader SNAP changes enacted in last year’s reconciliation package. While much of the debate has focused on work requirements and benefit eligibility, the administrative funding shift may prove equally important because it directly affects state budgets. States will be required to cover three-quarters of SNAP administrative expenses beginning in FY 2027, compared to the current 50-50 cost-sharing arrangement.
For governors and state legislatures, the change could force difficult budget decisions. Administrative expenses include eligibility determination, case management, technology systems, fraud prevention efforts, outreach activities and program oversight. Although USDA argues the rule simply reallocates existing costs without creating new administrative burdens, state officials have warned that absorbing billions in additional expenses could pressure other priorities or encourage efforts to streamline SNAP operations.
Importantly, the proposal leaves several exceptions intact. SNAP Employment and Training programs will continue receiving existing federal reimbursement levels, including 50% reimbursement for certain administrative and participant support costs. Likewise, states and tribal organizations administering SNAP on reservations will continue receiving 75% federal reimbursement for approved administrative expenses.
The proposed rule also demonstrates how implementation of the 2025 budget law is beginning to move from legislative debate into regulatory reality. While Senate Ag Committee Chairman John Boozman (R-Ark.) and farm bill negotiators continue wrestling with SNAP-related issues in current farm bill discussions (see related items), USDA is already moving ahead with regulations necessary to carry out provisions enacted last year.
Comments on the proposed rule are due by Aug. 24. Given the size of the fiscal shift and the continuing partisan disputes surrounding SNAP policy, state governments, anti-hunger advocates and congressional Democrats are likely to use the comment period to argue that the administrative cost transfer could ultimately affect program delivery even if benefit levels remain unchanged.
| LABOR & IMMIGRATION POLICY |
— H-2A program usage continues to accelerate
Record first-half certifications put the guest-worker program on pace for an all-time high as farmers keep leaning on foreign labor
According to a Market Intel analysis published this week by the American Farm Bureau Federation and written by AFBF associate economist Cameron Castillo (link), the H-2A temporary agricultural worker program has certified more than a quarter million positions in the first half of fiscal year 2026, putting the program on track to set a new full-year record.
Certifications have grown more than 25% since fiscal 2021, climbing from 317,619 that year to 398,258 in fiscal 2025, and AFBF’s data show the current pace running well ahead of any prior first half on record.
The first two quarters of fiscal 2026 totaled 254,688 certified positions, a 16.9% increase over the same period in fiscal 2025 and 19.2% above fiscal 2024’s first half. Most of that acceleration came in the second quarter, which posted 192,000 certifications — a 20.5% jump over the same quarter a year earlier and the largest single-quarter increase AFBF has recorded. The approval rate held steady at 97.6%, in line with the 97%-plus clearance rate the program has maintained every year since 2021.
The growth is geographically broad rather than concentrated: 43 of the 50 states posted gains relative to the first half of fiscal 2025, with a national average increase of 5.7%. AFBF’s state-level mapping shows the expansion stretching well beyond the traditional H-2A strongholds, though a handful of Southeast and West Coast states saw modest declines.
Within the top tier, the composition is shifting. Florida, Georgia, Washington, California and North Carolina together certified nearly 125,000 positions in the first half — just under half the national total — but the ranking among them is moving. Washington posted the most dramatic gain of any major state, with certifications up 67.2% year-over-year, and has now overtaken California for third place nationally, a reversal of the two states’ standing in recent full-year totals. Georgia grew 15.3% and is closing in on Florida’s lead. Florida itself posted a 5.1% first-half decline, but AFBF notes that’s consistent with its seasonal pattern, since Florida’s usage skews toward the third and fourth quarter harvest season; its 30,044 first-half certifications already represent 52.8% of its entire fiscal 2025 total.
AFBF points to two regulatory shifts behind the renewed momentum. A federal court vacated the 2023 wage disaggregation rule in August 2025, removing a requirement that had forced employers to file separate applications for distinct job duties and pay workers for tasks they might not always perform; that rule had slowed certification growth through fiscal 2023 and 2024.
Separately, a Department of Labor (DOL) interim final rule that took effect in October 2025 now lets employers use a dual-tiered wage structure and deduct housing and transportation costs from workers’ hourly pay, which lowered the federally mandated Adverse Effect Wage Rate in most states. Layered on top of both is a domestic labor market that simply isn’t supplying the workforce: unemployment stood at 4.3% in May 2026, and AFBF cites a fiscal 2025 figure showing only 182 of nearly 415,000 advertised seasonal farm jobs were filled by a domestic applicant — roughly four-hundredths of one percent. If the back half of fiscal 2026 tracks fiscal 2025’s third- and fourth-quarter pace of 180,491 certifications, AFBF projects a full-year total approaching 435,000, about 9% above fiscal 2025 and a new program high.
The more interesting story here may be cost, not just volume. The two regulatory changes both push in the direction of cheaper H-2A labor — one by simplifying paperwork and avoiding the multi-application wage exposure of disaggregation, the other by letting employers shave the AEWR through housing and transport deductions. That combination likely explains why certifications are accelerating even as the broader labor market stays tight: H-2A isn’t just becoming the only realistic labor source for many operations, it’s becoming a comparatively cheaper one too. Worth watching into harvest season is whether Washington’s surge holds — its 73.4% first-half share of last year’s full-year total is the highest of any top five state, and a state that reliant on H-2A for fruit and vegetable labor is also more exposed if enforcement posture or wage-rule litigation shifts again before peak season. Florida’s seasonal skew is a reminder that first-half comparisons can understate states with heavy Q3/Q4 demand, so the real test of whether fiscal 2026 hits that ~435,000 mark will show up in the next two USDA/DOL reporting cycles rather than in this snapshot.
| POLITICS & ELECTIONS |
—Mamdani’s primary sweep deepens Democratic divide ahead of midterms
New York mayor’s influence grows as progressive/socialist challengers defeat incumbents, giving Republicans a fresh line of attack
One year after his upset victory in New York City’s Democratic mayoral primary, Zohran Mamdani has demonstrated that his political influence extends well beyond City Hall. The victories Tuesday by three candidates he actively backed in New York congressional primaries represent one of the clearest signs yet that the Democratic Party’s progressive wing is gaining organizational strength in deep-blue urban districts, while simultaneously providing Republicans with new ammunition for the 2026 midterm campaign.
The most significant result came in New York’s 13th Congressional District, where Darializa Avila Chevalier, a democratic socialist and community organizer, narrowly defeated incumbent Rep. Adriano Espaillat. Espaillat, a longtime incumbent and chair of the Congressional Hispanic Caucus, entered the race with the support of prominent Democratic establishment figures, including New York Gov. Kathy Hochul. His defeat suggests that even well-established Democratic officeholders are increasingly vulnerable to insurgent challenges when confronted by energized progressive coalitions focused on affordability, housing costs and economic inequality.
A second victory came in the race to succeed retiring Rep. Nydia Velázquez, where state Assembly Member Claire Valdez defeated Brooklyn Borough President Antonio Reynoso by a substantial margin. Valdez, who is aligned with the Democratic Socialists of America, framed the result as evidence that progressive organizing is becoming institutionalized rather than remaining a protest movement. Her victory reinforces the notion that Democratic primary voters in some urban districts are increasingly receptive to candidates advocating more expansive government involvement in housing, healthcare and social welfare programs.
Perhaps equally notable was former New York City Comptroller Brad Lander defeating incumbent Rep. Dan Goldman. Lander had once competed against Mamdani for mayor but later became one of his strongest allies, illustrating how the mayor has built a broader coalition among progressive Democrats despite ideological and political differences.
Collectively, the three victories underscore a broader trend within Democratic politics. In heavily Democratic districts, the central debate increasingly revolves not around whether government should address affordability concerns, but how aggressively it should do so. Mamdani and his allies have successfully argued that rising living costs, housing shortages and economic insecurity require a more confrontational approach toward established institutions and party leadership. Their success suggests that message continues to resonate with a significant segment of Democratic primary voters.
The results are also likely to intensify internal Democratic debates heading into 2026 and the 2028 presidential cycle. Rep. Ro Khanna (D-Calif.), a potential presidential contender, argued that the New York outcomes signal the emergence of “a new party.” While that may overstate the immediate impact, the victories will undoubtedly strengthen progressive arguments that Democrats should lean more heavily into economic populism rather than centrist positioning.
Republicans, meanwhile, are expected to seize on the results as evidence that Democrats are moving further left. The National Republican Congressional Committee quickly portrayed the primaries as proof that Democratic leaders are losing control to ideological activists. GOP strategists have already used Mamdani as a political foil in competitive House races, and the emergence of additional progressive nominees is likely to expand those efforts. Whether that strategy succeeds nationally remains uncertain, particularly because many of the districts involved are among the most liberal in the country and may not reflect broader voter sentiment elsewhere.
The evening also delivered another reminder of President Donald Trump’s continuing influence in Republican primaries. In New York, Trump-backed businessman Anthony Constantino defeated establishment-supported state Assemblyman Robert Smullen in the race to replace retiring Rep. Elise Stefanik. The outcome reinforces a pattern that has persisted throughout Trump’s political career: his endorsement remains a powerful force in GOP nomination contests, even when opposed by state party organizations.
In South Carolina, the president effectively guaranteed himself a victory by endorsing both candidates in the Republican gubernatorial runoff. State Attorney General Alan Wilson defeated Lt. Gov. Pamela Evette by a wide margin after receiving support from Trump as well as endorsements from Rep. Nancy Mace, Rep. Ralph Norman and Sen. Ted Cruz.
Taken together, Tuesday’s results highlight a striking reality in both parties. Democrats continue to grapple with tensions between progressive/socialist activists and establishment leaders, while Republicans remain heavily influenced by Trump’s personal political brand. As the midterm elections approach, both developments are likely to shape candidate recruitment, campaign messaging and fundraising strategies. The immediate winners were Mamdani and Trump, but the broader significance lies in what the contests revealed about the continuing ideological realignment occurring inside both major political parties.
—GOP midterm exposure problem limits the size of the wave
Charlie Cook: republicans face a harsh environment, but a smaller battlefield
Veteran election analyst Charlie Cook argues that the central question of the 2026 midterm elections is no longer whether Republicans will lose seats, but rather how large those losses will be. Writing in the National Journal, Cook notes that history strongly favors losses for the party holding the White House, and current political indicators suggest Republicans are facing a significantly more difficult environment than President Donald Trump’s party confronted in 2018.
Cook points to Trump’s weak standing in public opinion surveys as the most important warning sign. “The question now is just how bad it will be,” he writes, citing approval ratings that are running below those seen before the major Democratic losses in 1994 and 2010. He argues that the danger for Republicans is no longer confined to Trump personally but may be spreading to down-ballot candidates as swing voters and less-engaged voters react to broader dissatisfaction with the administration.
Yet Cook’s analysis contains an important caveat that should temper Democratic expectations. He frames midterm outcomes through two lenses: “environment” and “exposure.” The environment is clearly unfavorable for Republicans, driven by Trump’s low approval ratings and a generic congressional ballot that consistently favors Democrats. Exposure, however, refers to the number of vulnerable seats available to change hands. On that front, Cook argues the modern political map offers far fewer opportunities for a landslide than in previous decades.
As Cook writes, “There aren’t many low-lying political areas left that can get swallowed up in a political storm.” Decades of partisan sorting and redistricting have dramatically reduced the number of competitive House districts. With only about three dozen House races currently viewed as genuinely competitive, Republicans may be protected from the kind of 40- to 60-seat wipeouts seen in earlier wave elections. In other words, even if the political climate deteriorates further, there may simply not be enough vulnerable districts available to produce a historic Democratic gain.
The Senate presents a different picture. Because control may hinge on only a handful of races, candidate quality could become as important as national trends. Cook identifies Michigan as Democrats’ most vulnerable seat and suggests the outcome could depend heavily on the Democratic nominee. He also highlights Maine and Texas as races where nomination choices may prove decisive. In Texas, Republicans selected state Attorney General Ken Paxton over incumbent Sen. John Cornyn, a gamble that Cook suggests could either energize the GOP base or create avoidable risks in a race that otherwise might have been safer for Republicans.
The broader takeaway is that Republicans appear to be confronting powerful political headwinds, but the structure of today’s electoral map may prevent those winds from translating into the kind of congressional devastation that past presidents have suffered. Cook’s analysis suggests the 2026 midterms are shaping up as a test of whether a deeply negative national environment can overcome an increasingly fortified and narrowly contested political landscape. The result may still be a difficult night for Republicans, but perhaps not the overwhelming wave that current polling alone would imply.
| WEATHER |
— NWS outlook: Severe weather and flash flooding threats continue across portions of the Central and South-Central U.S. the next few days… …Intense heat persists across parts of the West, Southern Plains, and
Florida through Friday… …Elevated fire weather for portions of the Great Basin and Four Corners through tomorrow.
—Rainfall brings relief but sets up new weather risks across key crop regions
Northwestern corn belt benefits from moisture while southern areas brace for heavy rain and heat builds into early July
A fresh round of thunderstorms has provided timely moisture across portions of the northwestern Corn Belt, offering meaningful short-term relief to crops that had been facing increasing moisture stress. Southern Minnesota received localized rainfall totals exceeding one inch, while parts of western Iowa picked up more than a half inch. Those rains should help stabilize crop conditions in the near term, particularly as corn enters a critical growth phase and soybeans continue rapid vegetative development.
The broader weather story, however, remains uneven. Forecast models indicate only limited precipitation across much of the Corn Belt through Thursday before a stronger storm system emerges. That system is expected to bring significant rainfall from Thursday night through Friday night across portions of the southern Corn Belt, raising concerns about localized flooding and fieldwork delays. While additional moisture is generally welcomed in many areas, excessive rainfall could create ponding issues, slow crop development in poorly drained fields and interrupt fertilizer, spraying and other field operations.
Meanwhile, producers in the hard red winter wheat belt continue to face weather-related harvest challenges. Significant rainfall and severe thunderstorms are expected to persist for another two days across parts of Kansas, Oklahoma and neighboring areas, further delaying wheat cutting and increasing concerns about grain quality deterioration. Extended periods of wet weather during harvest often raise the risk of test-weight reductions, disease pressure and yield losses. The forecast does offer some relief, however, as a much drier pattern is expected to develop by Friday and continue through the weekend, allowing combines to return to fields.
Looking beyond the immediate forecast, weather models are signaling a notable pattern change heading into the first half of July. Forecasters expect a trough in the western U.S. and a ridge in the East to establish an active “ridge-rider” thunderstorm corridor that favors the northwestern Corn Belt. Under this setup, clusters of thunderstorms often develop along the northern edge of the heat ridge and track through the Dakotas, Minnesota, Iowa and surrounding areas. The first of these systems could arrive as early as Monday night, potentially delivering another round of beneficial rainfall to areas that have recently improved moisture profiles.
Temperature trends also warrant close attention. Through the remainder of this week, below-normal temperatures east of the Rockies should help preserve generally favorable crop conditions and limit stress on developing corn and soybeans. However, forecasters expect a significant summer heat dome to build between June 29 and July 3. Temperatures are projected to run 4 to 8 degrees above normal across much of the central and eastern United States, with highs reaching 95 to 105 degrees in the southern Plains, 88 to 94 degrees across much of the Corn Belt, and 90 to 95 degrees in the Mid-South and Southeast.
For agriculture, the timing of that heat event is important. Corn is not yet in widespread pollination across much of the Midwest, reducing the immediate threat of major yield damage. Nevertheless, extended periods of above-normal temperatures can increase evapotranspiration rates, accelerate crop water use and quickly diminish soil moisture reserves if rainfall does not keep pace. The combination of improving moisture conditions in the northwestern Corn Belt and the prospect of recurring ridge-rider storms suggests the market may remain focused on weather variability rather than broad-based production threats. Even after temperatures moderate slightly following the early July heat surge, forecasts indicate a generally warm pattern will persist through the remainder of the 15-day outlook period.
