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Grains see two-sided overnight trade… As of 6 a.m. CT, December corn was up ¾ cent. November soybeans were 3 ¼ cents lower, while December soybean meal fell $3.30 and December soybean oil rose 52 points. December soft red winter wheat was up 2 ¾ cents, while December hard red winter wheat gained 1 ¼ cents. Futures saw two-sided trade overnight as traders position for Friday’s USDA crop production and supply-and-demand updates. Weekly export sales data is due this morning. A stronger dollar is a negative for ag commodities, while a renewed rally in oil is a source of support. Traders expect USDA to trim its average corn yield estimate and nudge up its soybean estimate. Read more here on what to expect Friday from Pro Farmer’s Spencer Langford.
In key outside markets, Nymex WTI crude oil futures are 5% higher at $92.65 a barrel. The dollar is firmer versus major rivals, while the yield on the 10-year Treasury yield stood near 5.345% (see items below). U.S. stock index futures pointed to a lower start for equities on Wall Street as traders react to the renewed rise in bond yields. The economic calendar features weekly jobless claims data at 7:30 a.m. CT.
Asia wheat buyers cut forward commitments… Asian wheat millers are cutting forward commitments in reaction to soaring prices caused by Black Sea disruptions, which have choked off exports from one of the world’s most important growing regions, Bloomberg reported. The report said some millers in Southeast and South Asia are covering needs only through December or closer to delivery, instead of their usual practice of buying as far as six months ahead. USDA says Southeast Asia is the world’s second-largest wheat-importing region this season. Russia and Ukraine have escalated attacks on inbound ships and each other’s port infrastructure in recent months, sharply curtailing exports from the region.
Isaias continues to strengthen… Hurricane Isaias continues to intensify and is expected to be a strong hurricane when it approaches the northern Gulf Coast on Friday, according to the latest advisory from the National Hurricane Center. Meteorologists expect landfall near Pensacola, Fla., late Friday. World Weather Inc. has warned that the storm is likely to cause wind damage, flooding and a storm surge impacting southeastern Louisiana, southern Mississippi, southern Alabama and the far westernmost Florida Panhandle, with cotton in Alabama and northwestern Florida likely to experience the biggest impact from an agricultural perspective. The forecaster noted excessive rain has already occurred this week in southern Georgia, northern Florida and southeastern Alabama where cotton fiber quality has declined and some of the crop has been strung out of its bolls. The storm also has implications for energy markets, shutting in production in the Gulf (see item below).
Oil futures surge over 4%... Oil futures surged in overnight trade Thursday after an attack on a tanker in the Persian Gulf and a report in the Atlantic magazine said the White House asked the Pentagon to draft strike options against Iran that could be undertaken before the midterm elections. A unit of the UK Navy said a tanker was hit by projectiles off the coast of Qatar on Wednesday, the first reported strike on a tanker deep within the gulf in about a month, Bloomberg reported. Meanwhile, the formation of Hurricane Isaias in the U.S. Gulf has resulted in producers shutting in more than 510,000 barrels a day of crude production, Bloomberg noted.
Dollar jumps, yields rising… The ICE U.S. Dollar Index, a gauge of the currency against a basket of six major rivals, was up 0.2% early Thursday, building on the previous session’s rebound and trading not far off the 2026 high set earlier this week. A stronger dollar is a negative for commodities priced in the currency, as are surging government bond yields. The yield on the 10-year U.S. Treasury note rose 6 basis points to 5.345%, near a level last seen in 2002. Rising oil prices and continued concerns over government debt have been contributing to global bond selloff that has sent yields soaring around the world.
No rush, but expect more rate hikes… Minutes of the Federal Reserve’s September meeting, which saw policy makers unanimously vote to lift the central bank’s key lending rate by a quarter point, released on Wednesday reinforced market expectations that further hikes are on the way amid persistent inflation pressures but didn’t convince traders that a consecutive tightening at this month’s meeting is an urgent priority. “Most participants assessed that another increase in the target range for the federal-funds rate would likely be appropriate by year end,” the minutes said. “Participants emphasized, however, that they approached each meeting with an open mind and decisions at future meetings would depend on incoming information.” Fed funds futures traders priced in a less than 20% probability of a quarter-point hike on Oct. 28, little changed from Tuesday. Traders see a nearly 85% probability of another hike by year-end.
- Federal Reserve Governor Christopher Waller early Thursday said he expects the central bank will need to deliver further rate increases to bring inflation back to its 2% goal, but that those hikes “do not need to come at consecutive meetings,” the Wall Street Journal reported. But those hikes “should be in place in an acceptable period of time,” said Waller, who spoke in Istanbul.
FTC launches ag-equipment inquiry… The Federal Trade Commission and USDA on Wednesday announced a joint public inquiry into issues affecting agricultural equipment manufacturing and distribution markets. FTC and USDA, in a joint statement, said the inquiry included “potential anticompetitive conduct” and “seeks to address the growing number of complaints received by USDA that farmers across the country face other barriers to acquiring agricultural equipment and the services required to keep equipment operating.” Shares of Deere & Co. dropped 3.8% on Wednesday and other ag equipment makers also came under pressure. In a settlement earlier this year, Deere made it easier for farmers to fix their own equipment.
Western Corn Belt quality woes… Heavy September rainfall across the western Corn Belt severely delayed harvest and triggered sharp grain quality deterioration. The historically wet weather left standing crops vulnerable to Diplodia ear rot, lodging, and elevated mycotoxin risks. Don’t miss this deep dive by Pro Farmer’s Hillari Mason: Rain-soaked harvest raises quality red flags: What it means for yields and basis in the western Corn Belt
Russia says no plague risks… Russia’s health regulator said on Wednesday there were no risks of an epidemic breaking out in Siberia after a plague institute worker there died, Reuters reported. The announcement came as the World Health Organization pressed Moscow for more information about her cause of death. Russian authorities say the 28-year-old laboratory worker died last Friday from pneumonia of an as-yet unestablished origin. The case has prompted international concern, including from President Donald Trump. Around 200 people were initially placed in quarantine, Reuters noted.
Malaysian palm oil futures jump… Malaysian palm oil futures jumped more than 3% to trade above MYR 4,650 a ton, snapping a string of recent declines as the ringgit weakened and higher crude oil prices boosted competitiveness, according to TradingEconomics. Gains in rival edible oils on China’s Dalian exchange also proved support as markets reopened after Golden Week, the report said, while Indian buyers secured around 150,000 tons in three days as refiners turned to palm oil amid tight sunflower oil stocks ahead of November’s festive demand.
Cattle see corrective pullbacks… December live cattle fell $0.325 to end at $223.775 on Wednesday, nearer the daily high. November feeder cattle lost $2.475 to $335.80, nearer the session low. The live and feeder cattle futures markets saw routine corrective price pullbacks following Tuesday’s solid gains. Supply and demand fundamentals are still overall bullish for cattle and beef markets.
Cash hogs still sinking… December lean hog futures fell $1.275 to $69.10 on Wednesday, nearer the daily low. The lean hog futures market saw technical selling pressure resume as the bears tightened their grip after the bulls saw some glimmer of hope early this week. Cash hog market prices continue to trend down, further strengthening the lean hog futures bears’ case.