By: Mike Castle, Market Intelligence - Fertilizer Analyst
June 18 – The rebound on Wall Street continues at midday, with the Nasdaq up 2.2%, S&P 500 up 1.0%, and Dow Jones up 0.3% at the time of writing. The VIX has fallen in turn, falling back to trade around 16.9 at midday after pushing as high as 18.8 yesterday. The dollar is adding to yesterday's gains, setting a fresh 13-month high around 100.8 earlier in the session and hanging just below that level at the time of writing. Treasuries are mixed on the day, with 10-year yields now just below unchanged as they hover near 4.443% and 2-year yields just above unchanged as they trade at 4.164%. Crude oil is continuing its decline in the wake of the MOU between the U.S. and Iran, with nearby WTI making a fresh low since early March at $74/barrel and nearby Brent doing the same as it trades around $77.85/barrel. That selling pressure continues to spill over to the broader commodity sector, with the ags mostly in the red at midday, save for some small gains in nearby feeder cattle futures.
The U.S. manufacturing sector showed more signs of strength in this morning’s release from the Philadelphia Fed, with their June Manufacturing Index rebounding to 10.3, slightly above the expected 10.0 and sharply above April’s dip return to contraction at a -0.4 reading. 2026 has been the best year for the manufacturing sector in the Philadelphia Fed’s district since 2022, with five of the first six months showing expansionary readings. Perhaps even more encouraging was the impressive rebound in the Employment subindex, rising back to 7.9 in June from the -2.8 seen in May and 10-month low of -5.1 in April. While the Business Conditions subindex did fall slightly to 50.2 in June versus the 53.2 seen in May, it’s worth pointing out that May’s figure was the highest seen since November 2024. Furthermore, the New Orders subindex jumped to 27.3 in June, a significant rebound from -1.7 in May. This would be the second strongest month of new orders seen in this data since the beginning of 2025.
The less rosy takeaway from this morning’s data, however, was the resurgence of inflationary pressures, with the Prices Paid subindex (essentially tracking manufacturers’ input costs) rising to 53.2 in June from the 47.9 seen in May. This is the second-highest reading seen thus far in 2026, trailing only the eight-month high of 59.3 made in April and signaling additional cost pressures in the pipeline moving forward. Coupling the picture of a strengthening labor market and rising inflation combines to feed the hawks, especially following the release of yesterday’s dot plot, continuing to shift rate expectations higher. Per CME’s FedWatch, odds of a cut by the end of 2026 have disappeared entirely, with the highest odds being put on one 25-basis point hike, but two hikes not far behind. This will likely continue to be front and center for the markets for the remainder of the year.
Weekly old crop (‘25/’26) soybean export sales unexpectedly rose to a 10-week high in this morning’s Export Sales report for the week ending June 11, coming in at 15.6 million bushels, above even the top-end trade estimate of 11.0 million. Egypt was the featured destination there, accounting for nearly half of the total, with Mexico, Indonesia, and Japan making up much of the remainder. New crop (‘26/’27) export sales were strong as well at 11.2 million bushels, the largest for the comparable week since 2022. Unknown destinations were the bulk of this total, which keeps the rumor mill of Chinese business buzzing, especially in the wake of this morning’s flash sale announcement but doubts still remain. Given that November ’26 soybean futures are currently trading ~$0.70/bushel lower than their recent high made roughly a month ago, this may very well be other buyers stepping in to take advantage of the break.
Demand for U.S. corn exports remains red hot, with old crop (‘25/’26) sales coming in at 45.6 million bushels, the largest for the comparable week in 20 years, as shown in the accompanying graphic. Spain, Mexico, and Japan were the featured destinations. As with soybeans, this week’s new crop (‘26/’27) corn sales were very strong as well, coming in at 20.4 million bushels, a dip from the 36.5 million bushels in the week prior but still nearly quadruple the previous five-year average for the comparable week. All wheat export sales for the current (‘26/’27) marketing year came in at 14.7 million bushels, in line with expectations, with Japan the featured buyer.
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China committed to buy 25 million metric tons of US soybeans in the 2026-27 marketing year, but official forecasts and market skepticism suggest the actual figure could be 10 million tons lower. The gap between political commitment and commercial follow-through is now shaping how grain traders read every incoming export sale.
June 18 – The rebound on Wall Street continues at midday, with the Nasdaq up 2.2%, S&P 500 up 1.0%, and Dow Jones up 0.3% at the time of writing. The VIX has fallen in turn, falling back to trade around 16.9 at midday after pushing as high as 18.8 yesterday. The dollar is adding to yesterday's gains, setting a fresh 13-month high around 100.8 earlier in the session and hanging just below that level at the time of writing. Treasuries are mixed on the day, with 10-year yields now just below unchanged as they hover near 4.443% and 2-year yields just above unchanged as they trade at 4.164%. Crude oil is continuing its decline in the wake of the MOU between the U.S. and Iran, with nearby WTI making a fresh low since early March at $74/barrel and nearby Brent doing the same as it trades around $77.85/barrel. That selling pressure continues to spill over to the broader commodity sector, with the ags mostly in the red at midday, save for some small gains in nearby feeder cattle futures.
June 18 – Stock futures pushed higher early this morning as investors weighed prospects for the Strait of Hormuz reopening against a more hawkish Federal Reserve. The VIX remained slightly elevated near 17 this morning, although that is below yesterday’s high near 19. The dollar index however continues to push higher to fresh one-year highs near 100.7. Yields on 10-year Treasuries are trading near 4.45%, while yields on 2-year Treasuries are trading near 4.18%, after pushing to fresh 16-month highs on Wednesday. The yield curve continues to flatten amid rising inflation risks. Yet, WTI crude oil put in a fresh three-month low this morning near $74 per barrel. The grain and oilseed markets tried to push higher overnight, but then they came under pressure in the early morning hours today. The markets are closed for Juneteenth Day tomorrow.
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