The June 18 USDA Cattle on Feed report is expected to show a tighter near-term supply setup, with May placements estimated at only 94.5% of last year and May marketings at 89.4%. The lower placement number is supportive deferred live cattle, as fewer cattle entered feedlots during May, while the very low marketing pace reflects tight front-end supplies and slower turnover. On-feed June 1 is estimated at 102.5% of last year, or roughly 11.729 million head, so total feedlot inventories remain above year-ago levels, but the key market focus will be whether placements come in below expectations. A placement number under the average estimate would likely be supportive cattle futures, while anything near the high end of the range could pressure the deferred contracts.
The Treasury curve has bear-flattened sharply, with the 2s10s spread narrowing to roughly 28.5 basis points, the tightest level in the past year. The move reflects a market repricing toward stickier inflation, higher energy risk tied to the Middle East, and a more hawkish Fed outlook after the latest FOMC meeting. For agriculture, the macro setup is a near-term headwind: higher short-end rates and a firmer dollar can pressure U.S. export competitiveness, especially in wheat and soybeans, while tighter financial conditions can weigh on demand. Corn has some offset from ethanol when energy prices are elevated, but recent oil weakness and biofuel policy uncertainty limit that support. Overall, traditional ag fundamentals such as weather, crop conditions, exports, and crush margins remain the main drivers, but the flatter curve adds another layer of volatility and suggests clients should keep a close eye on the U.S. dollar, crude oil, and Fed messaging over the next several weeks.
Trump’s latest comments add more uncertainty around North American trade policy, particularly ahead of the July 1 USMCA review. While his comments on Chinese cars point to continued protectionist pressure around foreign manufacturing, the bigger market issue is his statement that the U.S. would be better off without USMCA and may prefer leaving it unsigned. For agriculture, this matters because Mexico and Canada remain critical buyers of U.S. grain, livestock, ethanol, and food products, so any threat to the agreement raises headline risk around export demand and cross-border logistics. The agreement would not disappear overnight, but failure to renew would create a longer period of uncertainty that could weigh on confidence across agriculture, autos, and broader North American supply chains.
The Fed held rates steady at 3.50–3.75% in a unanimous 12-0 vote, but the tone was meaningfully hawkish as the Committee removed forward guidance and emphasized that inflation remains too high. The updated projections showed a clear shift higher in the expected rate path, with 9 officials now looking for a rate hike this year and the 2026 fed funds projection moving up to 3.8% from 3.4% previously. Chair Warsh reinforced that message, repeatedly saying the Fed will deliver price stability and that policy decisions will be made meeting-by-meeting rather than guided by prior language. He also downplayed the usefulness of the dot plot, noting he did not submit a dot himself, while announcing a broader review of Fed communications, the balance sheet, data use, productivity, labor markets, and the inflation framework. Overall, the meeting leaned restrictive: no immediate hike, but no signal of cuts either, and the Fed is clearly keeping the door open to tighter policy if inflation and energy-driven supply shocks remain persistent.
Overnight ag option activity
Corn
B 500 n 420 p 7 3/4
B 1500 n 410 p 3 to 3 1/4
B 1000 n 415 p 5 1/8 to 5 3/8
B 100 u 430/460 cs 8 7/8
B 100 sd q 470/490 cs 4
Beans
S 1000 x 1060 p 12 3/8 to 12
B 500 n 1120 c 16
S 500 q 1160 c 16 1/2
B 500 x 1160 c 40 to 43
S 500 n 1140 c 5 ¼ to 5
B 100 x 1320/1420 cs 5 1/4
S 200 q 1200 c 6 1/4
S 200 x 1340 c 7 ¾ to 7 5/8
B 200 n27 1220 c 50 1/2
Bean oil
B 400 q 73 c .720 to .785
B 200 n 70/68 ps .650
B 500 z 64 p 3.000
B 1000 n 75 c .100
B 150 z 6350 p 2.595 vs 6674
Open interest changes
Corn
March 560 call buy, sept 500 call buy, sept 400p/500c strangle buy, aug 485 call sale and sept 480 call sales were closing....sept 400/370 put spread buy vs sale of sept 460 call, dec 500 call buy and short aug 470 call buys were new...
Beans
Aug 1100 put sale and nov 1250/1350 call spread buys were new.....july 1100 put buy was closing.
Soymeal
July 300 put buy was closing.
Bean oil
Aug 71 call buy and sept 67 put buys were new. July 70 put sale and sept 72/80 call spread sales were closing.
Wheat
July 620 call buy and july 650 call sales were new.
Kc wheat
July 630 and 640 call buys were closing.
Lean hogs
Dec 72p/80c strangle sale was closing. Feb 72p/82c strangle buy was new
Cvol
Ags 23.42% up .94% (1 month high)
Corn 34.39% up 2.98% (1 year high)
Beans 20.71% up .44% (1 month high)
Soymeal 23.27% down .26%
Bean oil 25.72% down .57%
Wheat 32.30% up 2.85%
Feeder cattle 14.27% up .05%
Live cattle 14.97% down .33% (6 month low)
Lean hogs 22.10% down .48%
Class 3 milk 19.73% up .61%
Corn
Beans
Soymeal
Bean oil
Wheat
Kc wheat
Miax wheat
Oats
Rough rice
Cotton
Canola
Feeder cattle
Live cattle
Lean hogs
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