Surveys: 2026 U.S. Corn & Soybean Crops Getting Confirmed as Big Ones

Diesel prices top Biden-era average, deepening Trump’s inflation problem

Link: Jones Act Waiver Extension Looks Likely as Fuel Costs Stay Elevated
Link: SNAP Standoff Puts Senate Farm Bill Markup on a Knife Edge
Link: Senate’s E15 Trade Puts Billions of RINs on Big Oil — and a
         Bigger-Than-Expected SRE Wave Is Reportedly Coming
Link: Rollins Offers Crop Insurance Reprieve, but Congress Owns
         the Deadline Problem
Link: Fiscal 2026 Ag Trade Deficit Cut by More Than Half with One Quarter
         to Go — Falling Imports, Not Booming Exports, Doing Heavy Lifting
 

Link: Video: Wiesemeyer’s Perspectives, Aug. 2
Video show is now on You Tube,Spotify & Apple
Link: Audio: Wiesemeyer’s Perspectives, Aug. 2

UP FRONT

■  TOP STORIES

— U.S./Iran war edges toward Hormuz deal, but risks remain: A proposed 60-day shipping arrangement could reopen the strait, but ceasefire, nuclear and security disputes remain unresolved.

— Diesel prices top Biden-era average, deepening Trump’s inflation problem: Tight distillate supplies and limited refining capacity could keep diesel elevated despite falling crude prices.

— Aramco warns oil inventories could take 18 months to rebuild: Reopening Hormuz would halt immediate losses, but depleted inventories would leave energy markets vulnerable through 2027.

— Farm Bill 2.0 markup nears without clear path out of committee: Sen. John Boozman (R-Ark.) still lacks a confirmed Democratic vote despite proposed SNAP and E15 changes.

— Cargill lockout continues after workers narrowly reject deal: The close vote suggests an agreement is within reach, but negotiations and another ratification vote remain unscheduled.

— EPA formalizes partial small-refinery waivers: EPA granted one full and two 50% exemptions while returning retired RINs rather than issuing new credits.

— U.S. agricultural trade deficit narrows as imports retreat: The June deficit declined primarily because imports fell, not because agricultural exports accelerated.

■  FINANCIAL MARKETS

— Equities today: Futures are mostly higher as investors weigh weak Chinese data, stronger eurozone growth and optimism over U.S./Iran negotiations.

— Equities yesterday: The Dow rose 1.71%, Nasdaq gained 2.59% and the S&P 500 advanced 1.79%.

— Lilly’s GLP-1 drugs drive blowout quarter: Surging Mounjaro and Zepbound sales lifted earnings and prompted Eli Lilly to raise its 2026 outlook.

■  AG MARKETS

— USDA daily sale: USDA reported 120,000 MT of corn sold to Mexico for delivery in 2026-27 and 2027-28.

— Wheat rebounds as corn and soybeans extend weather-led slide: Black Sea shipping risks supported wheat, while improved Corn Belt rainfall pressured corn and soybeans.

— Global grain prices drift lower as Black Sea trade grinds toward a standstill: Small price declines mask severe shipping, insurance and export disruptions across the region.

— Ag markets, Tue. Aug. 4: Weather reclaims control as grains slide and cattle rally: Improving crop forecasts pressured grains, while historically tight cattle supplies supported livestock futures.

■  FARM POLICY

— Rollins offers crop insurance relief, launches USDA data listening tour: USDA extended some premium deadlines, restored prevented-planting coverage options and began developing a data modernization plan.

■  WOTUS

— OMB’s final scheduled WOTUS meeting highlights agriculture’s absence: NRDC closes the current meeting schedule, though agriculture’s positions remain represented in formal comments.

■  ENERGY MARKETS & POLICY

— Brent rebounds as Red Sea attack tempers Hormuz optimism: A Houthi attack underscored continuing regional risks despite progress toward reopening the Strait of Hormuz.

— Ethanol blend rate hits record as war widens price advantage: May’s 11.29% blend rate strengthens the economic case for year-round E15 and additional corn demand.

— Montana Renewables anchors 30-million-gallon SAF supply at MSP: The supply corridor expands SAF availability, but actual volumes remain dependent on airline demand and incentives.

■  TRADE POLICY

— Canada revives metals quota plan as U.S. tariff deadline nears: Ottawa is seeking lower steel and aluminum duties, but broader U.S. tariffs remain unresolved.

— CBP tariff refunds reach $100 billion, but processing pace slows: Nearly $29 billion in accepted refund claims still awaits final clearance as more complex cases accumulate.

■  TRANSPORTATION & LOGISTICS

— Rotterdam shifts from lean logistics to crisis resilience: Europe’s largest port is adding inventories, redundancy and cybersecurity protections against war and trade disruptions.

■  POLITICS & ELECTIONS

— Michigan Senate cliffhanger caps split primary verdict: Abdul El-Sayed narrowly leads as Tuesday’s primaries produced victories for both progressive and establishment candidates.

■  WEATHER

— NWS outlook: Excessive-rain risks extend from the Central Plains to the Great Lakes and South Carolina coast, while western wildfire smoke reduces air quality.

— Corn Belt storm track holds as southern Plains heat risk deepens: Midwest rainfall remains broadly crop-friendly, but extreme heat threatens southern Plains crops, pastures and livestock.

■  TOP STORIES

—U.S./Iran war edges toward Hormuz deal, but risks remain

Talks advance on reopening the strait, while ceasefire and nuclear terms remain unsettled

The U.S./Iran war has entered a critical diplomatic window, but a comprehensive settlement remains distant. President Donald Trump said Wednesday that U.S. officials held “very good discussions” with Iran and predicted the Strait of Hormuz would reopen soon. Tehran continues to describe the negotiations as talks with Oman rather than direct engagement with Washington.

That ambiguity may help both sides sell an agreement domestically. Washington can argue that military and economic pressure forced concessions, while Tehran can portray the arrangement as a sovereign deal with Oman rather than capitulation to the U.S.

Proposed 60-day arrangement. Axios reported that the emerging proposal would establish a temporary shipping system lasting 60 days. Inbound vessels would use a northern lane through Iranian waters, while outbound ships would travel through Omani waters. Mines would be cleared from the central channel within 30 days as Iran and Oman negotiate a longer-term arrangement.

Disagreement remains over whether Iran could collect service fees or exercise authority over vessel traffic. Washington insists Hormuz remain an international waterway and opposes any Iranian tolls or control over which ships may pass. A vague interim deal could restart shipping without resolving that sovereignty dispute, but the ambiguity could later cause the arrangement to collapse.

Military pressure remains. Trump postponed threatened strikes to give negotiations more time but warned Iran would be hit hard if it abandoned the talks. The U.S. blockade of Iranian ports and Iran-linked shipping remains in place, while Iran continues restricting most commercial traffic through Hormuz.

Only eight vessels crossed the strait Tuesday, compared with roughly 130 to 140 on a normal prewar day. Maritime attacks also continue, including reported strikes on commercial vessels in Hormuz and the Red Sea and a Houthi missile attack against a Saudi tanker near Yanbu.

Those incidents show why a U.S./Iran agreement may not immediately restore normal traffic. Insurers and shipping companies will need evidence that Iran, the Houthis and other aligned forces are observing the arrangement.

U.S. weapons stocks add pressure. Reuters reported that the U.S. has depleted much of its supply of several long-range missiles and substantially reduced Patriot and THAAD interceptor inventories during the five-month conflict. The White House and Pentagon dispute suggestions that the military lacks the weapons needed for further operations.

Still, lower inventories would increase the cost and risk of another prolonged campaign, particularly as military planners seek to preserve weapons for possible conflicts involving China, Russia or North Korea.

A shipping truce is not peace. Trump now describes reopening Hormuz as the first phase and resolving Iran’s nuclear program as the second. Iran’s nuclear infrastructure, missile capabilities and broader regional activities remain unresolved.

The most likely outcome is therefore a temporary maritime truce rather than an end to the war. Even a workable agreement could be disrupted by a Houthi attack, a disputed vessel inspection, an alleged blockade violation or disagreement over Iranian authority.

Oil markets reflect that uncertainty. Prices fell sharply Tuesday on hopes for a deal but rebounded Wednesday after reports of the Houthi tanker attack, with Brent returning above $80 per barrel. Markets are pricing possible de-escalation — not durable peace or an immediate return to normal Gulf exports.

Bottom line: A Hormuz agreement would mark the most meaningful de-escalation in weeks. But the real tests will be whether shipping traffic increases, military operations pause and negotiations expand to Iran’s nuclear and missile programs. Until then, the conflict is entering a tactical pause rather than reaching a reliable conclusion.

—Diesel prices top Biden-era average, deepening Trump’s inflation problem

Crude’s retreat offers limited relief as distillate supplies stay tight

A Financial Times analysis of federal energy data finds that U.S. diesel prices have averaged $4.09 per gallon since President Donald Trump returned to office in January 2025 — narrowly exceeding the $4.08 average recorded during President Joe Biden’s four-year term. The one-cent crossover is largely symbolic, but it undercuts Trump’s promise to reduce energy costs and comes as diesel’s latest surge filters through agriculture, trucking, construction and consumer prices.

The more economically significant comparison is not the two presidential averages, but where diesel stands today. The Energy Information Administration said the national on-highway diesel average reached $5.348 per gallon on Aug. 3, up 3.5 cents from the previous week and $1.548 from a year earlier. Regular gasoline, by comparison, declined 1.7 cents during the week to $4.079.

That divergence helps explain why falling crude oil prices may not translate quickly into equivalent relief for diesel users.

Brent crude settled at $79.36 per barrel Tuesday and West Texas Intermediate at $75.77, both down more than 5%, after U.S. officials suggested an agreement to restore shipping through the Strait of Hormuz could be close. The benchmarks have now retreated sharply from the war-driven peaks above $120 reached earlier in the U.S./Iran conflict.

But crude oil is only one component of diesel’s retail price. Refining capacity, distillate inventories, transportation constraints and wholesale profit margins determine how quickly cheaper crude reaches the pump. Those indicators remain much tighter for diesel than the crude-price decline alone would suggest.

U.S. distillate inventories, which include diesel and heating oil, stood at about 110.6 million barrels in the latest weekly report. Although inventories increased by 1.1 million barrels, they remained roughly 10% below the five-year seasonal average. Refineries were already operating at 97.2% of capacity, leaving comparatively little room to increase production if another refinery outage, hurricane or logistical disruption occurs.

That is the central message in the Financial Times report: diesel has become the “problem fuel” because the world has more crude flexibility than refining flexibility. U.S. refiners are processing near maximum levels and earning unusually strong margins, with Marathon Petroleum reporting that second-quarter profits more than tripled from a year earlier. Meanwhile, Russian fuel-export restrictions and reduced Middle Eastern shipments have tightened the international market for refined products.

Agriculture faces a cost squeeze. The diesel increase is particularly important for agriculture because it arrives as producers prepare for fall harvest, fieldwork and grain transportation. Midwest diesel averaged $5.262 per gallon on Aug. 3, up 6.6 cents in one week and $1.47 from a year earlier. Gulf Coast diesel — generally the least expensive regional benchmark because of its proximity to major refineries — still averaged $5.141, up nearly $1.70 from last year.

The cost implications accumulate quickly. A farm using 10,000 gallons would spend approximately $15,480 more if the current $1.548-per-gallon year-over-year increase persisted across those purchases. A heavy truck traveling 100,000 miles annually and averaging 6.5 miles per gallon would face roughly $23,800 in additional fuel expense under the same comparison.

Those costs do not remain confined to farmers or trucking companies. They appear in grain basis levels, freight surcharges, fertilizer delivery costs, livestock transportation, food processing and eventually retail prices. Diesel is less visible to consumers than gasoline, but its inflationary footprint is arguably broader because nearly every manufactured or agricultural product travels at least part of its journey on diesel-powered equipment.

Why diesel could stay high after crude falls. There are several reasons retail diesel could decline more slowly than crude:

First, the recent crude selloff reflects expectations that Hormuz shipping will improve, not the full restoration of normal physical flows. Tankers, refineries and inventories must still be repositioned after months of disruption.

Second, refiners cannot immediately expand output when they are already running near full capacity. Producing additional diesel may also require reducing gasoline or jet-fuel yields, depending on refinery configurations and market economics.

Third, the seasonal demand mix is shifting. Gasoline demand normally weakens after the summer driving season, while distillate demand receives support from fall harvesting, freight movement and the rebuilding of heating-oil inventories.

Finally, diesel is traded globally. Tight supplies in Europe or Asia can sustain U.S. wholesale prices because American refiners can export products into higher-priced markets.

The political risk for Trump. The FT’s presidential comparison requires some caution. It compares the first 19 months of Trump’s second term with Biden’s full four years, and the $4.09-to-$4.08 difference is nominal rather than inflation-adjusted. A sustained decline later in Trump’s term could pull his average back below Biden’s.

Nevertheless, the political timing is difficult. The current EIA diesel price is roughly $1.27 per gallon — or 31% — above the Biden-era average cited by the FT. Trump can argue that the Iran conflict and disruptions to global shipping are responsible, just as the Russia/Ukraine war contributed to Biden-era energy inflation. Voters, however, typically hold the incumbent administration responsible for current economic conditions regardless of the original cause.

Gasoline remains the price displayed most visibly to consumers, and the FT calculates that gasoline has averaged $3.34 during Trump’s second term, below Biden’s $3.46 average. But diesel is increasingly transmitting the energy shock through freight, food and industrial costs, potentially making it more difficult for the administration to demonstrate that inflation is under control.

The White House could respond with additional emergency measures, including efforts to improve domestic fuel transportation or pressure refiners to limit prices. The FT also notes speculation about refined-product export restrictions. Such limits might temporarily increase domestic availability, but they could disrupt refinery economics, reduce incentives to maximize output and shift shortages to U.S. allies.

Bottom line: The decline in crude oil is encouraging, but it does not guarantee rapid diesel relief. Until distillate inventories rebuild, refinery utilization moves away from its practical ceiling and international product supplies normalize, diesel prices are likely to remain elevated — preserving a significant cost problem for agriculture and industrial America even if the headline oil market continues to retreat.

— Aramco warns oil inventories could take 18 months to rebuild

Reopening Hormuz would end the supply shock but not quickly restore the market’s cushion

Saudi Aramco Chief Executive Amin Nasser says reopening the Strait of Hormuz would stop immediate supply losses, but rebuilding depleted global inventories could take up to 18 months. At an average replenishment rate of 2.1 million barrels per day, roughly 1.15 billion barrels would return to storage.

Nasser estimates more than 2.6 billion barrels of potential supply have been lost since the U.S./Israeli war with Iran began Feb. 28. That broader figure includes reduced Persian Gulf production, delayed shipments and oil that was never produced because storage or transportation was unavailable.

The key market implication is that inventory rebuilding would create additional demand even after shipping normalizes. A 2.1-million-barrel-per-day restocking pace would nearly match the EIA’s projected increase in global oil consumption during 2027, potentially supporting crude prices longer than conventional forecasts suggest.

The EIA is more bearish, projecting inventories will begin rising late this year and build sharply in 2027 as production recovers faster than demand. It forecasts Brent averaging about $70 per barrel in the fourth quarter and $65 in 2027. Goldman Sachs, however, sees a tighter near-term market and expects Brent to remain broadly between $80 and $90 until a U.S./Iran agreement is confirmed or the conflict escalates.

Risks also extend beyond crude. Nasser warned that refineries are operating near maximum capacity, while Asian imports of refined fuels remain well below prewar levels. That means diesel, freight and aviation-fuel costs could remain volatile even if crude prices decline.

That distinction is important for agriculture and transportation. Even if crude prices decline as production returns, diesel, freight and other refined-product costs could remain volatile because refinery capacity and product inventories have less room for error. Another shipping interruption or unplanned refinery outage could produce a sharp fuel-price increase without requiring crude oil to return to its wartime highs.

Upshot: Aramco’s 18-month estimate is not necessarily a forecast of continuously high oil prices. It measures how much supply protection the market has lost. Reopening Hormuz would likely push crude lower, but depleted inventories, stretched refineries and vulnerable export routes would leave the energy system exposed to renewed disruption well into 2027.

—Farm Bill 2.0 markup nears without clear path out of committee

Boozman lacks a confirmed Democratic vote as the Sept. 30 deadline nears

Negotiations are continuing ahead of Thursday’s planned Senate Agriculture Committee markup of Farm Bill 2.0, but Chair John Boozman (R-Ark.) has yet to demonstrate that he has the votes to advance the package. Link to our special report on this topic released Tuesday. 

SNAP and E15 changes. Republicans added a provision delaying for one year the requirement that states with high Supplemental Nutrition Assistance Program payment error rates begin paying a share of benefit costs. The revised bill also would authorize year-round sales of E15 fuel. Neither change, however, has prompted a Democrat on the committee to publicly support the legislation.

With Sen. Mitch McConnell (R-Ky.) expected to be absent, Republicans would hold only 11 of the committee’s 23 votes. Boozman therefore needs at least one Democratic vote to approve the bill by a 12-11 margin.

Democrats are seeking at least a two-year delay of the SNAP cost-sharing requirement enacted through the One Big Beautiful Bill Act. Some Republicans have indicated that the one-year postponement, which has White House backing, is their final offer.

Getting the bill through committee would be only the first hurdle. The legislation would need 60 votes in the full Senate, requiring substantially broader Democratic support. Any Senate-passed measure also would have to be reconciled with the House bill, adding another potentially lengthy step.

Bottom line: Those political and procedural obstacles are becoming more pressing as the Sept. 30 expiration of several farm bill authorities approaches. Unless negotiators reach a broader compromise quickly, Congress could again face pressure to extend the current farm bill rather than complete a new one.

—Cargill lockout continues after workers narrowly reject deal

Close vote signals progress, but no new ratification date is set

The lockout at Cargill’s Fort Morgan, Colo., beef plant will continue after Teamsters Local 455 members narrowly rejected a union-recommended contract settlement Monday, Aug. 3. The outcome was substantially closer than the vote that triggered the lockout in May, suggesting the two sides have moved within striking distance of an agreement — but not close enough to restart production.

Union business agent Chris Suazo characterized Monday’s vote as “very close” and said union officials believe the parties are “just about there.” However, neither the union nor Cargill has publicly released the vote totals or the margin of defeat. (Reportedly, an estimated 1,500 of the more than 1,700 Fort Morgan employees were present for the vote on Aug. 3. Ratification of the contract reportedly fell short of 25 votes.)

That is a major change from the previous ballot. In May, workers rejected Cargill’s offer by a vote of 1,388 to 252 — roughly 85% opposed — before Cargill locked out more than 1,700 employees May 20.

The latest proposal retained a five-year contract and provided $2.15 per hour in total wage increases, but frontloaded more of the raise into the earlier years. It also reportedly offered a $1,500 bonus divided into two payments, compared with a $1,250 bonus in Cargill’s earlier proposal. Some workers remained dissatisfied because the overall wage package had not materially increased and raises in the final years remained smaller.

No next vote has been scheduled. Suazo said the union must consult members, identify what additional changes could produce a majority and then return to negotiations. As of Wednesday morning, Aug. 5, there was no timetable for talks to resume and no date for another ratification ballot. A new vote would occur only after Cargill and the union reach another tentative settlement.

Cargill said it was disappointed workers rejected the union-recommended agreement but remained willing to consider proposals that fit within the economic framework previously discussed. That language suggests the company may accept changes in the timing or structure of compensation but is not yet signaling willingness to substantially enlarge the total package.

Perspective: The narrow vote is the clearest indication yet that the lockout could be resolved without a wholesale renegotiation. The remaining gap may center less on the total headline wage increase than on first-year pay, bonus timing, health benefits and worker protections. However, rejecting a settlement recommended by union negotiators also shows that rank-and-file expectations remain above what bargaining leaders believed was achievable.

Pressure is building on both sides. Workers have been locked out for more than 70 days, while the plant has not processed cattle since April 23. Cargill has redirected cattle to plants in Kansas, Nebraska and Texas, limiting the national supply-chain impact, but the prolonged closure continues to weigh heavily on Fort Morgan’s workers, businesses and municipal finances.

The most likely path to another vote is a targeted revision rather than an entirely new contract — potentially more money upfront, a larger or faster bonus payment, or improvements to health and workplace provisions. The close result means relatively modest concessions could be enough, but until bargaining resumes, there is no firm timetable for ending the lockout.

—EPA formalizes partial small-refinery waivers

Agency grants one full and two partial exemptions while limiting RIN disruption

EPA has formally established partial small-refinery exemptions as a middle ground between granting or denying complete relief from Renewable Fuel Standard obligations. In an Aug. 5 Federal Register notice, the agency said it acted on six petitions submitted by four refineries for the 2023 and 2024 compliance years. EPA granted one full exemption and two 50% exemptions, found three petitions ineligible and denied none. The notice does not identify the refineries or quantify the number of gallons or renewable identification numbers (RINs) involved, limiting its usefulness in measuring the immediate market impact. Link for details. 

The broader significance is EPA’s interpretation that the Clean Air Act gives it authority to determine that a refinery is experiencing partial “disproportionate economic hardship.” That interpretation creates a more flexible waiver process and could make 50% exemptions a recurring option in future cases rather than forcing EPA into an all-or-nothing decision.

EPA also made the Department of Energy’s refinery-assessment matrix the central factor in future decisions. The agency said DOE’s findings will effectively carry a rebuttable presumption of correctness unless refinery-specific information or other economic factors justify a different outcome. In these six cases, EPA said its review of individual refinery circumstances did not change any of the results produced by the DOE matrix. That framework could make waiver decisions more predictable, but it also raises the stakes surrounding how DOE calculates hardship.

The implementation method is particularly important for biofuel and RIN markets. When a refinery has already complied by retiring RINs, EPA said it will return the original retired credits in proportion to the exemption rather than create or award new current-vintage RINs. EPA argued that issuing new credits could produce a sudden increase in RIN supply, depress prices and weaken incentives for renewable-fuel investment. Returning existing RINs will still provide compliance relief, but the market effect should be less disruptive than injecting newly created credits.

EPA also declared that the legal interpretations underlying the refinery-specific decisions have nationwide scope or effect. Any challenges must therefore be filed in the U.S. Court of Appeals for the District of Columbia Circuit by Oct. 5. That appears designed to consolidate litigation in one court and reduce the risk of conflicting regional rulings over EPA’s new partial-waiver and RIN-return policies.

—U.S. agricultural trade deficit narrows as imports retreat

June improvement reflects weaker buying abroad, not an export surge

The U.S. agricultural trade deficit narrowed in June as imports declined more sharply than exports, underscoring that weaker inbound trade — rather than stronger overseas sales — remains the primary driver of the improvement. Link to our special report released Tuesday. 

U.S. agricultural exports totaled $14.94 billion in June, down from $15.18 billion in May. Imports fell to $17.42 billion from $18.02 billion, reducing the monthly trade deficit to $2.48 billion from $2.84 billion.

Through the first nine months of fiscal 2026, agricultural exports reached $137.34 billion, while imports totaled $152.67 billion, producing a cumulative deficit of $15.33 billion. The deficit is more than $16 billion smaller than during the same period of fiscal 2025.

Exports are running $1.16 billion above the year-earlier pace, but the much larger shift has occurred on the import side, where purchases have fallen by $16.74 billion. That suggests the sharp improvement in the trade balance is being driven primarily by reduced U.S. demand for foreign agricultural products rather than a broad export boom.

USDA currently forecasts fiscal 2026 agricultural exports of $176.5 billion and imports of $205.5 billion, resulting in a $29 billion deficit. To reach those projections, exports would need to average about $13.05 billion per month during the final three months of the fiscal year, while imports would need to average $17.61 billion.

For comparison, exports averaged $13.36 billion per month during the final three months of fiscal 2025, while imports averaged $16.59 billion. That means USDA’s export target appears attainable, but its import forecast would require purchases to rebound above last year’s late-season pace.

Administration officials have pointed to the improving fiscal 2026 figures as evidence that recent trade agreements are benefiting U.S. agriculture. The data, however, show that lower imports account for most of the narrowing deficit.

One ag industry analyst emailed: “Some might even call this a ‘lose-lose’ scenario.  Negligible impact on producers with small change in ag exports (largely because prices for bulk commodities remain low) yet imports down which hurts ag processors and food manufacturers who depend on imported agricultural products and inputs, and ultimately consumers who pay higher food prices.  But, hey, the ag trade deficit is cut in half.”

The June trade report and the Aug. 12 World Agricultural Supply and Demand Estimates will be the final major inputs before USDA releases its next U.S. Agricultural Trade Outlook on Aug. 27. The fiscal 2026 deficit is clearly on track to fall well below the record $43.7 billion posted in fiscal 2025, but the improvement so far reflects import contraction far more than accelerating exports.
 

■  FINANCIAL MARKETS

—Equities today: U.S. equity futures are mostly higher as investors weigh disappointing guidance from AMD and SPCX against mixed global economic data. Continued optimism over a possible U.S.-Iran ceasefire is limiting oil prices, supporting bonds and improving broader market sentiment.

Overnight economic data offered conflicting signals. China’s services PMI fell sharply to 50.4 in July from 54.1, well below expectations of 53.9. In contrast, the eurozone composite PMI rose two points to 52.0, slightly above the 51.9 forecast, easing concerns about regional growth.

Attention now turns to U.S. economic data, with the July ADP employment report expected to show a gain of 75,000 jobs and the ISM services index forecast at 54.5. Both reports are due by midmorning.

A four-month Treasury bill auction at 11:30 a.m. ET could also provide insight into bond-market expectations for Federal Reserve policy and influence equities during afternoon trading.

Federal Reserve Governors Lisa Cook and San Francisco Fed President Mary Daly are also scheduled to speak, though both appearances will come after the market closes. Cook speaks at 4:05 p.m. ET, followed by Daly at 8:35 p.m. ET.

In Asia, Japan +3.7%. Hong Kong +0.2%. China +1.5%. India +0.2%.
 

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

—Equities yesterday: 

—Lilly’s GLP-1 drugs drive blowout quarter

Mounjaro and Zepbound fuel profit surge and higher 2026 guidance

Eli Lilly easily topped second-quarter expectations as strong demand for its diabetes and obesity drugs continued to drive rapid growth. Revenue rose 48% to nearly $23 billion, while net income increased 25% to $7.1 billion. Shares gained about 6.5% in premarket trading.

Mounjaro sales jumped 91% to $9.94 billion, while Zepbound revenue climbed 46% to $4.93 billion. Together, the tirzepatide products accounted for nearly two-thirds of Lilly’s quarterly sales.

Lilly raised its 2026 revenue forecast to between $85 billion and $87 billion, signaling that prescription growth and international expansion should outweigh pricing pressure and increased competition.

The results strengthen Lilly’s position in the GLP-1 market and suggest demand remains constrained more by manufacturing capacity and insurance access than by consumer interest. The main risk is Lilly’s increasing reliance on Mounjaro and Zepbound, leaving the company more exposed to pricing, reimbursement or safety setbacks involving tirzepatide.

■  AG MARKETS

—USDA daily sales: 120,000 MT corn to Mexico — 30,000 MT 2026/27 and 90,000 MT 2027/28. 

—Wheat rebounds as corn and soybeans extend weather-led slide

Black Sea risks lift wheat while Midwest rain weighs on row crops

Grain futures were mixed early Wednesday, with wheat recovering from Tuesday’s sharp decline while corn and soybeans remained under pressure from improving Midwest weather. December corn fell 3 3/4 cents to $4.61 3/4, November soybeans dropped 7 3/4 cents to $11.70, September soybean meal declined $3 to $309.70 and September soybean oil eased 23 points to 67.97 cents. December SRW wheat rose 6 3/4 cents to $6.64, while December HRW gained 7 1/4 cents to $7.31 3/4.

Corn remains caught between declining crop ratings and a more favorable August forecast. USDA’s good-to-excellent rating slipped another two percentage points to 61%, with notable deterioration in Nebraska, the Dakotas and Kansas. However, ratings improved in Iowa, Illinois and Indiana, while forecasts call for widespread rainfall across much of the central and eastern Corn Belt. Some areas of Illinois, Missouri and eastern Iowa could receive 0.75 inch to 2 inches through the weekend, easing concerns as the crop moves through grain filling.

The market is also confronting large production expectations. StoneX estimated the U.S. corn yield at 184.8 bushels per acre and production near 16.2 billion bushels. Although below USDA’s current trend-line yield, that would still represent a large crop and reinforces the market’s need for either a renewed weather threat or stronger demand to sustain a rally. December futures are also testing important chart support after closing below their 200-day moving average Tuesday.

Soybeans are facing even greater weather pressure because August rainfall is arriving during pod setting and pod filling. USDA held the crop’s good-to-excellent rating steady at 63%, with conditions improving in Iowa, Illinois, Indiana, Missouri and Ohio. StoneX’s initial estimate placed the soybean yield at 53 bushels per acre, matching USDA’s trend-line projection. Those numbers suggest the crop remains capable of producing near average or better yields despite regional dryness in the western Corn Belt.
 

Details and analysis: StoneX’s August survey — estimates dated Aug. 4, reported by industry sources — pegs U.S. corn production at 16.16 billion bushels on a national average yield of 184.8 bushels per acre, with soybean production at 4.47 billion bushels on a 53.0-bushel yield. The message in the numbers: the corn crop is running ahead of USDA’s trend-based forecast, the soybean crop is already a record — and the market debate is shifting from crop size to demand. StoneX frames the survey as an estimate of USDA’s final production number, and it assumes USDA’s harvested acres and normal frost dates. A hot, dry finish across an already-stressed western belt, an early frost in the north, or an acreage revision could still move these totals meaningfully in either direction. Last August StoneX had the crop at 188.1 and it finished at 186.5. Following that pattern, corn could very well still come in lower than StoneX’s estimates.
 

The private-estimate parade is just starting. Another closely followed set of crop estimates, from S&P Global Energy, is reportedly set for release today — the next benchmark for how commercial analysts see the crop. The main event follows on Aug. 12, when USDA issues its August Crop Production report and WASDE — the first official estimates of the season built on survey data rather than trend assumptions. August NASS yield numbers have moved these markets hard in recent years, and with private surveys clustering above trend on corn, the bar for a bullish surprise is getting higher.

The 2026 corn and soybean crops keep getting confirmed as big ones.

Demand continues to provide some underlying soybean support. USDA confirmed another 132,000 metric tons of new-crop soybeans sold to China Tuesday, but the sale was unable to offset pressure from wetter weather, weaker soybean products and Tuesday’s steep crude-oil decline. The continued erosion in soybean meal also indicates that traders are not yet pricing in a shortage of domestic crush supplies.

Wheat’s overnight advance appears primarily corrective, but Black Sea risks are providing a fundamental reason for buyers to return. Wheat futures had fallen sharply Tuesday and were technically oversold after retreating from late-July highs. Meanwhile, Russian attacks have effectively halted vessel traffic into Ukraine’s Odesa-area ports, forcing Ukraine to rely on rail, road and Danube routes that may eventually handle only 50% to 55% of normal Black Sea capacity. More than 30 million metric tons of Ukrainian grain and oilseeds could be stranded without a resolution.

The overnight split therefore reflects two very different supply stories. Corn and soybeans remain focused on potentially improving U.S. yield prospects, while wheat is carrying a geopolitical risk premium tied to Black Sea shipping. Wheat’s rebound could extend if export disruptions worsen, but corn and soybeans will likely require either a drier forecast or unexpectedly strong demand to reverse their current downward momentum.

—Global grain prices drift lower as Black Sea trade grinds toward a standstill

Modest declines in Paris and Kuala Lumpur mask a market on edge: Russian wheat offers are scarce, the bid/offer spread has blown out to $6 a ton, and a widening share of Black Sea export capacity is simply offline.

International grain markets eased Wednesday, but the small red numbers on the screens understate the drama behind them.

On Euronext, September milling wheat settled €2.00 lower at €218.50 per metric ton — $251.95/MT at the current exchange rate of $1.1531 per euro, or $6.86 a bushel in U.S. terms. November Paris corn slipped €1.50 to €244.75 ($282.20/MT, or $7.17 a bushel).

Set those against Chicago and the war’s fingerprints are unmistakable. CBOT September SRW wheat closed Tuesday at $6.38½ ($234.60/MT), leaving Paris wheat at roughly a $17/MT premium to U.S. soft wheat. The corn comparison is starker still: September corn in Chicago at $4.42¼ works out to $174.10/MT, putting European corn at a premium of more than $100 a ton — a running measure of how thoroughly the war has severed Europe and the Mediterranean from their traditional Black Sea feed-grain pipeline. Part of the gap is currency: a euro near $1.15 inflates dollar equivalents and taxes EU export competitiveness at the same time.

A market with no middle. The most telling quote of the day is the one that barely exists. Russian FOB wheat offers are difficult to find, with 12.5%-protein new crop quoted at $225 bid, $231 offered ($6.12 to $6.29 a bushel). In a functioning market that spread runs a dollar or two; at $6 it is less a price than a shrug. Wide spreads mean no one is transacting — sellers cannot guarantee loadings, buyers cannot price freight and war-risk insurance, and both sides are guessing.

The logistics explain the paralysis. Roughly a quarter of Russian grain exports normally clear through the Sea of Azov, which attacks have effectively taken offline, while Ukraine’s Black Sea export capacity is estimated down by a third. Scores of merchant vessels calling at Russian and Ukrainian ports have been attacked in recent weeks, war-risk insurance and freight rates have surged, and Turkish shipowners have been advised against the voyage altogether. USDA still carries Russian exports at 47 million metric tons for 2026-27 from an 88.5-MMT crop — a program that is increasingly hostage to logistics rather than agronomy. The world’s cheapest wheat is only nominally cheap if vessels will not call for it, which is precisely why the Paris premium persists: importers who cannot count on Black Sea execution are paying up for EU, U.S. and Australian origin instead.

Palm oil: the vegoil anchor. In Kuala Lumpur, October palm oil closed 6 ringgits lower at 4,702 RM/MT — $1,147.75/MT, or about 52.1 cents a pound with the ringgit at $0.2441. Chicago September soybean oil, at 68.20 cents Tuesday (roughly $1,504/MT), leaves palm at a discount near 16 cents a pound — wide enough to keep price-sensitive Asian buyers anchored in palm and to cap the upside in the broader vegoil complex, even with Ukrainian sunflower oil flows disrupted by strikes on Odesa-area terminals.

Bottom line: Wednesday’s declines read as consolidation, not a turn. A war premium built on broken logistics does not come out of the market because Paris slips €2.00; it comes out when vessels load reliably in the Azov and insurance rates retreat, and there is no sign of either. Watch three things from here: whether Russia can reroute Azov volumes through already-strained deepwater ports, the pace and pricing of the next round of North African and Middle Eastern tenders, and next week’s USDA August supply-demand report, which brings the first survey-based U.S. corn and soybean yields into a market that suddenly cares a great deal about every exportable bushel outside the Black Sea.

—Ag markets, Tue. Aug. 4: Weather reclaims control as grains slide and cattle rally

Falling energy prices add pressure, while tight cattle supplies support livestock

U.S. agricultural markets split sharply on Aug. 4, with improving crop-weather expectations and broad technical selling pushing corn, soybeans and wheat lower, while tight animal supplies powered another strong advance in cattle futures. Cotton recorded only a minor correction, and lean hogs recovered modestly through short covering.

The session’s central message was that the grain complex remains firmly controlled by weather and speculative positioning. Supportive developments — including deteriorating corn ratings and additional soybean sales to China — were unable to overcome forecasts for timely Corn Belt rainfall, less-threatening temperatures and weakness in crude oil. Livestock, particularly cattle, continued to trade a much different set of fundamentals centered on limited supplies rather than production potential.

• Corn gives back Monday’s recovery. December corn fell 7 cents to $4.65 1/2, near the daily low, surrendering most of Monday’s gains. The reversal was notable because USDA’s weekly crop report was not especially bearish: only 61% of the crop was rated good to excellent as of Aug. 2, down two percentage points from the previous week and well below 73% a year earlier. Poor-to-very-poor ratings increased to 14%.

The market instead concentrated on forecasts for additional rainfall and relatively moderate temperatures. Missouri, Iowa and Illinois were expected to receive some of the better totals, potentially exceeding 1 inch in places from Wednesday through Saturday. That was enough to encourage traders to remove weather premium even though rainfall coverage was expected to be lighter across other parts of the Corn Belt.

Corn’s problem is that much of the crop has moved beyond its most weather-sensitive pollination period. USDA said 90% was silking, 43% had reached the dough stage and 6% was dented. As crop development advances, forecasts must become increasingly threatening to generate the same bullish market response.

That does not mean yield risk has disappeared. Conditions vary widely by state, with particularly poor ratings in parts of the Plains and western production belt. But the market is signaling that declining national ratings alone will not sustain a rally. Traders want evidence that yield losses are broad enough to reduce production materially before USDA issues its first survey-based yield estimates on Aug. 12.

• China buying fails to rescue soybeans. November soybeans dropped 14 1/2 cents to $11.77 3/4, near the session low and the lowest level in four weeks. September soybean meal declined $2.70 to $312.70, while September soybean oil lost 59 points to 68.20 cents.

The “Turnaround Tuesday” decline was particularly disappointing for soybean bulls because USDA reported another sale of 132,000 metric tons to China for 2026-27 delivery. That followed Monday’s confirmation of nearly 500,000 metric tons and trade reports that Chinese state companies had purchased as much as 1 million metric tons after prices fell sharply the previous week.

The price action indicates that traders view the recent Chinese buying as necessary demand rather than an unexpected expansion of demand. State buyers appear to be taking advantage of lower prices and fulfilling political purchase commitments, but the market is still waiting to see whether private Chinese crushers become active and whether U.S. soybeans remain competitive against Brazilian supplies.

Weather carried more weight because soybeans are entering their critical reproductive period. USDA said 62% of the crop was setting pods, compared with the five-year average of 55%. The crop was rated 63% good to excellent, unchanged from the previous week but below 69% a year earlier.

That combination leaves soybeans highly sensitive to August rainfall. Timely showers during pod setting and filling can preserve or improve yield potential, making even modest increases in forecast moisture bearish. Conversely, a return to widespread heat and dryness could quickly rebuild weather premium.

Falling energy prices added pressure, particularly in soybean oil. Brent crude dropped more than 5% during the session amid renewed expectations that shipping through the Strait of Hormuz could normalize. Weak crude reduces some of the macroeconomic support flowing into biofuel feedstocks and can trigger liquidation across soybean oil and the broader oilseed complex.

Domestic processing remains an underlying cushion. The June soybean crush totaled 217.8 million bushels, up 10.6% from a year earlier, while soybean oil stocks declined from May. But the crush was slightly below market expectations, preventing the report from becoming an immediate bullish catalyst.

• Wheat downtrends deepen. September Chicago soft red winter wheat fell 12 1/2 cents to $6.38 1/2. September Kansas City hard red winter wheat lost 10 1/4 cents to $7.07, and September spring wheat declined 10 1/2 cents to $6.84 1/2.

Wheat was caught in the broader technical selloff, with daily charts showing developing downtrends across the winter wheat contracts. The winter wheat harvest was 86% complete, matching the five-year average but trailing pre-report trade expectations.

The market’s inability to rally despite continued Black Sea shipping risks highlights the weight of export competition and speculative selling. Geopolitical disruptions can produce sharp, temporary rallies, but wheat needs confirmed export demand or more significant supply losses to reverse the technical deterioration.

U.S. production prospects are comparatively tight, particularly for hard red winter and spring wheat, but global availability continues to limit the market’s response. Spring wheat conditions actually improved during the latest week, with 55% rated good to excellent, up from 53% previously.

• Cotton pullback appears corrective. December cotton slipped 11 points to 82.46 cents after posting a nine-week-high close on Monday. The contract finished near its daily high, suggesting the decline was primarily profit-taking rather than a decisive reversal.

Cotton’s ability to hold most of its recent advance despite broad commodity weakness is modestly constructive. Still, the market must contend with uncertain textile demand, fluctuating energy prices and uneven production conditions across the southern Plains. Additional consolidation would not damage the recent improvement unless prices begin closing substantially below the breakout area.

• Cattle rally remains supply driven. October live cattle rose $1.175 to $227.90, while September feeder cattle jumped $3.60 to $346.15, closing at a two-week high.

The magnitude of the feeder cattle gain showed that the rally was about more than lower corn prices. Cash feeder markets were also firm, with Oklahoma City auction prices reportedly $5 to $10 higher for steers and $5 to $15 higher for heifers.

USDA’s July inventory offered little evidence that meaningful supply relief is near. The total cattle inventory increased slightly to 94.2 million head, but beef cow numbers fell 1%, and the 2026 calf crop was estimated at 32.5 million head, down 2%. Those smaller calf numbers will restrict feeder cattle and fed cattle supplies well into 2027.

Tyson Foods’ warning that elevated cattle costs are widening losses in its beef division reinforces that assessment. Tyson said reopening the border to Mexican cattle would not immediately close the supply gap because imported animals require additional time on pasture or in feedlots before slaughter.

That creates a bullish futures foundation but also a potential demand risk. Cattle prices can remain historically strong while packer margins deteriorate, slaughter slows and high retail beef prices test consumers. The supply story remains supportive, but gains are likely to become increasingly volatile at elevated price levels.

• Hogs need more fundamental confirmation. October lean hogs rose 67 1/2 cents to $84.35, nearer the session high, as traders covered short positions following recent weakness.

The recovery did not yet represent a clear fundamental turn. USDA’s Tuesday afternoon pork cutout declined $1.08 to $99.83, with all major primal values lower, while weekly slaughter was running above the previous week’s pace.

Hog futures therefore need stronger wholesale pork values or firmer cash hog prices before the rebound can develop into a sustained rally. Without that confirmation, rallies may continue to attract selling.

Outlook: The Aug. 4 session reinforced the sharp divergence between crop and livestock markets. Grain traders are discounting improving weather before final yields are known, leaving corn and soybeans vulnerable to further liquidation but also susceptible to sudden rebounds if forecasts turn hotter or drier. Wheat must overcome both technical weakness and global export competition.

Cattle remain supported by a biological supply constraint that cannot be corrected quickly. Hogs, by contrast, are attempting to stabilize without the same degree of supply tightness or wholesale-price support.

For grains, the next major test will be whether favorable weather survives through the first half of August and whether USDA validates current production expectations in its Aug. 12 reports. Until then, weather forecasts — rather than crop ratings or isolated export sales — are likely to remain the market’s primary price-setting force.

■  FARM POLICY

—Rollins offers crop insurance relief, launches USDA data listening tour

Farmfest package eases cash flow but leaves deeper farm-income strains intact

USDA Secretary Brooke Rollins made the comments Tuesday at Farmfest in Minnesota, announcing a three-part USDA package combining a nationwide agricultural-data listening tour, up to 60 additional days for producers to pay certain crop insurance bills and restoration of an optional 5% prevented-planting coverage buy-up. The steps provide targeted relief and respond to recurring producer complaints, but they are not a substitute for stronger commodity prices or broader assistance with elevated production costs.

• The premium-payment extension offers the most immediate help. USDA’s Risk Management Agency is authorizing approved insurance providers to give producers up to 60 additional days to pay premiums, administrative fees and amounts due under written payment agreements when the scheduled billing date falls between July 1 and Sept. 30, 2026. Insurers may waive interest during the extension, although unpaid amounts must be resolved before the policy termination date when that date comes first. Link to our special report on this development. Link to details from RMA.

Cash-flow relief, not debt forgiveness. The extension does not reduce a producer’s premium or change the underlying insurance contract. It simply moves the cash obligation later, potentially giving farmers time to receive harvest proceeds, operating-loan advances or government payments before settling the bill.

The value therefore depends heavily on the size of the premium and the farm’s financing position. At an illustrative 8% annual borrowing cost, delaying a $100,000 premium for 60 days saves roughly $1,300 in short-term financing expense. The bigger benefit may be avoiding a forced commodity sale, an operating-line squeeze or a delinquency at a point when cash flow is typically tight.

USDA also will defer its collection of unpaid producer premiums and administrative fees from approved insurance providers and waive associated interest beginning with the August accounting cycle. That provision is important because the payment delay otherwise would shift the financing burden almost entirely onto crop insurance companies.

Even with USDA’s accommodation, the extension creates additional work. Insurance companies must track revised due dates, unpaid balances and termination deadlines, while agents will have to explain the relief, contact affected policyholders and help avoid misunderstandings over whether interest has been waived. The financial exposure rests principally with the approved insurance providers; agents bear more of the servicing and communication burden.

The awkward premium calendar has roots in the 2008 Farm Bill. Congress moved the standard premium billing date to Aug. 15 while delaying certain payments to crop insurance companies, allowing budget savings to be recorded during the farm bill’s scoring window. The change was primarily a budget exercise rather than an attempt to align premium payments with farmers’ marketing or cash-flow cycles.

That history helps explain why USDA periodically must provide administrative flexibility when farm finances deteriorate. USDA can offer temporary relief, but permanently changing the timing would be more appropriately handled by Congress rather than through repeated annual accommodations.

• Prevented-planting buy-up restored. Rollins also announced that RMA will reinstate the option for producers to purchase an additional 5% of prevented-planting coverage. The restoration begins with crops associated with the Aug. 31, 2026, filing date for the 2027 crop year and will continue in succeeding years. Link for details.

The additional coverage is not retroactive for 2026 spring-planted crops. It also is not free: Producers must elect the buy-up and pay an additional premium. But it can materially increase indemnities when excessive moisture, drought or another insured cause prevents planting before the final planting date.

USDA had eliminated the buy-up for many 2026 crops, arguing that the option was concentrated geographically and that much of the indemnity benefit flowed to producers in the Dakotas and other northern states. A bipartisan group of senators subsequently urged USDA to reverse course.

The restoration is particularly relevant to the Northern Plains and Upper Midwest, where narrow planting windows and prolonged spring moisture can leave producers with large fixed costs but no planted crop. It restores a familiar tool rather than creating a fundamentally new insurance program, but it gives farmers more control over how much risk they retain.

•Data modernization could have the largest long-term effect. The most consequential portion of Rollins’ announcement may be the least immediate: USDA will conduct listening sessions as it develops a department-wide Data Modernization Plan scheduled for release later this year. The Research, Education and Economics mission area, led by Undersecretary Scott Hutchins, will coordinate the effort.

Sessions are planned at the Indiana, Wisconsin, Illinois, Missouri, Iowa and Nebraska state fairs, Penn State Ag Progress Days, Dakotafest and the Farm Progress Show. The meetings follow an earlier request for information that sought comments on USDA data collection, statistical analysis, reporting methods and transparency.

The immediate problem is declining producer participation. Rollins said response rates for some crop-production surveys were about 85% in 1992, fell to 55% by 2016 and have since dropped into a range of roughly 38% to 45%. Lower participation forces USDA to rely more heavily on modeling, administrative information and other data sources, potentially increasing revisions and producer skepticism even when USDA’s statistical methods remain sound.

Listening sessions alone will not reverse that trend. Farmers are more likely to respond when surveys are shorter, information does not have to be submitted repeatedly to different USDA agencies, confidentiality protections are clear and producers understand how their answers affect published estimates.

USDA’s related “One Farmer, One File” project seeks to unify information held by the Farm Service Agency, Natural Resources Conservation Service and RMA. USDA expects that initiative to reduce repetitive reporting and retire separate legacy systems, with completion currently anticipated in 2028.

Combining records could improve efficiency and allow USDA to use administrative data in place of some survey questions. But it also raises legitimate questions about access controls, cybersecurity and whether data supplied for one program could later be used for another purpose. Rollins acknowledged those concerns at Farmfest and said USDA would strengthen safeguards surrounding producer information.

•Reorganization creates a complication. USDA is pursuing the data overhaul while relocating some National Agricultural Statistics Service positions to St. Louis and other NASS locations. That creates a potential conflict between the goal of improving statistical products and the risk of losing experienced personnel during the transition. USDA says NASS will retain a field presence, but the effectiveness of the modernization effort will depend heavily on workforce continuity.

The Government Accountability Office found that the 2019 relocation of the Economic Research Service and National Institute of Food and Agriculture temporarily reduced staffing and productivity. ERS issued fewer key reports, and NIFA took longer to process grants before the agencies largely recovered by the end of fiscal 2021. That history does not establish that NASS will suffer the same outcome, but it makes retention, training and transition planning critical benchmarks for Rollins’ initiative.

Bottom line: Rollins’ Farmfest package is practical but limited. The 60-day premium extension can ease a real cash-flow bottleneck, although it delays rather than eliminates costs. Restoring the prevented-planting buy-up corrects a controversial reduction in producer choice. The data initiative could have the greatest lasting impact, but only if USDA converts producer feedback into measurable improvements in survey burden, transparency, privacy and statistical reliability — while avoiding a loss of expertise during the NASS reorganization.

■  WOTUS

—OMB’s final scheduled WOTUS meeting highlights agriculture’s absence

NRDC closes current lineup as White House review nears a decision

The White House Office of Information and Regulatory Affairs (OIRA) is scheduled to hold what is currently the eighth and final stakeholder meeting Wednesday on EPA’s updated definition of “waters of the United States” (WOTUS). The 1 p.m. session was requested by the Natural Resources Defense Council (NRDC), giving environmental advocates the last scheduled opportunity to make their case before OMB completes its review. OIRA has had the rule since June 30, while EPA’s Unified Agenda places the action in the final-rule stage with no statutory deadline.

The current round of meetings began July 23 and has included the American Road and Transportation Builders Association, Edison Electric Institute, Competitive Enterprise Institute, Zenolabs AI, an individual requester, the American Petroleum Institute and the American Chemistry Council. No major national agriculture organization — including the American Farm Bureau Federation — appears on the schedule.

That absence is notable because agriculture has been at the center of the WOTUS fight for more than a decade. The definition determines the geographic reach of several Clean Water Act programs, including Section 402 discharge permits and Section 404 permits for dredging or placing fill material. For farmers and landowners, the practical questions involve whether wetlands, seasonal streams, drainage features and ditches are federally regulated and whether permits are required before undertaking certain land improvements.

However, the lack of an OIRA meeting should not be interpreted as agriculture being excluded from the process. Farm Bureau submitted detailed comments by the Jan. 5 deadline, urging EPA to narrow the definition of “relatively permanent,” provide greater clarity on wetlands and preserve exclusions for prior converted cropland and ditches. OIRA also emphasizes that its meetings are not substitutes for formal comments, which become part of the agency’s rulemaking record.

One possible explanation is that farm groups regarded the November 2025 proposal as broadly moving in their preferred direction and concentrated on the formal comment process rather than requesting a late-stage White House meeting. EPA proposed limiting federal jurisdiction compared with the amended 2023 rule, defining “relatively permanent,” “continuous surface connection” and “tributary,” while revising exclusions for ditches and prior converted cropland and adding an explicit groundwater exclusion.

Still, the details will matter. Agriculture groups have sought assurance that references to a regional “wet season” will not pull intermittent drainage features back under federal jurisdiction and that prior converted cropland will not lose its excluded status because of temporary changes in use. The final wording governing ditches, wetlands and seasonal flows will determine whether the rule delivers the certainty promised by EPA or becomes the starting point for another round of litigation.

NRDC’s meeting ensures that the environmental argument will be presented at the end of the current lineup. The organization is expected to press OMB against narrowing federal protection beyond what the Supreme Court required in Sackett v. EPA, particularly where states may lack equivalent wetland or stream protections. The group’s specific arguments and any supporting materials should become clearer after OIRA updates the meeting record.

Bottom line: Wednesday’s session signals that the review may be entering its closing phase, but it is not necessarily the final word. Additional meetings can still be requested while the rule remains pending, and OIRA can continue working with EPA and the Army Corps on revisions. Agriculture’s absence from the meeting schedule is politically conspicuous, but its core positions are already in the formal record. The larger issue is whether the final text provides exclusions and definitions clear enough to survive both field-level implementation and the court challenges that are almost certain to follow.

■  ENERGY MARKETS & POLICY

—Brent rebounds as Red Sea attack tempers Hormuz optimism

A potential shipping deal is easing oil fears, but regional risks remain

Brent crude rose to around $81 per barrel Wednesday after Yemen’s Iran-aligned Houthis claimed they attacked a Saudi vessel near the Red Sea port of Yanbu. The rebound snapped a two-day decline, although prices remained well below recent highs as traders focused on signs that the Strait of Hormuz could soon reopen. WTI prices were around $77 per barrel. 

The U.S., Iran and Oman are reportedly nearing a 60-day interim agreement allowing vessels to move through the strait without tolls. President Donald Trump said negotiations were progressing well, while Qatar said an interim proposal had been drafted. Iran also was reportedly considering allowing European countries to help clear mines from the waterway.

A deal would reduce the immediate threat to Gulf oil exports, but an announcement alone would not restore normal trade. Mine clearance, shipping security, insurance coverage and confidence among tanker operators could delay a full recovery in traffic.

The reported Houthi attack also shows why reopening Hormuz would not eliminate the oil market’s geopolitical premium. Yanbu is the Red Sea outlet for Saudi Arabia’s East-West pipeline, which allows crude exports to bypass Hormuz. Attacks near that route could threaten one of the kingdom’s most important alternatives.

Saudi Arabia has reportedly opened talks with the Houthis through Omani mediators to prevent further escalation. Those discussions suggest Riyadh is trying to contain risks on both sides of the Arabian Peninsula.

For oil prices, the key test will be whether an interim agreement produces a sustained increase in tanker traffic. A successful reopening could push Brent lower, while renewed attacks or a breakdown in negotiations would quickly restore upward pressure.

—Ethanol blend rate hits record as war widens price advantage

May’s 11.29% rate strengthens the E15 case and could lift corn demand

U.S. ethanol use broke through the traditional 10% “blend wall” by a record margin in May as the war with Iran drove petroleum prices sharply higher and made ethanol exceptionally attractive to gasoline suppliers. The Renewable Fuels Association (RFA), citing new Energy Information Administration (EIA) data, said ethanol accounted for 11.29% of gasoline sold during the month, while the average blend rate for the 12 months ending in May reached a record 10.57%.

The May figure is significant because it shows that ethanol demand can respond quickly when market economics are strong enough. Most U.S. gasoline remains E10, but a national average above 11% indicates increased use of E15, E85 and other higher blends. It does not mean that all — or even most — gasoline shifted to E15, because E85 and ethanol-free gasoline also affect the national calculation. Still, the data show that the blend wall is increasingly an economic and regulatory constraint rather than an absolute physical limit.

War creates extraordinary blending incentive. According to RFA Chief Economist Scott Richman, ethanol traded at an average discount of nearly $1.50 per gallon to gasoline blendstock in May as disruptions associated with the Iran war pushed petroleum prices higher. D6 renewable identification number (RIN) credits also rose above the price of ethanol for the first time. Each gallon of conventional ethanol generates one D6 RIN that can be used by refiners to meet Renewable Fuel Standard obligations.

RFA estimated that ethanol reduced the physical fuel cost of E10 by about 14 cents per gallon in May while generating another 21 cents of RIN value. For E15, the estimated fuel-cost advantage was 21 cents per gallon, with approximately 31 cents of RIN value attached. In compliance-accounting terms, the RIN was worth more than the ethanol carrying it, making the implied net cost of the physical ethanol negative. That does not mean ethanol plants were literally paying buyers to take the fuel; rather, the combined value of the ethanol and its compliance credit made blending highly profitable for companies capable of capturing the RIN.

Consumers must also account for ethanol’s lower energy density. EIA says ethanol contains about 33% less energy per gallon than petroleum gasoline. Moving from E10 to E15 therefore reduces energy content by roughly 1.7%, implying a break-even discount of only about 6 cents per gallon when gasoline costs $3.50. That remains well below the 20- to 40-cent retail discounts RFA says are commonly offered for E15, leaving consumers with a meaningful cost-per-mile advantage under current conditions.

Potentially meaningful new corn demand. RFA calculates that maintaining May’s blend rate for an entire year, assuming gasoline consumption remained near the 2025 level, would increase ethanol use to approximately 15.4 billion gallons — more than 1 billion gallons above last year’s consumption.

At an industry conversion rate of roughly 2.8 gallons of ethanol per bushel, an additional 1 billion gallons would represent gross corn grind of about 350 million to 360 million bushels. Distillers grains and corn oil would return part of that feed value to the livestock sector, but the increase would still provide a substantial new source of demand at a time when projected U.S. corn supplies are large and export competition remains intense.

The demand response could also become self-correcting. More ethanol blending creates additional D6 RINs, which would likely push RIN prices lower and reduce the incentive that helped drive the initial surge. Lower RIN prices would benefit refiners facing high compliance expenses, but they would narrow part of ethanol’s current blending advantage. A reopening of the Strait of Hormuz and a sustained drop in gasoline prices could further compress the ethanol-gasoline spread.

Record strengthens congressional argument. The May data arrive as Congress considers removing the seasonal restriction that prevents E15 sales during the summer in much of the country. The House passed HR 1346, the Nationwide Consumer and Fuel Retailer Choice Act, on May 13 by a 218-203 vote. The Senate Agriculture Committee’s Farm Bill 2.0 proposal also includes authorization for year-round E15 sales.

The economic case is stronger than it has been in years: U.S. gasoline inventories remain below normal, petroleum-product markets are tight and ethanol is available at a steep discount. But legislation would not immediately convert the entire market. E15 is currently offered at just over 3,000 stations in 31 states, and broader expansion would still require retailer investment, compatible equipment and reliable regional supply chains.

Bottom line: The 11.29% blend rate demonstrates that consumers and fuel suppliers will move beyond E10 when price signals are sufficiently strong. The Iran war created an unusually favorable combination of expensive gasoline, comparatively cheap ethanol and high RIN values, so May should not automatically be treated as the new normal. However, the 10.57% rolling annual rate suggests the market was already moving structurally above the old blend wall. Permanent year-round E15 authority would allow that shift to continue without depending on emergency waivers or geopolitical disruptions.

— Montana Renewables anchors 30-million-gallon SAF supply at MSP

Deal fills Pine Bend capacity but remains dependent on incentives and demand

Montana Renewables said Tuesday it will supply up to 30 million gallons of unblended sustainable aviation fuel (SAF) annually to Minneapolis-St. Paul International Airport through its existing offtake agreement with Shell.

Montana Renewables will produce the fuel in Great Falls, Mont., while Shell will purchase, market and transport it. Flint Hills Resources will receive the unblended SAF at its Pine Bend refinery, blend it with conventional jet fuel and deliver the finished product to MSP through an existing pipeline.

The arrangement addresses a major SAF obstacle by integrating specialized production into an established airport fuel system. Pine Bend’s new blending facility can handle up to 30 million gallons of unblended SAF annually, matching the maximum supply announced by Montana Renewables.

However, “up to 30 million gallons” does not mean airlines have committed to purchase the full volume. The companies did not disclose pricing, contract length, minimum purchases or airline commitments. Actual deliveries will depend on customer demand and the price premium over conventional jet fuel.

The potential volume is meaningful. Delta Air Lines uses about 250 million gallons of jet fuel annually at MSP. Thirty million gallons would equal roughly 12% of Delta’s consumption at the hub, although other airlines also use the airport and Delta’s goal of obtaining 10% of its fuel from SAF by 2030 applies across its network.

The agreement also represents a major commitment for Montana Renewables. Parent company Calumet says the Great Falls facility currently produces about 30 million gallons of the renewable component used in SAF annually, meaning MSP could absorb nearly all existing output if deliveries reach the announced ceiling.

Montana Renewables is planning a major expansion backed by a $1.67 billion Energy Department loan guarantee. The project would increase total renewable-fuel production from about 140 million gallons annually to approximately 315 million gallons, with most of the added capacity expected to produce SAF.

Potential feedstocks include tallow, distillers corn oil, canola oil, used cooking oil and camelina. The company’s first MSP shipment in 2024 used winter camelina, but the new agreement does not require Minnesota-grown feedstocks. The immediate benefits will largely flow to Montana Renewables, Shell, Pine Bend and existing suppliers unless the hub stimulates Upper Midwest camelina production, oilseed processing or SAF manufacturing.

Government incentives remain central. Minnesota offers a $1.50-per-gallon refundable SAF credit, but statewide certificates are capped at $2.1 million in both fiscal 2026 and 2027. Spread across 30 million gallons, that would equal only about 7 cents per gallon.

Federal support also weakened after SAF lost its special Section 45Z credit rate for fuel produced after 2025. SAF now generally uses the same maximum base credit as other clean transportation fuels, adjusted for carbon intensity and inflation.

Bottom line: The agreement creates a repeatable supply corridor from Great Falls through Pine Bend to MSP and is more significant than a one-time demonstration shipment. But it does not guarantee that 30 million gallons will be purchased annually or that SAF can compete without public incentives and corporate buyers. Actual deliveries, pricing and new regional feedstock investment will determine whether the hub becomes commercially durable.

■  TRADE POLICY

—Canada revives metals quota plan as U.S. tariff deadline nears

Proposal could reduce steel and aluminum duties but leave broader tariffs intact

Canadian Trade Minister Dominic LeBlanc and chief negotiator Janice Charette are back in Washington as Ottawa seeks relief from escalating U.S. tariffs.

Negotiators are reviving a proposal that would allow a set volume of Canadian steel and aluminum to enter the U.S. at lower tariff rates, with shipments above the quota remaining subject to 50% duties. The arrangement could reduce costs for Canadian producers and U.S. manufacturers while allowing President Donald Trump to maintain limits on metals imports.

LeBlanc is expected to meet U.S. industry groups and senators who support the U.S.-Mexico-Canada Agreement. Meetings with U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick or other administration officials have not been confirmed.

A metals agreement would not resolve Trump’s separate plan to impose 50% tariffs Aug. 19 on about $20 billion of Canadian goods, including dairy products, alcohol and electronics. Those levies are part of a broader dispute over Canadian trade policies.

Ottawa therefore appears to be pursuing a partial deal that could ease metals tariffs or secure a temporary delay. A comprehensive agreement remains difficult because Washington is seeking concessions on dairy, autos and provincial restrictions on U.S. alcohol sales.

—CBP tariff refunds reach $100 billion, but processing pace slows

Nearly $29 billion in accepted claims still awaits final clearance

U.S. Customs and Border Protection (CBP) has now cleared approximately $100 billion in refunds for importers that paid tariffs imposed under the International Emergency Economic Powers Act (IEEPA), according to an Aug. 4 filing with the U.S. Court of International Trade. That represents roughly 60% of the approximately $165 billion collected before the Supreme Court ruled Feb. 20 that IEEPA did not authorize the tariffs.

CBP said its Consolidated Administration and Processing of Entries (CAPE) system had accepted roughly $129 billion in potential refunds covering about 25 million import entries as of July 31. Importers and customs brokers submitted 252,496 refund applications, with 178,213 — about 71% — passing the agency’s initial validation checks.

The figures show substantial progress but also a sizable remaining backlog. Nearly $29 billion in accepted claims has not yet cleared the entire payment process, while roughly $36 billion of the original tariff collections has not entered the accepted-refund pool. Some of that balance involves more complicated entries, including claims requiring manual review, disputed classifications, open protests or the reliquidation of entries that became final before the CAPE system was operating. CBP says valid claims generally take 60 to 90 days after acceptance to produce a refund.

The processing pace has slowed. CBP reported that $86.3 billion had been cleared and $121.75 billion accepted as of July 10. That means the following three weeks produced roughly $13.7 billion in additional refunds and about $7.3 billion in newly accepted claims. By comparison, nearly $49.2 billion was refunded during June alone. The slowdown likely reflects the exhaustion of larger, easier-to-verify claims and the movement toward smaller or more complicated entries.

The $100 billion milestone gives CBP evidence that its mass-refund system is functioning, but pressure from Congress will increasingly focus on how long individual businesses have been waiting rather than the aggregate amount returned. Sens. Ed Markey (D-Mass.), Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.) previously criticized the pace and sought additional information from CBP.

The economic benefits also remain uneven. Refunds go to the importer of record, not automatically to retailers or consumers that may have ultimately absorbed the tariff costs. Companies can use the money to rebuild margins, reduce debt or lower prices, but there is generally no requirement that the funds be passed through to customers. Meanwhile, the refunds continue to reduce federal customs revenue and increase near-term Treasury financing needs, even as the administration replaces the overturned duties with tariffs imposed under other trade statutes.

■  TRANSPORTATION & LOGISTICS

—Rotterdam shifts from lean logistics to crisis resilience

Europe’s biggest port builds buffers against war, cyberattacks and trade shocks

ShippingWatch reports that the Port of Rotterdam is moving its logistics philosophy from “just-in-time” toward “just-in-case,” reflecting a broader reassessment of the risks facing European trade. The change does not mean abandoning efficiency. Rather, Europe’s largest port is preparing to preserve essential cargo flows when shipping lanes, digital systems, energy supplies or inland transportation networks are disrupted.

Rotterdam’s importance makes the shift especially consequential. The port handled 212 million metric tons of cargo during the first half of 2026, up 0.4% from a year earlier. Container volume was nearly steady when measured in twenty-foot equivalent units, although container tonnage declined 2.6%, illustrating how the port continues to move enormous volumes even as trade patterns become less predictable.

Resilience becomes a strategic mission. For decades, Rotterdam’s competitive advantage rested on speed, scale and highly synchronized connections among ocean vessels, barges, railroads, pipelines, trucks and European industrial customers. The just-in-time model minimized inventories and kept terminals moving, but it also left manufacturers and consumers vulnerable when one link failed.

Limitations exposed. The Covid-19 pandemic, sanctions on Russia, disruptions around the Red Sea and Strait of Hormuz, cyberattacks and recurring congestion have exposed the limitations of systems designed with little spare capacity. Rotterdam’s response is effectively to place a higher value on redundancy: additional inventories, alternative transportation routes, backup digital systems, greater information sharing and sufficient terminal flexibility to absorb unexpected cargo surges.

That approach is now embedded in Rotterdam’s long-term planning. The port’s new strategic vision specifically elevates “resilience and agility,” including defenses against cyber threats, sabotage and failures involving navigation or communications technology. The port is studying emerging safeguards such as post-quantum encryption and sensors that could provide alternatives to satellite-based positioning.

Commercial port and NATO gateway. Rotterdam is increasingly being viewed not only as a commercial gateway but also as critical European security infrastructure. The Port Authority says the harbor provides storage and transit capacity for strategic freight and infrastructure needed for military mobility, making it important to Dutch, European and NATO logistics.

That dual role changes how capacity is valued. Empty warehouse space, unused rail slots or an alternative berth may appear inefficient during normal conditions but become strategically valuable during a military, energy or humanitarian emergency. Rotterdam also must be capable of handling commercial cargo while supporting movements of military equipment and essential supplies.

Greater coordination with other European ports, particularly Antwerp-Bruges, is therefore likely. In a crisis, Rotterdam cannot simply redirect cargo to another harbor without knowing whether that port’s terminals, railroads and inland waterways are also congested or impaired. Resilience requires planning across the entire northern European port network rather than competition among individual ports.

Cybersecurity is the immediate test. Digital vulnerability may be the most immediate threat. Automated cranes, terminal operating systems, customs platforms and cargo-release systems allow Rotterdam to handle large volumes efficiently, but a successful ransomware or infrastructure attack could stop container movements and rapidly create congestion extending into European factories and distribution centers.

Beginning Aug. 15, hundreds of companies operating in the port will face strengthened cybersecurity requirements, including duties to manage risks and report significant incidents. Rotterdam also has established a secure system through which participating companies can exchange threat and incident information with the FERM Seaports cybersecurity network.

The collective approach is important because the port is only as secure as its weakest logistics provider. A well-protected terminal can still be disrupted if a trucking company, customs intermediary or software vendor is compromised.

More inventories — but also higher costs. The just-in-case model carries a price. Companies may hold larger stocks of fuel, critical minerals, chemicals, pharmaceuticals, food ingredients and replacement equipment. That requires additional warehouse and tank capacity, more working capital, higher insurance expenses and increased security.

Space is already scarce in Rotterdam. The Port Authority and Dutch government began studying how to balance industrial expansion, strategic storage, military requirements and local environmental concerns.

Consequently, resilience could raise European logistics costs even when no crisis occurs. But the calculation has changed: businesses and governments increasingly view those expenses as an insurance premium against plant shutdowns, shortages and extreme price spikes.

Implications for agriculture and commodities. For agricultural and energy markets, additional European stockpiling could produce uneven effects. Larger inventories of fertilizer ingredients, feed components, vegetable oils, grains, fuel and industrial raw materials would reduce the immediate impact of a temporary shipping interruption. They also could keep processors and livestock operations supplied during short-lived disruptions.

Building those inventories, however, could periodically front-load imports, strengthen nearby freight demand and tighten storage capacity. Once reserves are filled, normal purchasing could temporarily slow. Commodity exporters therefore may see more uneven buying patterns even as European supply security improves.

The broader implication is that Rotterdam is preparing for volatility to become a permanent operating condition rather than an occasional exception. The port’s shift is less a rejection of just-in-time logistics than the development of a hybrid system: efficiency during normal periods, combined with enough inventory, redundancy and coordination to keep Europe operating when normal trade routes fail. That will cost more, but repeated crises have convinced European planners that a supply chain optimized solely for the lowest cost may ultimately be the most expensive system of all.

■  POLITICS & ELECTIONS

—Michigan Senate cliffhanger caps split primary verdict

El-Sayed leads narrowly as voters mix insurgency with pragmatism

Primary voters across Michigan, Missouri, Kansas, Virginia and Washington delivered a mixed verdict Tuesday, rewarding far left challengers in some contests while favoring establishment-backed candidates elsewhere.

The most consequential race — Michigan’s Democratic U.S. Senate primary — remained uncalled early Wednesday — the Associated Press has not yet called the race but NBC News declared El-Sayed the winner. Progressive former public-health official Abdul El-Sayed led Rep. Haley Stevens (D-Mich.) 48.7% to 47.3%, with roughly 95% of the estimated vote counted.

The winner will face former Rep. Mike Rogers (R-Mich.) for the seat being vacated by retiring Sen. Gary Peters (D-Mich.). With Republicans holding a 53-47 Senate majority, Michigan is a must-win state for Democrats seeking control.

El-Sayed, backed by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), was heavily outspent by Stevens, who received support from Gov. Gretchen Whitmer (D), Peters and groups affiliated with the American Israel Public Affairs Committee.

Even without a final result, El-Sayed’s showing demonstrated far left strength. But the narrow margin also highlights the challenge of uniting Democrats for a difficult general election against Rogers.

Elsewhere in Michigan, Secretary of State Jocelyn Benson won the Democratic nomination for governor and will face Trump-endorsed Rep. John James (R-Mich.). James defeated businessman Perry Johnson despite Johnson spending more than $30 million of his own money.

Far left organizer William Lawrence won the Democratic nomination in Michigan’s competitive 7th Congressional District. His victory was aided by a divided moderate field, and Republicans will seek to portray his climate activism and ties to Sanders as outside the district’s mainstream.

In Missouri, Rep. Wesley Bell (D-Mo.) decisively defeated former Rep. Cori Bush (D-Mo.), blocking her attempt to reclaim the St. Louis-area seat she lost in 2024. Bell’s victory showed the continuing strength of incumbency and party support against progressive challengers.

Rep. Marie Gluesenkamp Perez (D-Wash.) also easily survived a challenge from the left in Washington’s top-two primary. Her performance reinforced the argument that ideological flexibility remains important for Democrats representing rural or Republican-leaning districts.

Virginia Democrats generally favored experienced candidates viewed as competitive in November. Former Reps. Elaine Luria (D-Va.) and Tom Perriello (D-Va.) won nominations, while prosecutor Shannon Taylor advanced in another Republican-held district.

Kansas Senate President Ty Masterson won the Republican nomination for governor with President Donald Trump’s endorsement. But Kansas voters rejected a Republican-backed constitutional amendment that would have replaced merit-based selection of Supreme Court justices with partisan elections.

Bottom line: Tuesday produced no clear victory for either Democratic far left nominees or the party establishment. Far left candidates showed strength in Michigan, but establishment-oriented candidates prevailed in Missouri, Washington and Virginia. Republicans largely followed Trump’s endorsements, though Kansas voters rejected a major conservative proposal affecting the courts.

The unresolved Michigan Senate contest remains the night’s defining race. A likely El-Sayed victory would intensify the debate over whether economic populism can succeed statewide, while a Stevens comeback would strengthen the establishment’s case for moderation in battleground elections.

■  WEATHER

— NWS outlook: There is a Slight Risk (level 2/4) of excessive rainfall over parts of the South Carolina Coast and the Upper Great Lakes, Middle Mississippi Valley into the Central Plains on Wednesday… …There is a Marginal Risk (level 1/4) of excessive rainfall over parts of the Northeast, Great Lakes, and Middle Mississippi Valley into the Central/Southern Plains and the Southwest on Thursday… …Poor air quality for the Pacific Northwest and Great Basin.
 

—Corn Belt storm track holds as southern Plains heat risk deepens

Midwest moisture improves while drought and livestock risks shift south

The U.S. crop-weather pattern is becoming increasingly divided. A persistent west-to-northwest flow should keep clusters of thunderstorms moving along the northern edge of the central U.S. ridge, providing the Corn Belt with repeated opportunities for rain through mid-August. Meanwhile, strengthening high pressure farther south is expected to sharply increase heat and moisture stress from Kansas and Oklahoma into Texas and the lower Mississippi Valley.

The pattern remains broadly favorable for corn and soybeans across much of the central and eastern Corn Belt. The reported 2 to 3 inches or more of overnight rain in southwestern Iowa and eastern Nebraska arrived during an important stage of crop development, when corn is filling kernels and soybeans are setting and filling pods. USDA reported 43% of the corn crop had reached the dough stage as of Aug. 2, compared with the five-year average of 38%, while 62% of soybeans were setting pods, seven percentage points ahead of average. That makes August moisture especially valuable for preserving kernel weight and pod development.

However, “daily thunderstorm chances” should not be interpreted as uniform rainfall. Ridge-rider systems frequently travel in narrow corridors, repeatedly soaking some counties while missing areas only 50 to 100 miles away. NOAA’s latest outlook favors above-normal precipitation most strongly around portions of the Great Lakes, Upper Mississippi Valley and Ohio Valley, with only modest confidence in exactly where individual storm complexes will track. NOAA also identifies a slight risk of heavy precipitation across parts of the Great Lakes, Ohio Valley and Upper Mississippi Valley from Aug. 12-14.

That variability is particularly important in Nebraska. Before the latest rains, USDA rated 70% of Nebraska topsoil and 73% of its subsoil as short or very short. Iowa entered the week in better shape, although 35% of its topsoil was still short or very short. The recent rainfall should produce meaningful improvement in the areas that received it, but it will not eliminate moisture deficits across western and northern Nebraska.

For the broader corn and soybean markets, the pattern remains more yield-supportive than threatening. National corn conditions slipped to 61% good to excellent during the week ended Aug. 2, down two percentage points, while soybean ratings held at 63%. Continued rain without sustained extreme heat would limit additional deterioration and reinforce expectations for large crops. Localized flooding, nitrogen loss, root disease and wind damage remain possible, but those risks are unlikely to outweigh the regional benefit of replenished soil moisture unless storm systems begin repeatedly flooding the same areas.

Northern Plains risk is gradual rather than catastrophic. The northern Plains face a less favorable moisture outlook. Periodic storms remain possible, but forecast rainfall may not be sufficient to meet crop-water demand across the Dakotas and parts of Montana. USDA already classified 67% of North Dakota topsoil and 65% of South Dakota topsoil as short or very short. Corn was rated just 37% good to excellent in North Dakota and 50% in South Dakota, while soybean ratings stood at 44% and 54%, respectively.

The saving factor is temperature. The absence of prolonged triple-digit heat should slow moisture loss and prevent the kind of abrupt crop failure that can occur when drought and extreme heat overlap. The likely outcome is continued uneven deterioration rather than widespread collapse, with yield losses concentrated in fields with shallow soils or limited subsoil reserves. Spring wheat, corn, soybeans, sunflowers and pastures remain vulnerable, but cooler nights and intermittent showers should preserve some production potential.

Southern Plains heat becomes the main threat. The most consequential forecast change is the strengthening heat signal across the southern and central Plains. NOAA places portions of the region under a moderate risk of extreme heat from Aug. 12-15 and warns that rapid-onset drought could develop across parts of the central and southern Plains and the middle and lower Mississippi Valley. Forecast tools show unusually high probabilities of temperatures or heat indexes exceeding the 90th percentile, particularly from eastern Texas into the lower Mississippi Valley.

The region has little moisture buffer. As of Aug. 2, topsoil was rated short or very short across 54% of Kansas, 60% of Oklahoma and 71% of Texas. Texas pasture and range conditions were already 38% poor to very poor, while Oklahoma stood at 35%. Triple-digit temperatures, warm nights and strong evaporation will quickly reduce stock-water supplies, damage pastures and increase heat stress on cattle, particularly where shade and water capacity are limited.

Sorghum, cotton, late corn and soybeans face the most immediate crop risk. Only 33% of Texas sorghum and 28% of Texas cotton were rated good to excellent in USDA’s latest report. Irrigated production will face rising pumping requirements, while dryland fields could deteriorate rapidly once temperatures remain above 100 degrees for several consecutive days.

The threat to the hard red winter wheat belt is more indirect. Most of the current winter wheat crop has already been harvested, so August heat will not materially reduce 2026 production. The greater concern is whether dryness persists into September and October, leaving inadequate moisture for seedbed preparation, wheat emergence and fall pasture development. The immediate economic effects will be felt more heavily by cattle, sorghum, cotton and hay producers than by the harvested wheat crop.

Mid-South dryness could intensify quickly. The Mid-South also remains vulnerable. USDA rated 57% of Arkansas, 62% of Louisiana and 50% of Mississippi topsoil as short or very short before the anticipated heat escalation. A hotter and drier second week of August would increase stress on soybeans, cotton and rice, raise irrigation costs and offer little help to low regional waterways.

The overall weather story is therefore not a nationwide drought threat but a migration of risk. The core Corn Belt retains a generally favorable moisture pattern, although storm coverage will remain uneven. The northern Plains may experience gradual yield erosion without devastating heat. The southern Plains and Mid-South face the clearest prospect of rapid deterioration as extreme heat combines with limited rainfall and already-depleted soil moisture.

For commodity markets, that keeps the weather outlook mostly bearish for corn and soybeans while adding potential risk premiums to cotton, sorghum, cattle and eventually hard red winter wheat if the dry pattern extends into the fall planting season.

■  REFERENCE LINKS TO KEY TOPICS

Index to links of special reports & other items of note