WASDE this morning.
Today’s USTR comment deadline is an important step in the U.S.-China Board of Trade process, but it does not change tariffs immediately. The comment period is meant to help USTR decide which “non-sensitive” goods, including agricultural products, should be eligible for reciprocal tariff reductions between the U.S. and China. For grain and oilseed markets, the focus is whether soybeans, corn, sorghum, ethanol, meat, dairy, and related ag products are prioritized for relief. The market read is that this creates bullish optionality for U.S. ag exports later this summer, especially if tariff reductions make U.S. origin more competitive for Chinese buyers, but the actual impact depends on which products are selected and how quickly USTR and China follow through.
CENTCOM is pushing back hard against Iran’s messaging that Tehran controls transit through the Strait of Hormuz. The U.S. position is that Hormuz remains an international trade corridor, with U.S. forces actively supporting freedom of navigation. CENTCOM said U.S. forces have helped facilitate the movement of more than 800 commercial vessels and 380 million barrels of crude oil through the Strait since early May, directly challenging Iranian claims that ships must use Iran-designated routes. The market read is that the U.S. is trying to cap the geopolitical risk premium by signaling that energy flows are still moving, even though the Strait remains a high-risk chokepoint and any successful disruption would immediately matter for crude, refined products, freight, and insurance costs.
The White House chose a negotiation-first approach on commercial aircraft, jet engines, and related parts. Commerce found that the level and structure of these imports could threaten U.S. national security, citing foreign supply-chain reliance, quality-control risks, counterfeit parts, and pressure on the domestic aerospace manufacturing base. However, the administration will not impose immediate Section 232 tariffs. Instead, Commerce and USTR have been directed to negotiate with trading partners and report back within 180 days, while the White House keeps future tariff action on the table if talks fail or imports continue to pose a risk. For markets, this is less of an immediate tariff shock and more of a warning shot: aviation supply chains avoid near-term disruption, but aircraft and engine trade now remains under active policy review.
The IEA is framing 2026 as a rare oil-demand contraction year, with global demand expected to fall by roughly 1.0–1.1 million bpd, the first annual decline since the Covid period, as the Iran war and disruption around the Strait of Hormuz hit Middle East production, exports, refinery operations, freight flows, and end-user consumption. The key nuance is that this is not a normal recession-style demand slowdown; the IEA says the decline is heavily skewed by region and product, with the Gulf disruption forcing supply rationing, higher transport and insurance costs, and weaker availability of crude and refined products in certain markets. For oil prices, the headline is mixed: lower demand is bearish on paper, but the cause is a major supply-chain shock, so the market may keep a risk premium in crude, diesel, jet fuel, freight, and insurance as long as Hormuz flows remain vulnerable.
The 30-year Treasury auction clearing at 5.058% is a clear warning sign from the long end of the bond market. It marks another move above the 5% threshold after May’s 30-year auction cleared at 5.046%, which was described as the first 30-year auction above 5% since 2007. The market was already pressuring long bonds ahead of the sale, with the 30-year yield near 5.09% and investors focused on whether demand would hold for a 22 billion auction amid geopolitical risk, inflation concerns, and rising U.S. borrowing needs. The market read is that buyers are demanding more compensation to own long-duration U.S. debt, which tightens financial conditions, raises mortgage and corporate borrowing costs, and keeps pressure on equity valuations if long-end yields stay elevated.
The Fed is launching a broad outside review of how it conducts monetary policy, creating five task forces focused on communications, balance-sheet policy, data quality, productivity/jobs, and inflation frameworks. The groups will be co-led by external economists, business leaders, and former central bankers, with Fed staff support, and are meant to give the FOMC independent recommendations on whether the Fed’s tools, messaging, inflation analysis, and balance-sheet regime need to be modernized. The market read is that this is not an immediate rate-policy signal, but it is meaningful structurally: Chair Warsh is putting the Fed’s operating framework under review, including how it talks to markets, manages its balance sheet, interprets inflation, and incorporates AI-driven productivity changes into policy decisions.
Overnight option activity
Corn
B 2000 w2 new crop 460 calls ¾ to 1 1/8
B 200 v 500 c 5 5/8
B 500 z 550 c 3 1/8
Beans
B 500 x 1200/1300 cs 10 ½ to 10 3/4
B 150 q 1150 p 5 1/4
B 3000 x 1300 c 10 ½ to 11 1/4
B 200 x 1300/1380 cs 5 1/4
S 1000 x 1180 p 41
B 500 x 1120 p 14
B 300 x 1240 c 18 ¾ to 18 7/8
Wheat
B 500 u 675/785 cs 6 7/8
Open interest changes
Corn
Aug 410 put sale and dec 500 call sales were new. Sept 460 call buy was closing. Aug 440/450 call spread buy and dec27 450/600 call spread buys were rolling longs.
Beans
Nov 1200 put sale, short aug 1184 straddle sales and w3 1200/1220 call spread buys were new.
Soymeal
Aug 320 call buy and aug 300 put buys are closing.
Bean oil
Dec 64 put buys are closing.
Wheat
Dec 700 call buys were new
Lean hogs
Aug 96/90 put spread buy was closing. Oct 100 call sales were closing
Cvol
Ags 21.46% down.56%
Corn 27.20% down 1.99%
Beans 18.03% down 1.56%
Soymeal 22.84% up .84%
Bean oil 24.32% down 1.32%
Wheat 32.07% up 1.47%
Feeder cattle 15.88% up .49%
Live cattle 15.84% up .79%
Lean hogs 22.76% up .38%
Class 3 milk 22.83% up 1.32%
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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