Wheat Futures Hit 4-Month High

Soybean futures stabilized around $10.70 per bushel, holding near Wednesday’s 11-month high of $10.80, supported by strength in soyoil and the broader energy market.

The recent rally in crude oil—fueled by escalating tensions between Israel and Iran—has boosted the appeal of soyoil as a biofuel feedstock, enhancing demand for soybeans.

Additional support came from a proposed US Senate Republican tax bill that would extend the clean fuel tax credit through 2031 but reduce its value by 20% for biofuels made from feedstocks sourced outside the US—a potential tailwind for domestic soy.

Meanwhile, traders continue to monitor US-China trade relations, as soybeans were not included in the latest bilateral agreements, leaving questions over Chinese demand unresolved.

In Brazil, the world’s top soybean exporter, June export forecasts rose to 14.37 million tons, up from last week’s estimate of 14.08 million.

Heating Oil increased to a 14-month high of 2.67 USD/Gal.

Over the past 4 weeks, Heating Oil gained 24.01%, and in the last 12 months, it increased 5.83%.

Brent crude oil futures extended their rally to over $77.5 per barrel on Thursday, the highest in five months, as worsening geopolitical tension in the Middle East threatened the supply of energy from the key region.

Israel and Iran continued to exchange missiles late in the week as Tel-Aviv claimed to have stricken nuclear targets in Iran, consolidating concerns of escalation between both countries.

This was after US President Trump struck a hawkish tone against Iran to maintain the possibility of US involvement, which would risk global conflict and cut off tanker activity through the Strait of Hormuz.

Separately, the dollar held most of its losses from the start of the quarter as uncertain economic policy in the US drove investors to pivot away from green-back denominated assets, supporting commodities priced in the currency.

WTI crude oil futures extended their rally to over $76.5 per barrel on Thursday, the highest in five months, as worsening geopolitical tension in the Middle East threatened the supply of energy from the key region.

Israel and Iran continued to exchange missiles late in the week as Tel-Aviv claimed to have stricken nuclear targets in Iran, consolidating concerns of escalation between both countries.

This was after US President Trump struck a hawkish tone against Iran to maintain the possibility of US involvement, which would risk global conflict and cut off tanker activity through the Strait of Hormuz.

Separately, the dollar held most of its losses from the start of the quarter as uncertain economic policy in the US drove investors to pivot away from green-back denominated assets, supporting commodities priced in the currency.

By Shunsuke Tanaka and Aisha Batti / Yomiuri Shimbun Staff Writers

Eiji Hashimoto, chairman and CEO of Nippon Steel Corp., said at a press conference on Thursday that the acquisition of United States Steel Corp. "is a form of Japan-U.S. manufacturing collaboration Japan should aspire to."

Vice Chairman Takahiro Mori also attended the press conference. The following is taken from the question-and-answer session.

Question: What is the basis for your argument that, even with the conclusion of the national security agreement (with the U.S. government), freedom of management is preserved?

Eiji Hashimoto: The substance of the agreement has little to do with security. It is an industrial policy and an employment policy. It means (we should) "take care of U.S. Steel" and "make the employees happy."

There is no obstacle (due to the agreement) to capital investment because the value of the company (U.S. Steel) will not increase if it is not done. Also, there is no point in moving the location of the headquarters. The operation will not work if the directors are all Japanese just because it is a wholly owned subsidiary of Nippon Steel. If the management team is to be an extension of the previous one, the CEO and other key positions will be filled by Americans.

There is no significant harm in (the U.S. government's) wanting to appoint one director through the holding of the golden share. If they limit our activities, U.S. Steel will not be able to revitalize or develop. That would be inconsistent with (U.S.) President (Donald) Trump's desire to revive U.S. manufacturing industry and revitalize U.S. Steel. I don't think that's what they're thinking about.

A company that has supported the United States for more than 120 years is now in the hands of a foreign country. How would the Japanese government respond if Nippon Steel were in dire straits and bought by a foreign country? I don't think economic rationality would allow them to say, "Yes, we understand." I think it is a matter of course to supervise exceedingly carefully, and to veto anything outrageous. Enough freedom of management is ensured.

Question: What was the decisive factor in the decision (by President Trump) to (make U.S. Steel) a wholly owned subsidiary?

Hashimoto: The U.S. budget deficit is hemorrhaging red ink, and the trade deficit is getting out of control. They must be changed. If you ask who is losing the most when it comes to containing China, it is the (U.S.) manufacturing industry.

I think initially there was some thought the tariffs alone could revive (the manufacturing industry). Times have changed, and just imposing tariffs will not revive the industry. Ultimately, I think (the president) was torn, but I believe he decided leveraging the power of the Japanese manufacturing industry and Nippon Steel was the best way to revitalize U.S. Steel.

Takahiro Mori: I think it was the voice of the local community. After a year and a half of time and effort spent visiting and talking with the local people, they understood the true value of this deal. I think that may have finally pushed President Trump to give it a go.

Question: How will U.S. Steel's growth help Japan regain its growth potential?

Hashimoto: The responsibility of Japanese manufacturing executives is to firmly expand capital investment in Japan and create a virtuous cycle that will lead to higher wages. However, it is impossible to do so by doing business only in Japan. The money earned in overseas markets must be returned to Japan, where it can be used to refine capabilities of R&D and manufacturing for high-value products. As our worldwide headquarters, we need to revive Japan.

What the United States needs most right now, and what it would not have on its own, is basic manufacturing technology and manufacturing capabilities. When it comes to having a manufacturing industry, from materials to products, Japan is by far the best. In terms of Japan-U.S. manufacturing collaboration, I think this is something Japan should aspire to.

Question: How did you progress through the negotiations?

Hashimoto: When I joined the company 45 years ago, we were the world's top steel manufacturer, but we have been steadily declining in the rankings. By having a vision to restore the company to the number one position in the world, our employees can do their best.

I believe this deal is good for both Japan and the United States. It has a good cause, and it is not just about Nippon Steel's profits, but could be a form of development for a new era of Japanese manufacturing.

Mori: There were a few close calls. Each time, we were able to overcome crises by thinking about why the other party was making these demands and then making proposals. I never once thought of giving up or quitting.

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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