USDA Nears Rollout of Disaster Aid, Loan Rate Changes and Sugar Program Updates

Former Fed Chair Greenspan dies at 100 | Europe’s key grain growing areas facing torrid temps | China and U.S. soybeans | Fertilizer update

Link: The Week Ahead: June 21

Wiesemeyer’s Perspectives podcast available later today

TOP STORIES
 

— U.S./Iran talks show progress, but the hardest issues still lie ahead: Switzerland talks produced a 60-day roadmap, but Hormuz, Lebanon and nuclear disputes remain unresolved.

— Strait of Hormuz risk eases as maritime security alert is downgraded: JMIC lowered its threat assessment after the U.S./Iran MOU, though mine-clearing operations continue.

— Starmer resigns, opening another chapter of UK political instability: The British PM steps aside amid a party revolt, with Andy Burnham seen as the frontrunner to replace him.

— Screwworm outbreak expands as U.S. cases reach 15: Three new Texas detections push the total higher as USDA intensifies containment efforts.
 

FINANCIAL MARKETS
 

— Equities today: S&P 500 futures slip slightly while Treasury yields rise on lingering inflation concerns.

— Markets brace for key inflation test as Fed’s new era takes shape: The PCE report and other data will gauge consumer resilience as Fed Chair Kevin Warsh settles in.

— Coca-Cola tax battle could reshape multinational tax enforcement: A Miami court fight over transfer pricing carries more than $20 billion in potential liability.

— Danone bets big on protein boom with $1.4 billion Made Group acquisition: The deal underscores surging global demand for high-protein dairy products.

— Alan Greenspan, architect of modern monetary policy, dies at 100: The former Fed chairman leaves a legacy shaped by both economic expansion and the 2008 financial crisis.
 

AG MARKETS
 

— Grains mixed overnight as soy complex extends strength while wheat leads lower: Soybeans draw support from China demand and biofuel optimism while corn and wheat face weather and supply pressure.

— Soyoil rally reflects growing pressure on renewable diesel feedstock markets: EPA data shows biofuel production lagging new RFS mandates, lifting soyoil demand.

— Europe faces crop stress as extreme heat grips key growing regions: Triple-digit temperatures and dryness threaten corn, sunflowers and wheat before relief arrives next week.

— China’s soybean buying pace back in focus after holiday: Traders watch for fresh purchases as Beijing works toward its 25-million-metric-ton import pledge under lower tariffs.
 

FERTILIZER
 

— Fertilizer markets face long road back despite Strait of Hormuz reopening: TFI’s Corey Rosenbusch warns that production losses and sulfur shortages could linger well beyond the shipping resumption.
 

FARM POLICY

— USDA nears rollout of disaster aid, loan rate changes and sugar program updates: OMB completed its review, clearing the way for USDA to implement key OBBBA farm safety net provisions.

ENERGY MARKETS & POLICY
 

— Oil markets ease as diplomacy offsets geopolitical risk premium: Brent slips below $80 as progress in U.S./Iran talks and continued Hormuz transits calm traders.

TRADE POLICY
 

— Brazil’s U.S. export exposure deepens as new tariff threats loom: Brazilian shipments to the U.S. have hit a three-decade-low share amid proposed Section 301 tariffs.
 

WEATHER
 

— NWS outlook: Scattered heavy rain and severe weather are possible from the Northeast to the High Plains, with above-average heat building across the West and Southeast.

— Corn Belt faces wetter pattern and emerging heat risk: Heavy rain delays wheat harvest now, while warmer temperatures loom for early July.
 

—Equities today: S&P 500 futures are down slightly. But the rebound last week put the index about 1.5% shy of a new record. Bonds continue to slump. The yield on the 10-year Treasury note rose to roughly 4.5% as bondholders continue to worry about rising inflation and the chance of higher borrowing costs.

In Asia, Japan +1.6%. Hong Kong -0.7%. China +1.8%. India +0.4%.
 

In Europe, at midday, London +0.4%. Paris -0.5%. Frankfurt -0.2%.

—Markets brace for key inflation test as Fed’s new era takes shape

PCE report, consumer spending and growth data offer fresh clues on the economy ahead of the Middle East ceasefire

This week’s economic calendar arrives at a critical moment for financial markets, policymakers and businesses trying to gauge whether the U.S. economy can continue expanding while inflation pressures remain elevated. The centerpiece will be the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation measure, which will provide a fresh look at both price trends and the resilience of American consumers. Because consumer spending accounts for roughly two-thirds of U.S. economic activity, the report will serve as a key test of whether households are continuing to absorb higher costs or beginning to show signs of fatigue.

So far, consumer demand has proven remarkably resilient. Despite higher energy costs linked to instability in the Middle East and broader concerns about inflation, spending has remained surprisingly firm. Households have adjusted purchasing habits, trading down in some categories and prioritizing essential spending, but there has been little evidence of the broad-based pullback that many economists expected earlier this year. The upcoming PCE report will help determine whether that resilience persisted through the latest inflation surge and whether consumers continued to support economic growth despite growing pressures on household budgets.

The inflation data will be accompanied by a broad range of economic indicators that together should provide a more complete picture of economic momentum entering the second half of the year. Revised first-quarter GDP figures will offer another look at the economy’s underlying growth rate, while durable goods orders will reveal whether businesses remain willing to invest in equipment and capital expenditures.

Additional reports on trade, inventories and regional manufacturing activity will provide insight into supply chains, industrial demand and business confidence. Consumer sentiment readings will also be closely watched for evidence that higher fuel prices and geopolitical uncertainty have begun affecting household psychology.

One important caveat is that much of the data scheduled for release this week reflects economic conditions before the recent ceasefire agreement between the United States and Iran. As a result, investors will be evaluating a snapshot of the economy during a period when oil markets were grappling with significant uncertainty surrounding shipping routes, energy supplies and the broader geopolitical outlook. Any improvement in sentiment or moderation in energy prices resulting from the ceasefire will likely not be fully reflected in the reports. That means markets may need to distinguish between backward-looking economic data and a potentially improving forward-looking environment.

The Federal Reserve remains another major focus. While the speaking calendar for policymakers is relatively light, market participants will be paying close attention to any unscheduled interviews, media appearances or comments that could shed light on the central bank’s thinking. Last week’s Federal Open Market Committee meeting was the first major policy gathering under Fed Chair Kevin Warsh, and investors are still assessing what his leadership may mean for future interest-rate decisions.

Warsh inherits an economy that continues to grow but faces competing forces. Inflation remains above the Fed’s long-term target, particularly in services and energy-sensitive categories, while some sectors of the economy show signs of slowing. His challenge will be balancing concerns about inflation persistence against the risk of unnecessarily restricting growth. Markets are searching for clues about whether Warsh will place greater emphasis on inflation control, economic growth or financial-market stability than his predecessor.

The combination of inflation data, consumer spending trends and growth indicators could significantly influence expectations for the Fed’s next moves. If PCE inflation remains stubbornly elevated while spending stays strong, policymakers may feel less urgency to ease monetary policy. Conversely, evidence of moderating inflation alongside softer demand could strengthen expectations that the Fed will eventually gain greater flexibility. Either way, this week’s reports will help shape the debate over whether the U.S. economy is headed toward a soft landing, renewed inflation concerns or a more pronounced slowdown as the effects of recent geopolitical turmoil work their way through the system.

For investors, businesses and policymakers alike, the week’s economic releases represent one of the most important checkpoints of the summer. The data will provide a clearer picture of how the economy performed during one of the year’s most volatile periods and offer valuable clues about the trajectory of inflation, growth and monetary policy in the months ahead.

—Coca-Cola tax battle could reshape multinational tax enforcement

Landmark court fight carries more than $20 billion in potential liability and broad implications for corporate America

Corporate America will be closely watching as Coca-Cola begins arguments this week in a federal court in Miami in what has become one of the most consequential tax disputes in decades. At the center of the case is a long-running battle with the Internal Revenue Service over transfer pricing—the method multinational companies use to allocate profits among domestic and foreign subsidiaries. While the dispute is specific to Coca-Cola’s global operations, the outcome could influence how the IRS approaches similar cases involving many of the world’s largest corporations.

The controversy stems from the IRS’s assertion that Coca-Cola improperly allocated too much profit to foreign affiliates, thereby reducing its U.S. tax liability. The agency has argued that a greater share of the company’s global earnings should have been reported and taxed in the United States. Coca-Cola has maintained that its accounting methods were consistent with longstanding agreements and accepted tax principles. The dispute dates back more than a decade and has already generated significant litigation, but the latest court proceedings could determine whether the company ultimately faces a tax bill exceeding $20 billion when taxes, penalties, and interest are included.

Beyond the financial impact on Coca-Cola, the case arrives at a pivotal moment for international taxation. Governments around the world have become increasingly aggressive in challenging cross-border profit allocation strategies used by multinational corporations. Transfer pricing disputes have emerged as one of the most important battlegrounds in tax enforcement because they directly affect where profits are taxed and how much revenue governments collect. A favorable ruling for Coca-Cola could limit the IRS’s ability to revisit longstanding transfer-pricing arrangements and provide a stronger defense for other multinational firms facing similar audits.

Conversely, a victory for the government could embolden tax authorities to pursue larger assessments against companies with substantial overseas operations.

The case also underscores the broader tension between globalization and tax policy. Multinational companies argue that intellectual property, branding, and foreign distribution networks create value across multiple jurisdictions, justifying profit allocations outside the United States. Tax authorities counter that companies often shift too much income into lower-tax jurisdictions, eroding the domestic tax base. As governments search for revenue and seek to curb profit-shifting strategies, disputes like Coca-Cola’s have become increasingly common.

For investors, the immediate focus will be on the financial implications for Coca-Cola. However, the larger significance lies in the precedent that could emerge from the court’s decision. A ruling that narrows the IRS’s authority could affect billions of dollars in future tax assessments across numerous industries, from technology and pharmaceuticals to consumer products. In that sense, the case is about far more than a single company’s tax bill — it is a test of how multinational profits will be taxed in an era of increasingly complex global business structures and heightened scrutiny from tax authorities.

—Danone bets big on protein boom with $1.4 billion Made Group acquisition

High-protein trend reshapes global dairy markets as consumer demand outpaces supply

Danone’s $1.4 billion acquisition of Australian dairy producer Made Group underscores how the global food industry is racing to capitalize on the surging consumer appetite for protein-rich foods. The deal strengthens Danone’s position in one of the fastest-growing categories in food retail, where demand for high-protein dairy products — from shakes and yogurts to cottage cheese and functional beverages — continues to accelerate across North America, Europe and Asia-Pacific.

The acquisition is more than a simple portfolio expansion. Analysts say it reflects a broader shift in consumer behavior often described as “protein-maxxing,” where consumers actively seek to maximize daily protein intake for weight management, muscle health, satiety and overall wellness. Once largely confined to athletes and bodybuilders, protein-focused diets have become mainstream, attracting everyone from Gen Z consumers to aging populations looking to preserve muscle mass.

Danone has been among the major beneficiaries of the trend through brands such as Oikos and other functional dairy offerings. By acquiring Made Group, known for its premium dairy and protein beverage capabilities, Danone gains additional manufacturing capacity and product innovation expertise at a time when competition for market share in the protein segment is intensifying.

The strength of the trend is perhaps best illustrated by the unexpected shortages emerging in the United States. Cottage cheese, long viewed as a niche dairy product, has experienced a dramatic resurgence as consumers embrace high-protein eating habits. Social media platforms have amplified the trend, with influencers promoting cottage cheese as a versatile ingredient for everything from breakfast bowls and smoothies to desserts and high-protein snacks. The result has been a demand surge that has periodically outstripped production capacity, creating supply disruptions in some regions.

For dairy markets, the protein boom is creating both opportunities and challenges. Strong demand supports higher utilization rates at processing plants and encourages investment in new capacity. At the same time, processors must secure sufficient milk supplies while balancing competing demand for butterfat, cheese and other dairy ingredients. Companies that can efficiently convert milk into high-value protein products stand to capture some of the strongest margins in the food sector.

The implications extend beyond dairy processors. Farmers supplying milk are increasingly benefiting from a market that places greater value on protein content, while ingredient manufacturers are investing heavily in technologies that concentrate and isolate dairy proteins for use in beverages, nutrition products and functional foods.

Danone’s acquisition signals that large food companies believe the protein trend remains in its early stages rather than approaching a peak. The willingness to spend $1.4 billion on a specialized dairy producer suggests executives expect protein-focused foods to remain a central growth engine for the industry for years to come. If current consumer behavior persists, the recent cottage cheese shortages may prove to be less of an anomaly and more of an early warning that protein demand is beginning to reshape dairy supply chains worldwide.

—Alan Greenspan’s legacy: architect of modern monetary policy dies at 100

Longtime Fed chairman helped shape decades of economic expansion but remained a controversial figure after the financial crisis

Former Federal Reserve Chairman Alan Greenspan has died at the age of 100, according to his wife, Andrea Mitchell. His death marks the end of an era for one of the most influential and debated economic policymakers in modern U.S. history.

Greenspan led the Federal Reserve from 1987 to 2006, serving under four presidents and becoming one of the most recognizable central bankers ever to hold the position. During his nearly two decades at the Fed, he oversaw periods of robust economic growth, declining inflation, rapid technological innovation and rising financial market wealth. His tenure included the aftermath of the 1987 stock market crash, the 1990 recession, the Asian financial crisis, the collapse of Long-Term Capital Management and the bursting of the dot-com bubble. Throughout much of that period, investors viewed Greenspan as a steady hand whose policy decisions helped extend economic expansions and stabilize markets.

His influence was so significant that economists and market participants often referred to the “Greenspan Put,” the belief that the Federal Reserve would step in with easier monetary policy whenever financial markets came under severe stress. That perception helped cement his reputation as a central banker willing to act aggressively to prevent economic downturns and financial instability.

Yet Greenspan’s legacy became far more complicated after the housing boom and subsequent financial crisis of 2007-09. Critics argued that the prolonged period of low interest rates following the 2001 recession contributed to excessive risk-taking, rapid home-price appreciation and an unsustainable expansion of mortgage lending. Others contended that his longstanding support for financial deregulation left the financial system vulnerable to the collapse that followed. In congressional testimony after the crisis, Greenspan famously acknowledged flaws in some of his assumptions about the ability of markets to regulate themselves, a rare admission from a policymaker once viewed as nearly infallible.

For today’s policymakers, Greenspan’s career remains highly relevant. Many of the debates that dominate monetary policy today — including how aggressively central banks should respond to market turmoil, the risks of keeping interest rates too low for too long, and the balance between regulation and market discipline — trace directly back to decisions made during his tenure. His experience serves as both a model of successful inflation management and a cautionary tale about the unintended consequences that can emerge from extended periods of monetary accommodation.

Greenspan leaves behind a legacy that is difficult to categorize simply as success or failure. He helped guide the U.S. economy through multiple crises and became a symbol of central bank credibility at a time when inflation was largely subdued. At the same time, the financial crisis that erupted shortly after his departure permanently altered perceptions of his record. As economists and policymakers assess his impact, Greenspan is likely to be remembered both as the central banker who defined an era of prosperity and as a key figure in the policy debates that followed one of the most severe financial disruptions since the Great Depression.

—Grains mixed overnight as soy complex extends strength while wheat leads lower

Soybean buying interest and renewable fuel optimism support oilseeds, but wheat and corn face pressure from weather and supply concerns

Overnight grain trade was mixed heading into Monday morning, with the soybean complex extending recent gains while corn and wheat futures moved lower. 

July soybeans traded at $11.2625 per bushel, up 3½ cents, supported by continued optimism surrounding Chinese buying interest, stronger soyoil values, and expectations that renewable diesel producers will need to increase feedstock consumption to meet higher biofuel mandates (see next item). July soyoil added 0.11 cents to 69.80 cents per pound, while July soybean meal rose $0.50 per ton to $301.80.

The soybean market continues to draw support from expectations that China will need to accelerate U.S. soybean purchases to meet commitments under the latest U.S./China trade framework (see related item). Market participants are also focusing on tightening vegetable oil fundamentals. Recent EPA renewable fuel data showed biodiesel and renewable diesel production remains below the pace needed to satisfy the higher Renewable Volume Obligations (RVOs), implying that feedstock demand, particularly for soyoil, will need to increase substantially in coming months. That dynamic continues to provide an underlying floor beneath the soybean complex despite favorable growing conditions across much of the Midwest.

Corn futures were modestly lower, with July corn down 2¾ cents at $4.1475 per bushel. The market remains pressured by generally favorable U.S. weather forecasts. Forecasts call for near- to above-normal precipitation across much of the Corn Belt over the next two weeks, with temperatures expected to moderate after a cooler-than-normal start to the growing season. While excessive rainfall has delayed wheat harvest activity in portions of the eastern Corn Belt and created localized ponding concerns, traders generally view current conditions as supportive of corn yield potential. With USDA already projecting a record crop, weather remains a bearish influence unless forecasts turn significantly hotter and drier during pollination.

Wheat futures led the downside overnight, reflecting improving global supply prospects and harvest pressure. July Chicago SRW wheat fell 5¼ cents to $6.0050 per bushel, while July Kansas City HRW wheat dropped 7¼ cents to $6.3675. The market continues to monitor harvest progress across the Southern Plains, where combines are advancing despite periodic weather interruptions. At the same time, Russian and Black Sea export competition remains intense, limiting upside opportunities for U.S. wheat. Traders are also weighing forecasts for improving moisture across portions of Europe after a recent heatwave raised concerns about crop stress.

The broader grain market enters the week focused on weather, export demand, and Friday’s Personal Consumption Expenditures (PCE) inflation report, which could influence outside markets, the dollar, and investment fund participation in agricultural commodities. For now, soybeans are drawing support from demand-related stories, while corn and wheat remain anchored by expectations for ample global supplies and generally favorable Northern Hemisphere growing conditions.

—Soyoil rally reflects growing pressure on renewable diesel feedstock markets

EPA data highlights a widening gap between biofuel production and federal mandates

The sharp rally in soybean oil following the release of EPA’s May Renewable Identification Number (RIN) generation data underscores mounting concerns that renewable diesel production is not keeping pace with the agency’s newly finalized Renewable Fuel Standard (RFS) requirements. While D4 biomass-based diesel RIN generation increased to 736 million in May from 710 million in April, the improvement remains insufficient relative to the production levels needed to satisfy the significantly higher Renewable Volume Obligations (RVOs) established for 2026 and 2027.

The key issue is not whether renewable diesel output is growing, but whether it is growing fast enough. Industry estimates suggest renewable diesel and biodiesel facilities operated at roughly 76% of capacity during May. To meet EPA’s new mandates, utilization rates likely need to approach 90% or higher for an extended period. That leaves a sizable production gap that must be closed either through increased operating rates, new capacity additions, or accelerated use of banked RIN credits.

The market is increasingly focused on that last factor. The accumulated RIN bank has served as a cushion for obligated parties and biofuel producers over the past several years, allowing compliance even when current production falls short of annual requirements. However, the latest EPA data suggest those inventories are being drawn down rapidly. As the surplus shrinks, the value of additional biofuel production rises, creating stronger incentives for renewable diesel plants to maximize output.

That dynamic is particularly supportive for soybean oil. Among major feedstocks, soybean oil currently remains one of the most readily available and economically attractive options for renewable diesel producers. Competing feedstocks such as used cooking oil, animal fats, and imported waste oils face supply limitations, logistical constraints, or regulatory uncertainty. As renewable diesel operators respond to stronger RIN values and tightening compliance margins, soybean oil demand is expected to absorb a larger share of the required production increase.

The implications extend beyond the biofuel sector. Stronger soybean oil demand could improve crush margins and encourage additional soybean processing investment, reinforcing a trend already underway across the Midwest. For soybean farmers, the EPA’s higher biofuel mandates are increasingly translating into tangible demand growth for soybean oil rather than simply theoretical policy support.

Looking ahead, traders will closely monitor monthly RIN generation data for signs that renewable diesel producers are increasing operating rates. If production remains below levels needed to satisfy the new mandates, RIN inventories could tighten further, potentially leading to higher RIN prices and additional strength in soybean oil. In that scenario, the market’s focus would shift from whether the mandates can be met to how aggressively feedstock demand must rise to ensure compliance. For now, the May data suggest the industry still has significant ground to make up, and soybean oil appears positioned to be one of the primary beneficiaries of that adjustment.

—Europe faces crop stress as extreme heat grips key growing regions

Triple-digit temperatures and dryness threaten yield potential before relief arrives

Western and Central Europe are entering one of the most significant early-summer heat events in recent years, with temperatures forecast to average 10 to 20 degrees Fahrenheit above normal across major agricultural areas during the next week. Parts of France are expected to experience multiple days above 100 degrees, while rainfall remains well below seasonal averages. The combination of intense heat and limited soil-moisture replenishment is raising concerns for crop development at a critical stage of the growing season.

The greatest vulnerability lies in France, Germany, Poland, and portions of Eastern Europe, where corn, sunflowers, sugar beets, and spring grains are entering periods of rapid vegetative growth. While most regions entered summer with generally adequate moisture reserves, the projected heat surge will sharply increase evapotranspiration rates, accelerating water loss from soils and placing crops under stress. Corn is particularly sensitive to prolonged heat during key growth phases, and even short periods of moisture deficits can trim yield potential if temperatures remain elevated for several consecutive days.

Winter wheat presents a mixed picture. The heat may help accelerate maturation and harvest progress in some areas, but fields already facing moisture shortages could see grain-fill periods shortened, reducing kernel weight and overall production. In France, Europe’s largest grain producer, traders will be closely monitoring whether the heatwave becomes prolonged enough to materially alter yield expectations heading into harvest.

Beyond crop impacts, the weather pattern carries broader market implications. Europe has generally avoided the severe drought episodes that plagued parts of the continent in recent years, but the current forecast represents a reminder that weather risks remain elevated. With global grain markets already balancing weather concerns in North America, South America, and the Black Sea region, any deterioration in European production prospects would add another layer of uncertainty to global supply outlooks.

The encouraging aspect of the forecast is that the pattern is not expected to remain static. During the second week of the outlook period, temperatures are projected to moderate somewhat while precipitation chances improve across portions of Western and Central Europe. The return of rainfall could stabilize crop conditions and prevent the current heat episode from evolving into a more damaging drought event. However, the timing and coverage of those rains will be critical. Crops can often recover from a brief heatwave if moisture arrives promptly, but each additional day of extreme temperatures increases the risk of irreversible yield losses.

For agricultural markets, the next two weeks will likely determine whether this event becomes a short-lived weather scare or develops into a more consequential threat to European grain production. For now, the forecast points to meaningful crop stress rather than outright crop failure, but conditions warrant close monitoring as Europe moves deeper into the heart of its growing season.

—China’s soybean buying pace back in focus after holiday

Lower tariffs and purchase commitments put U.S. soybeans in a stronger competitive position

With Chinese markets reopening following the Dragon Boat Festival holiday, grain traders will be closely monitoring for fresh announcements of U.S. soybean purchases. The timing is important because attention is increasingly shifting from political commitments to actual buying activity as China works toward meeting its pledge to import roughly 25 million metric tons of U.S. soybeans by the end of 2026.

Some analysts estimate China would need to purchase approximately 1 million metric tons of U.S. soybeans per week on average to stay on track with that target. While weekly buying patterns are rarely uniform, the benchmark provides the market with a useful gauge for evaluating whether China is making sufficient progress. Any series of large daily USDA export sales announcements in the coming weeks would be viewed as evidence that Chinese importers are accelerating purchases, while a prolonged absence of sales could raise questions about the pace needed to fulfill commitments.

The economics of the trade have improved significantly. China’s effective tariff rate on U.S. agricultural products is estimated at roughly 21%, far below the punitive tariff levels that often approached or exceeded 55% during the height of recent trade disputes. That reduction dramatically improves the competitiveness of U.S. soybeans relative to alternative origins and helps explain why analysts expect Chinese buyers to return more aggressively to the U.S. market.

Price competitiveness remains the primary driver. China is the world’s largest soybean importer, and its crushing industry requires a steady flow of soybeans to produce soybean meal for livestock feed and soyoil for food and industrial uses. While Brazil will remain China’s dominant supplier, lower tariffs reduce the cost disadvantage previously facing U.S. exporters and create opportunities for additional purchases, particularly during seasonal periods when U.S. supplies become the most attractive origin.

The implications extend beyond soybeans. A more stable trade relationship and lower tariff environment could support purchases of other U.S. agricultural commodities, including corn, sorghum and potentially wheat, depending on domestic Chinese demand and relative pricing. For U.S. farmers, the key issue is not simply whether China buys American grain, but whether purchases occur at a pace large enough to materially tighten U.S. ending stocks and improve farm-level prices.

Markets will therefore be watching both USDA export sales data and any announcements from Chinese state-owned buyers. If China begins consistently booking around 1 MMT of U.S. soybeans per week, it would signal that the purchase commitments are translating into commercial activity. Such buying would provide an important source of demand support for the U.S. soybean market at a time when large global supplies and favorable South American production continue to cap upside price potential.

For now, the combination of reduced tariffs, improving trade relations and China’s sizeable import requirements creates a supportive backdrop for U.S. soybean exports. The next several weeks should provide a clearer indication of whether Beijing intends to maintain the buying pace necessary to meet its longer-term commitments, a development that could become one of the most important demand stories for the soybean market during the second half of the year.

—Fertilizer markets face long road back despite Strait of Hormuz reopening

Shipping resumption eases immediate supply fears, but production losses and logistics disruptions could linger for months

The reopening of the Strait of Hormuz may remove the most immediate threat to global fertilizer supplies, but industry leaders caution that the market disruption caused by the recent conflict is far from over. Corey Rosenbusch, president and CEO of The Fertilizer Institute (TFI), said restoring normal trade flows is not as simple as reopening a shipping lane. Global fertilizer supply chains depend on tightly coordinated vessel schedules, inventory management systems and production networks that were disrupted by weeks of uncertainty, elevated insurance costs and shipping delays.

Rosenbusch noted that there are several factors tempering immediate concerns. First, much of the Northern Hemisphere planting season, including in the United States, is already complete. As a result, fertilizer demand is not as urgent as it would have been during spring planting. In fact, some fertilizer prices have already retreated to pre-conflict levels in recent weeks despite the disruption, reflecting the seasonal slowdown in demand and expectations that trade routes will eventually normalize.

However, significant volumes of product remain trapped behind the strait. TFI estimates that between 3 million and 4 million metric tons of urea, one of the world’s most widely used nitrogen fertilizers, have been unable to move through the waterway. Yet Rosenbusch cautioned against assuming all of that volume will suddenly become new supply available to global buyers. Much of the product may already be committed to customers, particularly in major importing nations such as India, which relies heavily on Middle Eastern fertilizer supplies. Consequently, the reopening of shipping lanes may help fulfill existing contracts rather than create an immediate surplus capable of pushing prices sharply lower.

The bigger unknown may be the condition of energy and industrial infrastructure across the region. While attention has focused on shipping traffic, the extent of damage to oil, natural gas and fertilizer-related facilities remains unclear. Some facilities could require months to return to full operation, particularly if they suffered direct damage or face feedstock shortages. That issue extends beyond nitrogen fertilizer production. Sulfur, a critical raw material used in phosphate fertilizer manufacturing, is produced largely as a byproduct of oil refining and natural gas processing.

Any prolonged disruption in refinery operations could limit sulfur availability and continue constraining phosphate production around the world.

That sulfur connection highlights why fertilizer markets remain vulnerable even as tanker traffic resumes. Several phosphate producers have already curtailed output because of reduced sulfur supplies, tightening availability in a market that was already facing elevated production costs. The result is that reopening the Strait of Hormuz addresses only one part of the supply chain challenge. Production bottlenecks, raw material shortages and logistical disruptions could continue to influence fertilizer prices long after shipping volumes recover.

For farmers, the immediate threat of a severe fertilizer supply shock appears to be fading, but the industry is not yet returning to normal. Markets are moving from a crisis phase toward a recovery phase, and that transition could be uneven. Freight costs, war-risk insurance premiums, refinery operating rates and the pace of fertilizer plant restarts will all play important roles in determining whether recent price declines are sustained. While the reopening of Hormuz is a significant step forward, fertilizer markets are likely to remain sensitive to developments in the region for weeks and potentially months ahead.

—USDA nears rollout of disaster aid, loan rate changes and sugar program updates

OMB review complete, clearing the way for USDA to implement key farm safety net provisions

USDA appears to be on the verge of announcing a package of long-awaited farm program updates that will affect disaster assistance, commodity financing and sugar policy, following completion of a regulatory review by the Office of Management and Budget on June 18. The review covered USDA’s final rule implementing provisions tied to the Supplemental Disaster Relief Program (SDRP), Marketing Assistance Loans (MALs) and sugar program changes authorized under the One Big Beautiful Bill Act (OBBBA).

The completion of OMB review is often one of the final procedural hurdles before a rule is formally published and implemented, suggesting producers may soon receive greater clarity on how USDA intends to administer several important provisions approved by Congress. The rule had been under OMB review since May 15, meaning the administration moved through the process relatively quickly given the scope of the changes involved.

For many producers, the most immediate interest centers on the Supplemental Disaster Relief Program. SDRP has become a critical component of the federal farm safety net following a series of weather-related disasters, including drought, floods, hurricanes, excessive heat and other production losses that have affected large portions of U.S. agriculture in recent years. Farmers have been waiting for details on payment calculations, eligibility requirements and timing of assistance. With commodity prices under pressure and farm income projected to remain constrained across many sectors, disaster assistance remains an important source of liquidity for affected operations.

Note: When USDA announced the extension deadline for SDRP to Aug. 12, they said, “USDA is extending the program deadline to give producers and FSA more time to address any program application changes that could impact payments.” SDRP Stage 2 payments total over $13 billion, according to USDA. Remember that was when USDA also increased the payment factor to 70% vs the original 35%.

The Marketing Assistance Loan provisions could also carry significant implications. The OBBBA increased loan rates for several commodities, strengthening a traditional risk-management tool that allows producers to use harvested crops as collateral while delaying sales until market conditions improve. Higher loan rates effectively raise the level of price support available through the program and may provide additional financing flexibility during periods of weak commodity prices. For grain, cotton and oilseed producers facing narrow margins, the updated loan rates could modestly improve cash-flow opportunities heading into the next marketing year.

Changes to the sugar program are likely to draw close attention from both sugar producers and food manufacturers. Congressional supporters argued that adjustments were needed to reflect higher production costs and maintain program effectiveness, while critics have warned that stronger support levels could translate into higher domestic sugar prices. USDA’s implementation details will determine how those statutory changes are applied in practice and whether they materially alter market incentives for sugar beet and sugarcane producers.

The timing is notable because USDA has been under increasing pressure from farm groups and lawmakers to accelerate implementation of farm safety net enhancements approved by Congress. Producers making financing, marketing and acreage decisions for the 2026 crop year have sought certainty regarding the updated programs. The completion of OMB review signals that USDA’s regulatory work is largely complete, and attention now shifts to the agency’s formal announcement and publication of the final rule.

Beyond the immediate policy details, the forthcoming announcement will provide an early indication of how aggressively the administration intends to use the expanded authorities and funding provided under OBBBA. For producers facing continued margin pressure, the combination of disaster assistance, enhanced loan provisions and updated commodity support programs could offer a modest but meaningful strengthening of the federal farm safety net at a time when many sectors remain financially stressed.

—Oil markets ease as diplomacy offsets geopolitical risk premium

Progress in U.S./Iran talks helps cool crude rally despite ongoing Middle East tensions

Crude oil markets began the week with a familiar pattern that has characterized trading throughout the Middle East crisis: an initial surge driven by geopolitical headlines followed by a retreat as investors reassessed the likelihood of a major supply disruption. Brent crude briefly pushed higher before slipping back below $80 per barrel, reflecting growing confidence that diplomatic efforts between Washington and Tehran may prevent a broader energy shock.

The key development for traders was the announcement that U.S. and Iranian negotiators have reportedly agreed to a framework aimed at reaching a comprehensive agreement within 60 days. The roadmap, brokered with support from Qatar and Pakistan during talks in Switzerland, offers markets a potential path toward de-escalation after weeks of military confrontation and threats to critical energy infrastructure. While negotiations remain fragile and subject to political setbacks, the existence of a defined timeline has encouraged investors to reduce some of the risk premium that had been built into crude prices.

That optimism was tested almost immediately. President Donald Trump renewed warnings that the United States could launch additional military strikes if Hezbollah continues attacks against Israel and reiterated threats against Iran should it attempt to disrupt shipping through the Strait of Hormuz. Iranian media reports suggesting Tehran had suspended negotiations briefly reignited concerns that diplomacy could unravel. However, reports from individuals familiar with the talks indicated discussions remained active, helping calm market fears before they gained momentum.

Perhaps the most important signal for energy markets came not from political statements but from physical oil flows. Despite repeated warnings and conflicting rhetoric, millions of barrels of crude continued moving through the Strait of Hormuz over the weekend. The waterway remains the world’s most critical energy chokepoint, carrying roughly one-fifth of global petroleum consumption. As long as tankers continue transiting and export terminals remain operational, the market’s worst-case supply disruption scenario becomes increasingly difficult to justify.

Additional pressure on prices came from indications that Gulf producers are preparing to raise output. Countries across the Persian Gulf have strong incentives to reassure customers and stabilize global energy markets following weeks of uncertainty. Increased production capacity, combined with the reopening of shipping routes and continued exports, reduces the immediate threat of a sustained supply shortage.

The market’s reaction suggests traders are increasingly distinguishing between geopolitical rhetoric and actual disruptions to physical supply. While military risks remain elevated and negotiations could still fail, crude prices are signaling that investors now view a prolonged closure of Hormuz or a major interruption in Gulf exports as less likely than they did only a week ago. The result is a gradual erosion of the war premium that pushed Brent sharply higher during the height of the conflict.

Looking ahead, analysts say oil prices are likely to remain highly sensitive to developments in the Swiss negotiations. Any evidence that the 60-day roadmap is progressing could push Brent further away from recent highs. Conversely, a breakdown in talks, renewed military action involving Iran or Hezbollah, or any verified disruption to Hormuz shipping could quickly restore a significant geopolitical premium. For now, however, the market appears to be betting that diplomacy, rather than escalation, will be the dominant story driving crude prices in the weeks ahead.

—Brazil’s U.S. export exposure deepens as new tariff threats loom

Brazilian shipments to the United States have fallen to their lowest share in three decades, underscoring how U.S. trade policy is reshaping export flows and raising concerns about additional losses if new Section 301 tariffs are imposed

Brazilian exports to the United States have already suffered a significant setback following the tariff shock that began in mid-2025. Between August 2025 and May 2026, the U.S. accounted for just 9.3% of Brazil’s total exports, down from 12.4% a year earlier and the lowest share recorded since the current data series began in 1997. The decline affected 24 of Brazil’s 26 states and the Federal District, illustrating how broadly the tariff impact has spread across the Brazilian economy. 

While Brazil’s overall trade balance remains supported by strong oil exports and growing sales to Asia, particularly China, the U.S. market remains strategically important because it traditionally serves as a high-value destination and a benchmark for global competitiveness. The shift away from the U.S. therefore carries implications beyond simple trade volumes, affecting investment decisions, supply chains and long-term commercial relationships.

The next concern for Brazilian exporters is a proposed 25% country-specific tariff under Section 301, alongside another proposed surcharge tied to forced-labor compliance investigations. According to estimates cited in the report, if the measures are implemented and layered together, Brazil’s average effective tariff rate on exports to the U.S. could rise to 18.2%, nearly double current levels. Depending on the methodology used, between roughly one-fifth and nearly half of Brazil’s exports to the United States could be affected.

The consequences would vary sharply by sector. Machinery manufacturers, footwear producers, seafood exporters and wood-product suppliers appear among the most vulnerable industries. Many of these sectors depend heavily on the U.S. market and face challenges in quickly redirecting shipments elsewhere. Seafood exporters, for example, note that fish products are far more difficult to reroute than commodity products such as soybeans or beef because consumer preferences, product specifications and certifications differ widely across markets.

For U.S. agriculture and food markets, the story highlights a broader trend that has emerged throughout the Trump administration’s trade strategy: tariffs often redirect trade rather than eliminate it. Brazilian beef, for example, increasingly found alternative buyers in China after previous U.S. trade restrictions. Similar diversification could occur in other sectors if additional tariffs are imposed, potentially strengthening commercial ties between Brazil and Asian markets while reducing U.S. influence over supply chains it has historically helped shape.

The larger takeaway is that the first round of tariffs already produced measurable declines in Brazil/U.S. trade flows before the latest Section 301 proposals have even taken effect. If the new duties are finalized, the pressure could intensify on several export-oriented Brazilian industries while also increasing costs for U.S. importers and manufacturers that rely on Brazilian inputs. The outcome will be closely watched by commodity traders, agribusiness firms and multinational manufacturers because it offers another indication of how trade policy is increasingly influencing global sourcing decisions and reshaping trade relationships beyond traditional economic fundamentals.

— NWS outlook: Scattered heavy rainfall and severe weather possible today, stretching from the Northeast to the High Plains; unsettled weather continues in the Central U.S. through midweek… …First few days of summer to bring much above average temperatures across the West Coast, Great Basin, Southwest, Rockies and along the Gulf coast and Southeast; Cooler than average temperatures on tap for the Northern/Central Plains, Great Lakes and into the Northeast.

—Corn Belt faces wetter pattern and emerging heat risk

Heavy rains delay wheat harvest now, while hotter conditions loom for early July

The U.S. Corn Belt is entering a two-week weather pattern that remains broadly favorable for crop moisture needs but increasingly challenging for fieldwork and wheat harvest progress. Forecasts call for near- to above-normal precipitation across much of the region during the next 15 days, with the heaviest rainfall concentrated initially across eastern Corn Belt states such as Indiana and Ohio. Those areas are already dealing with saturated soils, localized ponding, and delays in the soft red winter wheat harvest, and additional rainfall is expected to worsen those issues in the near term.

During the next five days, repeated rounds of showers and thunderstorms are expected to reinforce moisture surpluses across eastern growing areas. While the moisture remains beneficial for corn and soybean development, excessive rainfall is becoming a concern in lower-lying fields where standing water can reduce plant vigor and complicate crop management activities. Wheat producers, meanwhile, face increasing quality and harvest-timing risks as wet conditions limit field access.

The weather pattern then shifts during the 6- to 10-day period as a western U.S. trough and eastern ridge develop. This setup is expected to push the most active thunderstorm corridor into the western Corn Belt and Northern Plains, bringing additional rainfall opportunities to areas stretching from Nebraska and the Dakotas into portions of Minnesota and Iowa. By the 11- to 15-day period, the atmosphere is forecast to transition into a classic northwest-flow regime, a pattern known for generating “ridge-rider” thunderstorm complexes that can produce widespread rainfall, strong winds, and localized flooding across the Midwest.

Temperature trends will be equally important. Week One will feature unusually cool conditions across much of the central United States, with readings running at least 5 degrees below normal in many locations. The cooler weather should reduce crop stress and support favorable pollination prospects for early-planted corn. However, forecasters expect a significant warming trend during Week Two. High temperatures across the Corn Belt are projected to rise into the upper 80s and low 90s, roughly 3 to 6 degrees above seasonal norms. The Southern Plains are expected to experience the most intense heat, with temperatures commonly reaching 95 to 105 degrees and running 5 to 7 degrees above normal.

For grain markets, the outlook remains largely non-threatening from a production standpoint. The combination of abundant soil moisture and the absence of widespread heat stress during the critical early reproductive stages of corn and soybeans continues to support favorable yield prospects. However, traders will closely monitor the transition to warmer temperatures and the development of northwest-flow storm systems, as any shift toward prolonged heat or excessive rainfall could quickly alter crop-condition expectations as July approaches.