WHEAT LEADS LOWER; FARM BILL DRAFT DROPS

Live cattle settled at $246.05, off 0.7%, and feeders at $368.27, off 0.8%, with both markets treading water ahead of this week's direct cash trade. Brownfield reported August live cattle closed at $246, down $1.35, with the market explicitly flagged as waiting on direct business. The ongoing Cargill Fort Morgan/Schuyler plant lockout that began May 19 remains unresolved, keeping processing-constrained dynamics in place and packers holding the leverage in the negotiation. Hogs were the one bright spot in the livestock complex, up 0.6% to $97.28, not a trend change but a divergence worth watching if it holds into Thursday. The Asian Longhorned tick story out of Missouri is a slow-burn animal-health risk that isn't priced anywhere yet but is changing herd management behavior on the ground.

Senate Ag Committee Chairman John Boozman dropped the Agricultural Act of 2026 discussion draft Tuesday, describing it as providing 'long-overdue stability' to agriculture and rural communities. This is a discussion draft, not a floor vote, but the text is live and the lobbying clock has started. The bill lands while feeding margins are actually improving, per Beef Magazine, because corn, meal, and wheat futures have all fallen in recent weeks. That context matters: reference prices in any new farm bill will be set against a market that has given back significant ground from 2022-2023 highs. Read the reference price provisions before your lender does. The America Food Supply Chain Resiliency Act also moved today, targeting new markets for local and regional foods and small producers. Two policy moves in one session is unusual. Neither one moves futures tomorrow, but both shape the economics of the next crop year.

WTI crude settled at $73.05, off 0.8%, and natural gas fell 2.1% to $3.19, sitting at just 13% of its 52-week range and offering no input-cost relief story from that end of the market. The Iran-Hormuz tensions, with the Strait of Hormuz premium that built since early April now deflating on diplomatic progress, continue to pull crude lower in the big picture, but the API's 765,000-barrel inventory draw last week complicates the bearish crude narrative. Compare that draw to the 8.33 million barrel draw the prior week and you've got a volatile inventory picture, not a clean trend. Tanker rates are running hot as Middle Eastern producers move crude that has been stranded for months, which tells you the physical market is tighter than the futures board wants to admit. Input-cost math for fall applications should assume crude doesn't fall cleanly from here.