The big news in the livestock complex has been the reopening of the U.S./Mexico border for live animal trade. The first opening with be at Douglas, Ariz., in 30 days for animals at least 1 year old. Following this, there will be other ports opening in a staggered format. Mexico will still be closely monitored as not all regions of the country are showing the same efforts in containing New World Screwworm. The USDA has also stated that the opening for feeder cattle imports may be halted if cases build.

Retail energy values across the United States have started to rebound as fighting between the U.S. and Iran escalates. The average retail cost of U.S. gasoline is now $4.02 a gallon, up 16 cents in the past week. Retail diesel fuel is now $5.10 per gallon, up 23 cents in the last week. Prior to the start of the U.S./Iran war, these averages were $2.98 on gasoline and $3.70 on diesel. These rising costs will again cause U.S. inflation to appreciate as well, and increases the odds of future interest rate hikes.

The United States has seen demand for its beef decline recently from elevated costs, and now the same is being seen in Brazil. Export demand for Brazilian beef declined 10 percent in July 2026 from 2025, the first year to year decrease in beef demand since January 2025. Brazil’s year-to-date beef exports are still record large for 2026 at 1.8 million tons. Of this, 775,000 tons have been sold to China.

Brazil is the latest country to reach its import quota on Chinese beef trade. Brazil’s beef sales to China have topped 80 percent of the agreed total and are closing in on 100 percent. Any trade above this set quota will face a 55 percent tariff. China’s YTD beef imports total 1.8 million metric tons, a 17.5 percent increase from 2025. A shift in diets to contain more beef is behind this demand growth and is the same reason for the decline in China’s pork consumption.

An interesting development is starting to take place in the Argentine beef market. Argentine ranchers are feeding cattle to elevated weights, same as in the U.S. The average weight of Argentine beef is now 1,200 pounds, still well below the 1,448 average in the United Sates. Argentine beef production has increased as a result, as has its beef exports. Argentina has exported 271,000 mt of beef this year, up 8 percent from last year. Argentine officials believe that Argentine beef exports will increase by 50 percent over the next four years. A large portion of these exports are destined for the U.S. to make up for our low cattle herd.

Chinese officials reported June soybean imports of 13.5 mmt, an all-time record for the month. Of these imports, 12.08 mmt were sourced from Brazil, an increase of 13.7 percent from last year. China sourced 1.27 mmt of soybeans from the United States in June, a year-to-year decline of 20.6 percent. Year-to-date Chinese imports from Brazil now stand at 34.75 mmt, an increase of 9.1 percent from last year’s pace at this time. China’s import of U.S. soybeans for the calendar year is down 42.4 percent from last year at 9.3 mmt. China has started to increase its U.S. soybean purchases, and this spread will start to narrow as a result.

More analysts have started to release estimates for the 2026/27 Brazilian soybean crop, and most are indicating a smaller crop. Rabobank is predicting a 2026/27 Brazil soybean crop of 178 mmt, 4 mmt fewer soybeans than Brazil produced last year. Rabobank is predicting a steady planted acreage from last year and a return to normal yields given the current El Nino system being in place.

The analytical firm Safras has updated its 2026/27 Brazil crop estimates with different results. Safras is now predicting a Brazil soybean crop of 180.1 mmt, up from last year’s 178.3 mmt. This is mainly from an increase of 1.2 percent to acreage, putting total plantings at 122.28 million acres. Brazil’s corn production for next year is estimated at 144.96 mmt, up from the 140.37 mmt predicted for this year. Sources in Brazil are cautious of large production estimates as they feel the strong El Nino will impact yields.

An interesting situation is starting to develop in Russia. The country has seen its fuel supply impacted by its war with Ukraine, and now its diesel supply is very low. This has raised concerns that the country may not have enough diesel for its harvest season, even though the country’s Ag Minister says there will be an adequate supply. The Ag Minister also reiterated its opinion that Russia will produce large crops this year despite weather stress.

Russian wheat exports are also being impacted by the war with Ukraine. Russia has restricted its exports at low-water ports as these are the ones that see the highest number of drone attacks. As a result, exports out of Russia have slowed and prices have risen due to elevated transit costs to get wheat to deep-water ports. This has added $7.00 to a metric ton of Russian wheat in the past week. Global transit costs have risen on the whole as the closing of the Straits of Hormuz is again causing energy costs to rally.

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is collected from a variety of sources and is believed to be reliable but is not guaranteed to be accurate. This report is provided for informational purposes only and is not furnished for the purpose of, nor is it intended to be relied upon for specific trading in commodities herein named.