Morning Weather Report 6-8
Morning Weather Report - U.S. forecasts for week-ahead
Matt Zeller
- Grains & Oilseeds
CBOT Grains Daily Options Report
By: PJ Quaid, Senior VP, Agricultural Commodities
Today is day 2 of 5 for the Goldman roll. The sept 480/500 call spread buy in corn was rolling down a long.
A second confirmed New World screwworm case in a Texas calf keeps animal-health risk front and center for the cattle market. Officials still appear focused on containment, but any additional cases in Texas matter because the U.S. cattle herd is already tight and the market is highly sensitive to disruptions in animal movement, border trade, or slaughter flow. This is not a food-safety issue, but it does add uncertainty around cattle supply and could help support cattle and beef prices until surveillance confirms the situation is under control.
The 2-year/10-year Treasury spread narrowing to 39 basis points suggests the yield curve is becoming less steep, with the front end holding firmer relative to the long end. For markets, that usually points to less confidence in aggressive Fed easing, especially with stronger labor data and sticky inflation still in the background. A 39 bp spread is not an outright stress signal by itself, but the direction matters: if the curve keeps flattening, it can tighten financial conditions and weigh on rate-sensitive assets, while reinforcing the idea that the Fed may need to stay patient before cutting rates.
The U.S. is pushing for tougher auto rules in trade talks with Mexico, aimed at keeping Chinese parts from entering the North American supply chain through Mexican-assembled vehicles. The proposal would raise regional content requirements and potentially require a larger share of each vehicle to be made in the U.S., especially for electronics, batteries, wiring, and other components tied to China. The goal is to prevent Mexico from becoming a tariff workaround for Chinese manufacturers, but the risk is higher production costs, more supply-chain friction, and added uncertainty for automakers as the USMCA review approaches.
Fed Governor Barr warned that the recent easing of bank regulations has weakened oversight of U.S. lenders and could raise financial-stability risks if credit conditions deteriorate. Separately, the stronger labor-market backdrop makes the Fed’s job more difficult, because resilient employment reduces the case for quick rate cuts while inflation and long-end bond yields remain a concern. The customer-facing takeaway is that the Fed may have less flexibility to ease policy aggressively, even as political pressure for lower rates remains high. For markets, that keeps rate volatility elevated and leaves risk assets sensitive to each new inflation, jobs, and credit-quality signal.
Chinese President Xi used his latest remarks to again frame China as a supporter of multilateral trade, inclusive globalization, and a more balanced global economic order. At the same time, his call to resist “hegemonism” and any revival of militarism was a clear pushback against U.S.-led influence and rising security blocs. For markets, the message does not change policy overnight, but it reinforces the bigger theme: global trade is becoming more fragmented, with China trying to build support among countries looking for alternatives to the Western-led system.
The PBoC extended its official gold-buying streak to a 19th consecutive month, adding 320,000 troy ounces in May. The move reinforces the broader theme of central banks diversifying reserves away from heavy dollar exposure and continuing to build gold holdings despite elevated prices. While the purchase size was not especially large, the consistency matters: China is still signaling long-term demand for gold as a reserve asset, which should remain a supportive underlying factor for the market even when short-term price action is driven by rates, the dollar, and risk sentiment.
OPEC+ agreed to another modest 188,000 barrel-per-day quota increase for July, but the move looks more symbolic than market-changing. The group is continuing to slowly unwind prior cuts while trying not to flood the market or pressure crude too aggressively. In practical terms, the headline supply increase may overstate the real impact because several members have struggled to hit their existing targets, and the market is still balancing OPEC+ discipline against uncertain demand, geopolitical risk, and broader macro pressure. For now, it leans mildly bearish on crude sentiment, but it is not a major supply shock by itself.
Overnight ag option trade
Corn
B 1600 q 440/410 ps 12 ¼ to 12 5/8
S 500 q 430 c 14 5/8 to 14 3/8
B 150 z 475 c 15 5/8 vs 445
B 200 n 445 c 2 1/8
S 200 n 440/420 ps 15
S 300 z 450 p 28 1/8 to 27 1/8
S 200 z 500 p 62 5/8
B 500 u 460/500 cs 5 1/8
B 500 q 460/510 cs 4 3/8
B 300 n 430 c vs s 600 n 445 c ¾ db
Beans
S 750 q 1120 p 27
B 1000 n 1190/1120 ps 55 1/8 to 56 1/2
B 200 x 1250 c 16 1/8 to 16 1/4
S 1000 n 1120 p 17 1/2
Wheat
B 200 u 545/515 ps 5 3/8
Open interest changes
Corn
Sept 480/500 call spread buy and sept 450/500 call spread buys were rolling longs...aug 440 call buy, march 530/630 1x2 call spreads buy and sept 430 put buys were new.
Beans
July 1130 call buy was new...july 1170 call buy was closing....july 1140/1180 call spread buy was rolling a long.
Soymeal
July 300 put buy was new
Bean oil
Sept 7750/85 call spread buy, july 7250 put buy and aug 78/81 call spread buys were new....july 75 call sale and july 76 put buys were closing
Cvol
Ags 21.35% up .24%
Corn 27.32% up 2.01%
Beans 16.69% down .33%
Soymeal 20.54% down .18%
Bean oil 27.43% up 1.16%
Wheat 26.72% down .17%
Feeder cattle 17.47% down .73%
Live cattle 16.77% down 1.00%
Lean hogs 23.67% up .56%
Class 3 milk 19.17% up .15%
Corn
Beans
Soymeal
Bean oil
Wheat
Kc wheat
Miax wheat
Oats
Rough rice
Canola
Cotton
Feeder cattle
Live cattle
Lean hogs
- Grains & Oilseeds
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