Perspective: Morning Commentary for June 4

By: Arlan Suderman, Chief Commodities Economist

Thu, 04 Jun 2026, 13:21

Today's Perspective Video: China Holds the Soybean "Trump" Card, and What a Card It Is!

June 4 – Crude oil prices dropped along with Treasury yields after yet another ceasefire agreement was reached between Israel and Lebanon, raising hopes of a peace agreement with Iran. Yet, stocks are mixed this morning, with the Dow higher and the S&P and Nasdaq lower. The VIX is again trading near 16 this morning, while the dollar index fell back into its comfort zone near 99.2 following yesterday’s rally. Yields on 10-year Treasuries are trading near 4.46%, while yields on 2-year Treasuries are trading near 4.03%. WTI crude oil is trading near $93 per barrel, while Brent trades near $95 per barrel. Wheat prices again managed a modest bounce overnight, but corn and soybean prices saw more follow-through selling on their recent downward momentum, with July corn hitting new contract lows on favorable Midwest weather and emerging demand concerns.

Yet another ceasefire has been reached between Lebanon and Israel. But the problem is that Iran-backed Hezbollah is not part of the agreement. Hezbollah has been repeatedly hitting Israel, leading Israel to retaliate with strikes on Hezbollah inside of Lebanon where it operates. That leads Hezbollah to call for a ceasefire. One is reached, Israel retreats, and then Hezbollah strikes again, and the cycle continues. Iran has made protection of Hezbollah one of its demands for a ceasefire, even though it denied any connection to the organization for years. Yet, Iran is one of Hezbollah’s primary financers. Even so, President Trump continues to pressure Israel to show restraint in order to get a peace deal with Iran. The problem with Iran is that the appointed negotiators appear to want a peace deal, but the Revolutionary Guard that is actually running the country do not. It believes that it will do best if it simply holds out until after the U.S. midterm elections if it can afflict enough pain on the U.S. consumer via high energy prices. Thus, the Strait of Hormuz remains closed.

Yet, some oil is flowing. Recent data shows that some oil, and an occasional freighter, is moving through the Strait of Hormuz. Some ships are coordinating their passage through the Strait via cooperation with the Revolutionary Guard, which has set up an App for doing so. It’s believed that protection money is being paid in some cases for safe passage, while diplomatic negotiations with “friendly” countries provides safe passage for others. But the United States is also facilitating some of this very quietly, working with the government of Oman. Those ships are moving very close to the shore of Oman, where an Iranian attack would be more of an international incident. This represents less of an “in your face” approach by the U.S. Navy, which is reportedly escorting some of these ships. In all cases, transponders are being turned off during passage, but there’s been a observable reduction of ships stuck behind the Strait. The increased passages does not come close to erasing the energy deficit, but it does help for the time being. Nor do we see production being restored in the region, since there is little evidence of the ships returning to the region for another load – it’s simply too risky. Yet, it does free up those ships for doing commerce elsewhere.

First-time claims for unemployment benefits rose to 225K in the week ending May 30, up from a downwardly revised 212K the previous week, and above analyst expectations of 212K. The four-week moving average rose to 214.75K claims, up from 208.25K the previous week. Continuing claims for the week ending May 23 dropped by 8K to 1.777 million. The four-week moving average for continuing claims rose by 4,750 to 1.777 million as well. All of this was pretty much within the range where the numbers have been for some months. Yet, this morning’s Challenger Job Cut report showed that firms gave notice in May of possible future layoffs totaling 97,006. This doesn’t mean that layoffs will actually end up being that high, but it does indicate a significant increase in employee notices that may occur over the next couple of months, likely reflecting an increase in business uncertainty due to the war with Iran. Other data released this morning showed a surprising decrease in non-farm productivity in the first quarter to just a 0.3% annualized growth rate, down from an 0.8% increase in the prior quarter, and below expectations of 0.7%. However, unit labor costs still improved to just a 1.8% annualized increase, down from a 2.3% increase in the prior quarter and down from expectations that it would remain at 2.3% growth in costs.

USDA confirmed late on Wednesday that a New World Screwworm larvae had been positively identified on a calf in Texas – the first positive identification inside the United States since it was eradicated in 1966. In fact, it was pushed all the way down to Panama at that time, but it’s been rapidly making its way north again over the past two years. This does not reduce the safety of American beef. It should not reduce beef consumption or exports. Yet, it does raise costs for U.S. beef producers, who must spend more time and money on protecting their herds. It also raises the question over whether there is a reason for keeping the Mexican border closed any longer, now that the pest is already in the United States? That’s one reason why Feeder Cattle futures have been under pressure. The next question is, what restrictions might we see for animal movement within and out of Texas going forward?

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Perspective: Mid-Day Commentary for June 4

June 4 - The Dow surged to a new record high this morning, while the S&P and the Nasdaq have largely erased early losses as oil prices drop on Iran peace hopes, again. This comes despite Hezbollah's rejection of the Israel - Lebanon ceasefire agreement, resulting in Israel deciding not to withdraw from occupied areas of Lebanon. Even so, the VIX is back below 16 at midday, while the dollar index trades near 99.3. Yields on 10-year Treasuries are trading near 4.46%, while yields on 2-year Treasuries trade near 4.05%. WTI crude oil is currently near $93 per barrel, while Brent trades near $95 per barrel. Massive seasonal and chart-related liquidation continues in the grain and oilseed sector; even spreading to the edible oils markets that had been previously holding strong due to the nation's biofuel program that needs them.

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