Perspective: Mid-Day Commentary for June 2

By: Arlan Suderman, Chief Commodities Economist

Tue, 02 Jun 2026, 17:33

June 2 - Stocks opened in negative territory today, before rallying back into the green heading into midday despite firming crude oil prices. The VIX continues to trade near 16 at midday, while the dollar index trades near 99.2 - both trading like a broken record of late. Yields on 10-year Treasuries are trading near 4.46%, while yields on 2-year Treasuries are trading near 4.04%. WTI crude oil is near $94 at midday, while Brent trades near $96 per barrel. The grain and oilseed markets are mostly in the red at midday, with double-digit losses in soybeans and in the hard wheat markets. Notable chart damage is seen in some of these markets, adding to the losses as the Algos trade those signals and the resulting changes in momentum.

Russia pounded Ukraine overnight with hundreds of drones and dozens of missiles. Ukraine put the count at 73 incoming missiles and over 600 drones in what was the third heavy attack on Ukraine's capital in less than a month, whereas Dnipro was also a target in the latest strike. For it's part, Ukraine has been gaining increasing effectiveness at striking Russia's energy infrastructure, reducing its ability to export crude oil as well as diesel fuel, further adding to the global deficit. The Russian war on Ukraine would be getting significant attention if not for the focus on the Iran war currently. Yet, it is still very much headline worthy, and it is definitely contributing to the global energy story, as well as fertilizer as some fertilizer infrastructure has been impacted as well.

USDA released its first condition ratings for the U.S. corn crop on Monday afternoon, along with the same for the U.S. soybean and spring wheat crops. The corn crop had a condition index score to start the summer growing season of 371, as seen below. That's down very modestly from a 375 in this same week last year, and down from the 10-year average for the week of 377. So, what do we make of that? Not much. The graphic below shows the condition index scores for this week of the year for the past four decades that USDA has been issuing crop ratings. The graphic also shows final yields for each of those years, with the exception of this year's yield that is a forecast from USDA. It shows that the correlation between June crop ratings and final yield is relatively low. That correlation becomes much more significant by August. A breakdown of the data shows that we have some problem areas in the Eastern Midwest, as well as in the Plains, but the crop as a whole is in pretty good shape. The weather pattern is shifting this week, allowing previously wet areas to dry out a bit, while previously dry areas see some rain. A similar story is seen for soybeans, although an argument can be made that the soybean crop is in slightly better condition.

Regardless, these ratings in the context of this week's forecast leaves little for market bulls to hang their hat on. Prices are well off their winter lows, largely due to the Iran war and to the U.S. biofuel program, and we're turning the calendar to June. This is the time of year when fund managers generally look for weather problems. They'll tend to short the grain and oilseeds if they fail to see a story if the data shows that the crops are doing well for the following year. Put this into the context of the equities making new record highs this year, while the grains see chart damage, and it's easy to see why we see a rotation of the money flow. The next headline could reverse that tendency, but for today the path of least resistance is lower, and low enough to start reshaping the charts. Meanwhile, weather forecasts will increasingly be a factor over the next 60 - 90 days. Key areas to watch in an El Nino year would be possible deepening dryness in the Northern Plains and Canadian Prairies.

Grains & Oilseeds

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