Perspective: Morning Commentary for June 1

By: Arlan Suderman, Chief Commodities Economist

Mon, 01 Jun 2026, 13:37

Today's Perspective Video: Deal or Ultimatum for Iran?

June 1 – Stock futures are poised for another potential record day on Wall Street. Investors focused on solid earnings and economic data amid the ongoing stalemate between Iran and the United States. The VIX traded near 16 again overnight, while the dollar index is trading near 99.1 – locked in a sideways trading range that has contained it for much of the past year. Yields on 10-year Treasuries are trading near 4.50%, while yields on 2-year Treasuries are trading near 4.07%. WTI crude oil rallied to trade near $92 per barrel, while Brent trades near $95 per barrel. The grain and oilseed markets firmed with crude oil as Iran reportedly cut off messaging with the US.

The United States struck Iranian air defenses over the weekend, along with a ground control station and two more drones that were apparently targeting ships in the Strait of Hormuz. Kuwait activated its air defense system today to stop Iranian missiles and drones that were apparently targeting U.S. assets there. The two sides remain in a quasi-ceasefire, but military incidents are slowly increasing between the two. Meanwhile, the Strait of Hormuz remains largely closed. Some ships are being allowed to pass, but the total is a small fraction of what is needed, leading to continued growth of the global deficit of energy and fertilizer. The fertilizer issue is more of a 2027 crop issue, while the energy issue is a current one, and likely to get worse before getting better, even if the Strait were to reopen today. Iran refuses to budge on the nuclear issue, as does the United States. Iran also insists on maintaining control of the Strait of Hormuz, which is a non-starter with much of the rest of the world. Iran lacks a navy to block the Strait, but it still maintains enough of a missile and drone inventory to create terror in the Strait that effectively keeps it closed. The United States takes out launching pads when Iran strikes, but it has not yet been able to eliminate Iran’s ability to create fear among shippers – effectively keeping the Strait closed. Iran knows that America doesn’t likely have the stomach to put troops on the ground to totally eliminate the threat, so the standoff continues, adding to the global economic pain. We’re getting close enough now to the U.S. November midterm elections that Iran may try to delay things until then.

China’s 15^th Fourth Plenum Meeting was held in October, at which time I described it as a Strategic Planning Meeting of the top leadership of the Communist Party. However, I stated that we’d have to wait until spring to see any details coming out of the four-day meeting. Those details are slowly emerging. One of those is a plan for a massive urban renewal campaign over the coming five years. The plan devotes between 15 to 20 trillion yuan ($2.2 - $2.9 trillion) over the five-year period to aid the recovery of struggling construction firms and property developers. It will include 200,000 kilometers of gas pipelines, 175,000 km of drainage pipes, and similar amount of water supply pipelines by 2030. It takes money to do all of this, and tax revenues are struggling amid the multi-year property slump in China. Authorities hope this will help turn the property market around, although that will be a challenge in a declining population environment. Yet, a large part of China’s economy is dependent on the property market.

The two-week outlook holds generally favorable weather for China’s crops. Increasing showers are seen for previously dry areas where corn and soybeans are grown, while previously wet areas of China’s wheat belt dry out to favor active harvest progress. We still see little evidence of China buying U.S. Ag commodities for the coming year. China committed to importing 25 million metric tons of U.S. soybeans in the next “season,” which we interpret to mean the next marketing year. They’re going to need to start buying soon if they’re going to reach that objective, but I never thought that would be a reality. USDA’s 2026-27 marketing year soybean balance sheet seems to have 15 mmt of Chinese imports factored in at this time. China also committed in May to another $17 billion in other Ag commodity purchases in the next year, and we still see little to no evidence that it has began to fulfill that commitment either. There’s still time of course, but the market is giving up on seeing that demand show up.

That leaves us vulnerable to slipping into seasonal patterns. Headlines from the war are losing their impact on the grain and oilseeds amid the ongoing stalemate. It’s the month of June now, and crop condition scores for this year’s corn and soybean crops will increasingly be a factor. The first ratings of the year are expected to be relatively good for the nation’s crops overall. Wheat has a short crop this year, but cheaper Black Sea wheat is already rationing demand for U.S. wheat in Western Hemisphere markets. It’s going to be difficult to rally wheat without some semblance of strength in corn prices. Seasonally, traders tend to give up on corn once we get into late June if crop ratings are good and new-crop ending stocks are projected to be above 10% of expected use. The same is true for soybeans when new-crop ending stocks are projected to be above 5%. USDA currently projects new-crop corn stocks at 12.1% of usage, with soybean stocks at 6.9%. A surge in buying from China could change that, but the market will go with USDA’s numbers until / unless they see significant buying from China.

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Perspective: Morning Commentary for July 17

July 17 – Chip stocks are again under pressure amid concerns about whether AI investments will meet expectations, leading to a roughly 2% selloff in Nasdaq futures this morning. The VIX elevated to a nine-day high above 19 this morning, while the dollar index traded near 100.9. Yields on 10-year Treasuries traded near 4.53%, while yields on 2-year Treasuries trade near 4.14%. WTI crude oil pushed higher to trade near $82 per barrel, while Brent traded near $87 per barrel. The grain and oilseed markets were mostly higher again overnight as Black Sea risks increase amid rising domestic and global demand prospects.

Arlan SudermanFri, 17 Jul 2026, 13:35

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Editorial TeamFri, 17 Jul 2026, 08:06

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Growing biofuel demand is becoming one of the strongest structural supports for soybean prices, even as global supplies remain historically abundant. Rising crushing demand in both the United States and Brazil is shifting the market's focus from record harvests to the longer-term balance between energy policy and agricultural production.

Editorial TeamThu, 16 Jul 2026, 15:22

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