45Z News: Who Actually Gets Paid? + "Dome of Doom" and Corn Trades LOWER?!

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🌡️ A heat dome is building over the Plains and Corn Belt this week, pushing temps into the 90s and triple digits with heat index values up to 110°F and raising crop stress concerns. Storms along the dome's edge should bring rain to the Dakotas, Minnesota, and parts of Nebraska/Kansas before cooler, wetter conditions return by week's end.

🌱 USDA finalized its Regenerative Feedstock Rule for the 45Z Clean Fuel Production Credit, letting farmers using regenerative practices qualify corn and soybeans for lower-carbon biofuel premiums. Farm and biofuel groups praised the move, though farmers will earn premiums through ethanol plants rather than direct government payments.

⚔️ US-Iran tensions flared again after US strikes on Iranian military targets followed Iran's attacks on shipping in the Strait of Hormuz, putting peace talks on hold even as US officials say negotiations remain on track. Trump warned of further military action if attacks continue, while WTI crude trades near $70/bbl amid the uncertainty.

📊 Friday's CFTC report showed big money managers growing their corn net short to 75k contracts (largest since early February) and trimming soybean net longs to 37k (smallest since early February). Wheat saw modest selling too, with funds dumping 1k SRW contracts on the week.

🌾 USDA drops its Planted Acreage and Grain Stocks report Tuesday morning, with corn acreage expected down and soybean acreage up versus March intentions. June 1 stocks are seen higher year-over-year across the board—corn +16%, soybeans +4%, and wheat +9%.

Transcript

Corn Belt "Heat Dome"

SPEAKER_00 0:08

Morning guys. It's Monday, June 29th, 523 a.m. Central Time. Grain markets are mostly lower to begin a new week. December corn futures down eight and a quarter at 433 and a quarter. November soybeans down nine cents at 11.47 and a quarter. September Chicago wheat down five and a quarter at 584 and a half. September Kansas City wheat down a half cent at 619. September spring wheat up three at 608 and a quarter. Whole bunch of heat coming into the corn belt this week. Why don't we start there?

SPEAKER_01 0:36

So a heat dome is expected to settle over the plains in the corn belt this week, pushing temperatures into the 90s, with some areas expected to reach the triple digits. Combined with high humidity, heat index values could reach between 100 and 110 degrees Fahrenheit. The prolonged heat has raised concerns about crop stress, particularly in areas that have missed recent rainfall. As the week progresses, thunderstorms are expected to develop along the edge of the heat dome. By the end of the week, the heat is expected to shift back towards the plains, bringing cooler temperatures and better chances for rainfall across the corn belt.

SPEAKER_00 1:10

The dome of doom, a heat dome, is a giant lid of hot air that gets trapped over a region, just sits there, it bakes everything underneath it. Mackenzie, I don't know if you knew this or not, but when we have a dome of doom uh during the first week of July, the corn market's supposed to rally.

SPEAKER_01 1:27

Oh, yeah.

SPEAKER_00 1:28

And uh December corn features are down eight cents this morning. They're like two cents from their recent lows, like multi-month lows. I'm gonna try to make heads or tails of this through some of these maps. Um, this is what rainfall is supposed to look like over the next seven days. And I've got these kind of two lines drawn there. Um, that's where the dome is gonna settle, essentially. And I think that relative to the forecasts we saw last week, the dome is actually gonna settle a little bit further south and maybe a little bit further east than what we had thought. That's part of it. Uh, rainfall expected to return perhaps during the nine to 15 day period. So you do have a stretch here of seven, eight, perhaps nine, ten days, where yeah, you're gonna see highs every single day in a lot of areas of the cornbelt in the 90s, if not um upper eighties. I think past precipitation is part of the puzzle here. Over the last seven days, a lot of areas of the cornbelt saw rain. Not everywhere, though. You look at that, uh, essentially southern southern half of Iowa didn't really see much. Um, eastern Nebraska didn't see much, but I'd say more of the cornbelt caught rain over the last seven days than not. And if you look at the last 14 days, um, there were a lot of areas that saw a lot of rain. So maybe the market is of the opinion that, you know what, there's been enough rainfall. There's really not any drought out there. This isn't a concern. I I still have trouble buying that whole notion, though, just given what I know about the market and how I've seen the market react to weather in the past. This is not a normal reaction to this sort of forecast. It wasn't a normal reaction last week either, when we knew that this was coming. This is not fresh news to start the week. We knew uh that it was coming. To get into some of the uh specific numbers here, this is uh past precip again. So again, corn U.S. corn areas, based on data from our friends at Crop Profit, U.S. corn areas saw 119% of their normal rainfall over the last 14 days. There were some have and have not, certainly, but I guess the trade's looking at this and saying rainfall's been adequate. You guys tell me what you think. Um, over the next seven days, despite the the heat dome and and the uh locking out of precip, U.S. corn areas on average expected to see 123% of normal rainfall. And most of that is gonna be confined to like central and upper areas of the corn belt. It's gonna be Iowa, uh, the northern third of Illinois, southern Minnesota, Wisconsin, the Dakotas, uh, northern half of Nebraska. Uh the temperature is well above normal. We're gonna average six degrees above normal across U.S. corn areas over the next seven days. And uh 8 to 14 days, things look a little bit better, still less than uh normal rainfall, 82% of normal rainfall expected. Um, and the heat dies down a little bit, but still warmer than expected. So, or warmer than normal rather. So I don't know. I feel like uh this reaction to the in the marketplace is not normal whatsoever. I mean, we would normally rally on this. It's just there just seems to be a lot of disinterest here. You look at the corn market, this is dece corn. We're two or three cents away from some multi-month lows this morning. This is just not the way the market's supposed to react on this sort of weather forecast. You guys tell me in the comments, or you can email info at standardgrain.com what do you think this uh week or 10 days of hot and dry weather is going to do if that's gonna be the case in your neighborhood? Uh soybeans have acted much better than corn or wheat by comparison. You got some trend resistance at 1171. Um, we've got really strong demand. We're kind of stuck between some support and resistance on the charts here, but it's acted better than uh the feed grains. Um HRW wheat futures don't look good and just complete disregard for the short U.S.

Who Gets Paid? 45Z

SPEAKER_00 4:54

crop since mid-May. And a lot of that has to do with just like increased global competition over the years. We're just not the player in global wheat prices that uh we used to be.

SPEAKER_01 5:03

The USDA finalized the regenerative feedstock rule for the 45Z clean fuel production credit program last week. The rule allows farmers uh who use regenerative farming practices to qualify crops like corn and soybeans for lower carbon biofuel markets. The USDA also released an updated carbon intensity calculator to help measure the emissions benefits of those practices. Biofuel and farm groups broadly praised the rule, saying it rewards conservation practices already used by many growers and strengthens domestic demand for corn and soybeans.

SPEAKER_00 5:39

Okay. So we've got rules now and we've got a calculator, premium subs. Paul Nefer is going to be on today to run through the calculator and some of the potential implications. I think there's a lot of confusion about where the money goes. So I very clearly made this graphic in 45 seconds, if you can't tell. See the little corn grower with this with his hat?

SPEAKER_01 5:59

It's cute.

SPEAKER_00 5:59

Uh, I didn't spend a lot of time on this, but the um the clean fuel production tax credit goes directly to the fuel producer, which is the ethanol plant. There is no government money going direct from the government to the farmer. That's not how this is going to work, despite what you may have been told. The if you're a farmer and you are to benefit from this, it's going to be because the ethanol plant is going to pay you some sort of premium for low carbon corn. You're if you're a corn grower, you followed all the practices which we are now aware of. And the ethanol plant's going to pay a premium because they need that low carbon corn in order to achieve the tax credit. I think over the near term, over the next uh call it two, three couple of years, I think there could be some premiums paid absolutely for low carbon corn to the grower. But what's going to happen eventually is that every grower is going to shift toward these low carbon or low CI practices. Um, and a lot of them already have. And when if everybody's doing it, there's not going to be a premium. And the ethanol plant is just going to be the ones who capitalize on this. I wish it was set up a little bit different, but that's the reality of it. So I am not uh personally as optimistic about this as it relates to like farmer profitability as some people are. Now, what this could do is increase um ethanol production, which could help to improve corn prices. So I think in a number of ways, it could help the farmer in a roundabout way, but it's um there's

US/Iran Update

SPEAKER_00 7:23

not a direct government-to-farmer correlation. It's going to be government through the ethanol plant to farmer correlation, uh, possibly. And we hope that it works out that way.

SPEAKER_01 7:32

U.S. Iran tensions have once again escalated, according to a Pakistani source involved in the ongoing peace negotiations. Talks have been put on hold after the U.S. launched strikes on Iranian military targets in response to Iran's latest attacks on commercial shipping in the Strait of Hormuz. U.S. officials, uh, however, insist negotiations have been, uh have not been suspended and will proceed as planned. Despite the renewed military action, U.S. Central Command reported commercial vessels continue to transit the strait. Meanwhile, President Trump warned in a social media post that the U.S. could take further military action against Iran, threatening severe consequences if Iran continues to attack.

SPEAKER_00 8:12

The latest from Bloomberg early this morning is this the U.S. and Iran have agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues, paving the way to end the day's tit for tat attacks that tested a fragile truce. Crude oil futures have essentially erased all of the premium associated with the conflict. We're back to the same sort of price levels we were in mid-2025. Um maybe you got to get back below and fill that chart gap at 67.83 on a continuation basis. But crude is basically fallen apart. And a lot of the a lot of the markets were telling us for a long time that like the the general, and we discussed this at length, the general attitude for weeks has been that this thing was going to wrap up quickly. And I don't think it wrapped up as quickly as some people had thought. And maybe it's not over, but the prevailing sentiment in the marketplace team seems to be that the worst of this is behind us. Um, you know, oil flows through the strait are going to resume, fertilizer flows through the strait are going to resume, which is a positive for you guys.

SPEAKER_01 9:11

If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of our recent premium videos?

SPEAKER_00 9:17

Jim Urio, fan favorite, was on Friday. Rate hikes can't drill oil. Jim talked about the inflation situation, interest rates, um, the situation in the Middle East, investing thoughts. Jim is a fan favorite. Uh, this is the best thing you'll listen to all week. We do have audio only versions of all of our uh premium videos available now, which has been a hugely popular feature that we added uh recently. Jim talks a lot about we did a uh mailbag questions from premium subscribers, questions about land purchases and interest rates and like what's the best way for me to go about this. Jim's been a professional interest rate trader for decades and uh gives us a lot of great stuff. Lewis Stearns was on Thursday last week. We did too early agronomy and yield thoughts, too wet, too dry, where uh Lewis kind of broke it down by region and other some super interesting stuff here. Brian Split was on Wednesday, did uh charts, corn futures, where's the bottom? Uh Brian has some ideas, certainly, and his technical stuff is absolutely fantastic. I talked about what happens when China buys U.S. corn last week, and I believe China will buy U.S. corn, and I think it's a bull wild card, and I think it's something we should look out for. I talked about what has happened in the past when that's the case and why it could be a good thing moving forward and got very specific into that. If you want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a $50 per month subscription. You can cancel at any time. No other fee, no other obligation, nobody will try to sell you anything else. If you are the decision maker in your farm operation, this is just something that you must simply buy because your neighbor's buying it, and you're gonna be at a competitive disadvantage if you're not buying it. The information we're putting out is fast and furious. It's every day. We've got a new premium video, and it's all about how to make decisions on your farm. The 45Z stuff with Paul that's gonna be out today. It's gonna be an example of that. Chris Barron's gonna be on to talk about 27

The Funds

SPEAKER_00 10:59

farm budgets this week and what to look out for. It's another example of that. Just every single day we're putting out stuff to help you make better decisions. Uh, give that deal a shot this morning, guys.

SPEAKER_01 11:07

The CFTC released its weekly commitment of traders report on Friday for the weekending Tuesday, June 23rd. Large money managers were net sellers of 25,000 corn contracts. The net short position of 75,000 corn contracts is the largest since early February. The funds were also net sellers of 18,000 soybean contracts and 1,000 SRW wheat contracts on the week.

SPEAKER_00 11:28

Premium subs, you have full versions of the fund tracker charts and also the daily fund tracker tool in your email this morning. Since the uh in this cycle, since the net long peaked, corn soybeans wheat, uh, SRW wheat combined, uh, the the net long, those three contracts combined, peaked at 549 uh,000 positive in early May. The funds have been net sellers of 657,000 contracts uh across those three contracts since May 5th. That's uh pretty crazy. And they don't even really have a big net short anywhere. I mean, the the net short in corn 75,000 is pretty modest. The net short in SRW wheat 70. That's I probably call that average ish. And they're still sitting on a small net long in soybeans, which is uh very interesting. I think that there is a lot of optimism about uh crush

USDA Preview

SPEAKER_00 12:12

demand. I think there's a lot of optimism about China. I think the trades of the opinion that there's a good chance China hits that uh that soybean purchase target for new crop, but uh we'll see.

SPEAKER_01 12:21

The USDA will release its planted acreage and quarterly grain stocks report tomorrow morning. Traders expect that planted U.S. corn acreage will decline compared to March intentions. While soybean acreage is expected to increase, U.S. wheat acreage is projected to remain mostly unchanged. June 1st stocks of corn are forecast to increase by roughly 16% compared to last year, while soybeans are slated to rise about 4% year over year. Wheat stocks are expected to increase 9% versus last year.

SPEAKER_00 12:49

This is one of the biggest reports of the year as it relates to market movement. It's typically associated with a lot of volatility. There have been a lot of years in the past where grain prices will be elevated going into this report. And there's always the risk of USDA throwing um a bearish wrench in the works, you know. And in this sort of situation where the markets, corn market especially, has already fallen apart, I don't know what sort of risk is here. I don't think that the farmers necessarily like terrified about the market like falling from higher levels at this point. You know, if dece corn was at five bucks, I'd be a lot more worried about this report than I am with Deast Corn at 433, especially with the uh crop insurance safety nets that are out there. And if you're not aware of all that stuff, that's another reason to buy the premium stuff. So um we'll do a uh USDA snapshot video following that report tomorrow, guys. Pete Meyer is going to join me for that one, and it'll be a quick five-minute overview. Hey, here's here's what you need to know about the report. It'll be out uh shortly after the release. What did cattle do on Friday?

SPEAKER_01 13:47

Cattle futures were lower on Friday. Live cattle were 40 cents to a buck 43 lower, with the exception of the front month contract, which gained a mere five cents. Feeder saw losses ranging from 345 down to 390. Cash cattle trade was light last week. The only established trade for the week, according to USDE reports, was over in the Western Corn Belt, where cattle were steady compared to the prior week at 260.

SPEAKER_00 14:08

S P 500 is up eight tenths of a percentage point that 60 points to start the week. The Dow's up 200. Treasuries are mixed, crude oil up 73 cents in the August WTI at 69.95. Last trade. Have a great day, guys. Back on Tuesday.