The five things on the desk this morning. Grab a coffee.
Oil
Brent traded near $95 overnight after a 4% pop Monday faded into the Tuesday session as weekend optimism about Iran-U.S. talks evaporated. Tehran suspended communications with Washington, Iranian media reported, and threatened to keep Hormuz closed; Trump said a deal could come "within a week" but markets aren't buying it. The real move is what didn't happen: crude gave back half Monday's gains in Asian trade, which tells you the market has stopped pricing hopium. WTI sits just above $91 after settling $92.16 Monday. May saw Brent drop 17%, the steepest monthly slide since 2020, as ceasefire hopes built—but with talks now stalled and the Strait still effectively shut, that relief trade is reversing fast.
Precious Metals
Gold got hammered Monday, down $79 to close $4,514, shedding nearly 2% as Iran headlines momentarily eased geopolitical premium and Fed hike odds held firm. Silver held steadier around $75, down less than a percent. The divergence matters: gold is trading like a rate instrument again, not a safe haven, while silver's industrial bid (solar, AI infra) is keeping a floor under it even as macro clouds gather. Markets now price roughly 50-60% odds of a Fed hike by year-end after hot CPI, and that's keeping non-yielding assets under pressure despite a war that's choking 20% of global oil supply. The setup is strange: record geopolitical risk, gold off its highs.
Natural Gas
Henry Hub hovered just above $3.19/MMBtu Tuesday morning after pushing toward three-month highs last week on heat forecasts and tighter supply. The story is May's 19% rally—the best month since winter—driven by above-normal temps through mid-June and LNG export flows falling to 17.1 bcfd in May from April's record 18.8 bcfd on plant maintenance. Lower 48 production also slipped to 109.4 bcfd. Storage remains above the five-year average, which is capping upside, but if this heat holds gas burns through that cushion fast. The Hormuz closure isn't hitting U.S. gas directly, but global LNG tightness is keeping a bid under the complex.
US Power
ERCOT kicked off its 4CP season June 1 with forecast demand already exceeding last year's June peak, and the grid set back-to-back battery charging records at 7,847 MW. Meanwhile PJM capacity costs are still reverberating—up 833% for the 2025-26 delivery year as retirements outpace new supply and data center load keeps climbing. The through-line: U.S. electricity demand is growing at rates not seen in decades (EIA projects 2.4% in 2026), driven by hyperscale data centers concentrated in Texas and Northern Virginia, and the grid is scrambling to keep up. Solar is scaling fast in ERCOT—EIA expects 92% growth from 2024 to 2026—but the capacity crunch in PJM is a preview of what's coming everywhere. Watch Friday's jobs data for clues on whether load growth forecasts hold.
Agriculture
Grains closed mixed Monday—corn at $4.44 (down 3 cents), wheat $6.08 (down 2 cents), soybeans $11.80 (down 6 cents)—as Iran peace optimism briefly pulled energy and input-cost risk premium out of the complex. But the real pressure is structural: USDA forecasts show 2026 prices for all three near or below breakeven, the fourth straight year of negative margins for many growers. The Hormuz closure is a slow-burn crisis for ag: urea prices have already spiked $60-80/ton as Middle East fertilizer exports (30% of global nitrogen and phosphorus trade) sit stranded, and it's hitting right as U.S. farmers ramp up for late planting. China is urging phosphate export suspensions to protect domestic supply. If Hormuz stays shut into July, this becomes a 2027 crop problem, not just a 2026 one.
On the Radar Today
- JOLTS job openings (10:00 ET)—first look at labor demand before Friday's payrolls; Fed is watching this for hike signals.
- Iran-U.S. talks—no formal schedule but both sides exchanged revised proposals over the weekend; any headline moves oil 3-5% either way.
- USDA weekly export sales (Friday, 8:30 ET)—last week's corn number (94.8M bu) crushed estimates; watch if demand holds as China ag talks continue.