Good morning!
Grains bounce overnight… As of 6 a.m. CT, December corn was up 2 ¼ cents. January soybeans rose 5 cents, while December soybean meal gained 80 cents and December soybean oil lost 15 points. December soft red winter wheat was up 2 ½ cents, while December hard red winter wheat gained 3 ¾ cents. Trading ranges have been tight in overnight trade, with grains and soybeans seeing a bounce after markets slumped to multi-month lows the previous session. A firmer U.S. dollar ahead of this afternoon’s Federal Reserve rate decision (see item below) is seen as a headwind for overall demand while the Brazilian real’s post-election slump has left U.S. soybeans pricier on the global market.
In outside markets, Nymex WTI oil futures were up 1.4% at $101.28 a barrel on concerns over a potential re-escalation of fighting between the U.S. and Iran after the U.S. midterm elections (see item below). The ICE U.S. Dollar Index was up 0.1%, trading not far off its high for the year. The yield on the 10-year Treasury note was up slightly at 5.012%. Stock-index futures point to a mostly higher start.
Listen to Warsh… Fed funds futures traders have priced in a better-than-90% probability that the Federal Reserve will leave rates on hold when it concludes its two-day policy meeting at 1 p.m. CT this afternoon. Fed officials have signaled more tightening will be needed to get inflation back to their 2% target, but that they’re not in a hurry to deliver another hike after raising the fed funds rate a quarter of a percentage point last month. The focus will likely be on Fed Chairman Kevin Warsh’s news conference at 1:30 p.m. CT.
- Warsh is “likely to keep things quite matter-of-fact given his lack of enthusiasm for forward guidance,” wrote economists at ING. “We expect his message to be that the economy remains in decent shape, unemployment is low, and inflation is above target. The policy changes being made will be determined by the trends in incoming data, with officials currently thinking that they probably have more work to do.”
Iran war re-escalation warning… The U.S. told several Gulf Arab nations to prepare for a possible short, intense military campaign against Iran after the U.S. midterm elections, the Wall Street Journal reported Wednesday. The report said President Donald Trump is leaning toward a large post-election attack that would target Iranian infrastructure and nuclear sites, but hasn’t made a decision. The report said the communications through diplomatic channels are happening alongside growing indications the U.S. and Israel are preparing for a new round of heavy combat operations against Iran.
Trump says Putin-Zelensky meeting soon… President Donald Trump said a meeting with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky would happen soon. “I think with Russia, we’re making a lot of progress with Russia-Ukraine,” Trump told reporters early Wednesday after returning from Texas, where he held two midterm election campaign rallies, Bloomberg reported. “There’ll be a meeting set up here soon,” he added, “with President Putin and President Zelenskyy.” Wheat futures have seen pressure on prospects for talks though analysts remain skeptical of a near-term breakthrough that would ease the bottlenecks that have largely choked off grain exports from the Black Sea region.
Showers moving eastward… A front over the Upper Midwest will produce showers and thunderstorms over parts of the Northern Plains and upper Mississippi Valley on Wednesday afternoon and move eastward into the upper Great Lakes by Wednesday evening, the National Weather Service said. The showers and thunderstorms move into the middle Mississippi Valley and Central Plains by Thursday morning. More rain will develop along the front over parts of the Great Lakes into the middle Mississippi Valley on Thursday morning and over the lower Great Lakes by Thursday evening and into parts of the Northeast by Friday morning.
Brazil’s center west needs rain… Dry weather in center west Brazil “is far from a crisis, but it is becoming more serious,” said Drew Lerner of World Weather Inc. on Tuesday. Early planted and emerged soybeans and corn have managed to perform relatively well because of well timed-rainfall in late September and early October. But rainfall has fallen off in both frequency and intensity and that has raised a little concern over the future for crop development because of declining soil moisture and short-rooted crops, Lerner said. A general soaking rain is needed for the region to ensure that future bouts of drier biased weather do not become a problem with production once again, he said. World Weather sees “fair potential” that scattered shoes and thunderstorms forecast for the coming 10 days will impact most production areas, but an equal chance that daily rain intensity will be be highly variable, benefitting some areas more than others.
Syngenta eyes $66B IPO… Syngenta’s advisers are targeting a valuation of at least $66 billion when the Swiss-Chinese ag chemical giant lists on Hong Kong’s stock exchange, a move expected to take place early next year, Reuters reported. UBS and China International Group, two of the sponsor banks for the initial public offering, are marketing the Basel-based maker of seeds and crop-production products at 15 to 20 times expected 2026 core earnings, the report said. That would value Syngenta, which is controlled by China’s state-owned Sinochem, at $66 billion to $88 billion based on 2025 earnings before interest, tax, depreciation and amortization (EBITDA) of $4.4 billion and would place the offering among the largest IPOs expected for next year.
Bolsonaro flees Brazil… Brazilian senator Flavio Bolsonaro arrived in Miami Tuesday after fleeing his country following a defeat in its presidential election, Bloomberg reported, citing O Globo. The report said Bolsonaro had been ordered to surrender his passports to Federal Police but failed to do so. Bolsonaro was greeted by his brother Eduardo upon his arrival, according to O Globo. A senior State Department official said earlier Tuesday that the U.S. would grant visas to Flavio and his family, the report said.
CFTC plans more timely commitments data… The Commodity Futures Trading Commission will provide more frequent and timely updates on the positions of large traders in the futures markets by the end of this year, CFTC Chairman Michael Selig announced Wednesday. The closely followed Commitments of Traders report, which reveals the exposure of commercial and speculative traders in futures markets, will move from once to twice a week, Selig said. Data through Monday will be published on Wednesday and data through Wednesday will be published on Friday. Currently, the CFTC releases the reports on Friday afternoon, offering a breakdown of positioning in the week ending the previous Tuesday. The new reports will up the frequency and also cut down the lag time of the reports from three days to two.
Palm oil bounces… Malaysian palm oil futures bounced, hovering above MYR 4,700 a ton as bargain hunters emerged after prices fell to a nearly two-week low, Trading Economics said. A weaker Malaysian ringgit and firmer soyoil prices on the Dalian market also provided support, alongside a recovery in crude oil prices that bolster palm oil’s appeal as a biodiesel feedstock, the report said.
New Interior grazing order… Interior Secretary Doug Burgum this week signed an order with a number of grazing-related directives, including calling for agency bureaus to prioritize grazing when processing applications for vacant allotments, Agri-Pulse reported. The order also calls for Interior bureaus to identify lands available for livestock grazing, renew grazing permits for full 10-year periods, and create a public map of lands available for grazing, the report said, adding that it also directs Interior Department offices to recommend changes to policies that either limit grazing or protection from predators.
Firm cash drives cattle higher… December live cattle fell $0.35 to $230.85. November feeders rose $1.475 to $350.025, closing at a 3.5 month high. USDA reported active cash cattle trading Tuesday, with steers averaging $227.08 and heifers $227.92. The agency Monday said cash cattle trading last week averaged $227.06, which is up nearly $3 from the week prior. The noon report Tuesday showed higher boxed beef prices.
Hogs slump to another contract low… Another day, another contract low for lean hog futures Tuesday. The December contract fell $2.65 to end at $62.025 on heavy technical selling. Cash fundamentals continue to weaken, with the CME lean hog index projected Wednesday at $69.36, down $0.70, while the noon USDA pork cutout report Tuesday fell $0.99 to $72.81. See: Seasonal headwinds mean pork cutout unlikely to rescue cash hog fundamentals.