GRAIN CALLS
Corn: 1 cent lower to 1 cent higher.
Soybeans: 8 to 10 cents higher.
Wheat: Winter wheat steady to 2 cents lower; HRS 2 to 4 cents higher.
GENERAL COMMENTS: Soybeans continue to lead strength and are nearing contract highs. Corn and wheat saw relative weakness overnight but did see an increase in buying going into the break. Front-month crude oil futures are trading modestly lower this morning on corrective selling while the U.S. dollar index is around 80 points higher.
The Federal Reserve this afternoon is expected to raise the target range for the federal funds rate by 25 basis points to 3.75%-4.00%, marking the first rate hike since 2023, as inflation remains well above target and the energy shock stemming from the war with Iran continues to weigh on the outlook. U.S. headline inflation held at 3.4% year-on-year in August, while core inflation was at 2.4%. Meanwhile, diesel prices have risen to $6 a gallon, adding further pressure to the inflation outlook as an end to the U.S.-Iran conflict appears increasingly distant. Fed Chairman Kevin Warsh will also hold a press conference this afternoon. Financial market watchers are very curious to see how Warsh’s comments impact the bond markets, which have been jittery lately.
Nymex crude oil futures fell to around $104 a barrel today, retreating after two consecutive sessions of gains as signs of rising U.S. inventories weighed on the market. The American Petroleum Institute reported a 7.1 million-barrel increase in U.S. crude stockpiles last week, alongside higher gasoline and distillate inventories, with official government data due later today. Supply concerns nevertheless remain elevated. Saudi Arabia’s East-West pipeline remains offline, although U.S. Energy Secretary Chris Wright said the outage should last only a matter of days. Iran-backed Houthi militants are advancing toward the Bab el-Mandeb Strait while intensifying attacks on Saudi targets and regional shipping routes. The disruption has reportedly prompted Saudi Aramco to delay some deliveries to European customers, increasing competition for alternative supplies. Libya also experienced a supply halt.
Prospects for an extension to the U.S.-China trade truce are solidifying as the two sides discuss slashing tariffs on goods including American energy and agricultural products ahead of the leaders’ summit next week, Bloomberg reports. “Treasury Secretary Scott Bessent said Tuesday he’ll meet this weekend with his Chinese counterpart, He Lifeng, ahead of the summit between President Trump and Xi Jinping set for Sept. 24 in Washington. Earlier, Bloomberg News reported the U.S. and China are discussing lowering tariffs on certain goods. Next week’s meetings are also likely to result in an agreement to cut duties on Chinese inputs for manufacturers, according to people familiar with the matter,” said the report. “An extension of the one-year trade truce would remove one potential stumbling block for a world economy grappling with wars in Iran and Ukraine, elevated oil prices and rekindling inflation concerns that are pushing up global borrowing costs. Still, expectations for the summit remain tempered by China’s relations with Iran and Russia as well as competition over leading-edge technologies such as artificial intelligence,” said the report.
CORN: December corn is trading near the 10-day moving average at $5.32 1/2. That remains key support today and is reinforced by $5.25. Resistance comes in at $5.40 on a reversal higher.
SOYBEANS: November soybeans are working higher for the third consecutive session. Resistance stands at the $13.25 mark with reinforcement from $12.32 1/4. Support comes in at $13.08 on a reversal lower.
WHEAT: December SRW wheat are chopping between technical support and resistance. Resistance at $7.33 1/2, the 10-day moving average, capped the upside overnight, while support at $7.10 1/4 remains under the market.
LIVESTOCK CALLS
CATTLE: Choppy/higher.
HOGS: Choppy/lower.
CATTLE: Live and feeder cattle futures are expected to open with a mostly firmer tone led by strength in the cash market. Futures fell on profit-taking Tuesday but uptrends remain in place on the daily bar chart. Cash trade has been slow to develop so far this week but after last week’s strength more gains are likely. Choice beef rose 77 cents to $376.08 Tuesday.
HOGS: Lean hog futures are expected to open lower in a continuation of recent selling pressure. Bears are in full control of the technical advantage and fundamental weakness cements their advantage. Discounts to the cash market could limit the downside. The CME lean hog index is down another 73 cents to $87.21. Pork cutout slid $2.28 to $87.50 Tuesday, led by losses in bellies though all cuts except hams saw losses on the day.