Good morning!
Grains tick higher overnight, soybeans lower… As of 6 a.m. CT, December corn was up 2 1/4 cents. November soybeans fell 8 3/4 cents, while December soybean meal shed $4.60 and December soybean oil rose 39 points. December soft red winter wheat was 2 cents higher, while December hard red winter wheat gained 2 ¼ cents. U.S. government offices are closed for the Columbus Day holiday, which means weekly export inspections and crop progress data will be delayed until Tuesday.
In key outside markets, Nymex WTI crude oil futures were up 1% at $92.75 a barrel, lifted after Houthi rebels struck the Saudi capital’s airport over the weekend. Diesel futures were lower after President Donald Trump said Russia and Ukraine agreed to stop targeting energy facilities, though Ukraine said Russia continued its attacks (see items below). The yield on the 10-year Treasury note stood at 5.237%, while the ICE U.S. Dollar Index was up 0.2%. U.S. stock-index futures pointed to a flat start for equities on Wall Street.
Corn futures held their ground overnight after USDA shocked the market Friday, with the December contract touching a limit-down loss of 30 cents before ending the day with a 20 ½ cent decline. USDA defied expectations for a cut to production, lifting its average yield estimate by 2.7 bushels to 181.2 bushels per acre and boosting production by 234 million bushels from September. That lifted new-crop ending stocks 282 million bushels from last month to 1.849 billion bushels, 179 million above the average estimate. December corn held support near the 200-day moving average. The question is whether the selloff will attract demand, with bulls finding a modicum of solace from the contract’s ability to finish somewhat off the lows on Friday. Wheat was also attempting to bounce after being dragged lower by corn on Friday after USDA boosted ending stocks more than expected. USDA forecast a record soybean crop, bumping up new-crop carryover only slightly while November futures managed a positive finish Friday.
Ukraine says Russia breaches ‘energy ceasefire’... President Donald Trump on Sunday said Russia and Ukraine had agreed to an “energy ceasefire,” but offered no details on the agreement. Ukraine President Volodymyr Zelensky on Monday morning said Russia had used drones and missiles to strike power and gas facilities overnight, the Financial Times reported. “We are ready to respect an energy ceasefire if Russia is ready to do the same,” he said. Trump on Friday said he had reached an agreement to ease sanctions on Moscow to allow Russia to release diesel supplies onto the world market. Analysts have questioned whether the amounts agreed to would have a significant impact on the market. Trump on Saturday called on Ukraine to cease hits on Russian refineries and called for Zelensky to be replaced. The plan to ease sanctions on Russia has seen widespread pushback. The U.S. “should not provide Putin with a financial lifeline while Russia continues to kill Ukrainian civilians. The administration must immediately reverse course,” a bipartisan group of senators said in a statement on Sunday, the Wall Street Journal reported. The group comprises Republican Sens. Susan Collins of Maine, Lisa Murkowski of Alaska, John Curtis of Utah and Thom Tillis of North Carolina and Democratic Sens. Jeanne Shaheen of New Hampshire, Ron Wyden of Oregon and Richard Blumenthal of Connecticut.
Houthis continue attacks on main Saudi airport… Iran-backed Houthi rebels attacked King Khalid International Airport in Riyadh, the capital of Saudi Arabia, on Sunday – a day after a strike that killed 12 people. The strike on Saturday injured more than 300 people and marked the deadliest single incident in Saudi Arabia since the start of the Iran war in late February, Bloomberg reported. The strikes come after Saudi-backed forces last week launched a campaign to retake Houthi-held areas in Yemen and eliminate the group. The Houthis have seized a large chunk of Yemeni territory and bolstered their control over the Bab el-Mandeb strait, a global shipping chokepoint, the report noted.
Hedge funds still heavily long corn… Friday’s Commitments of Traders data from the Commodity Futures Trading Commission showed that large speculators had cut their net long position by 60,000 contracts in the weekly period ending on Oct. 6. That left them with a long position at a still elevated 317,400 contracts ahead of Friday’s bearish USDA data, which triggered the biggest one-day slump for corn since 2023 and raises the risk of further liquidation from an already crowded long position, wrote Ole S. Hansen, head of commodity strategy at Saxo Bank, in a weekend note. The data showed fresh buying in soybeans over the period, lifting the net long position to 251,700 contracts, near its one-year high, while wheat positioning remained mixed, Hansen said.
Storms likely damaged cotton quality… Hurricane Isaias made landfall on the Florida panhandle Friday evening as a Category 2 storm. Meanwhile, Tropical Cyclone Rachel moved into the southwestern U.S. over the weekend and Hurricane Simon was expected to make landfall over southern Sinaloa, Mexico, as a Category 1 strom on Wednesday, noted World Weather Inc. The forecaster said harvest delays occurring during the weekend in the southeastern U.S. because of Isaias, Rachel’s remnants impacted cotton areas in the Imperial Valley of California, northwestern Mexico and Arizona, while remnants of Simon will induce concern over fieldwork in the southern Plains and lower Midwest (see item below). “Damage to cotton quality has likely occurred in the southeastern U.S. and the southwestern U.S. with similar conditions possible in West Texas during mid-week,” World Weather wrote Sunday.
Rains head for Plains, warmer temps for Midwest… Unsettled weather in the western U.S. will shift toward the central and southern Plains early this week, with scattered severe weather possible from Kansas City to Lubbock, the National Weather Service said Monday. By Wednesday, heavy rainfall of 2 to 3 inches are possible from western Missouri to the Texas Big Bend. Meanwhile, well above average temperatures are forecast for much of the central and eastern U.S. with highs in the 80s and even lower 90s for portions of the Plains and Midwest, with some daily record highs likely to be tied or broken.
Iowa in focus as Democrats gain advantage… The nonpartisan Cook Political Report has shifted 18 U.S. House races in favor of Democrats, projecting they could gain 9 to 19 seats in the November midterms and win a majority with 224 to 234 seats, Agri-Pulse reported. The shifts include three battleground districts in Iowa, as well as competitive races in Michigan and North Carolina. In rural districts, Democratic campaign ads are heavily capitalizing on voter frustration over tariffs, foreign beef imports and strains on the agricultural economy, the report said.
- Perspective: Terry Haines, founder of Pangaea Policy, on Sunday said his “barest of midterm base cases” now sees a 51% probability that Democrats emerge with “tiny majorities” in both houses of Congress. “This is a material change for us. But today’s view is a highly volatile snapshot, not close to a high-confidence forecast,” he wrote on LinkedIn. He reiterated that Pangaea’s view still goes against national media narratives around a Democratic “blue wave,” which he said “mistakenly translates national polling unadulterated into a tiny number of competitive races.”
U.S. economists win Nobel Prize… A pair of U.S. economists – Robert E. Hall and Michael Woodford – were awarded the Nobel Prize for Economic Sciences on Monday, recognizing their work on the household and business foundations of economic stability, the Wall Street Journal reported. Hall is a professor of economics at Stanford University, while Woodford holds the same position at Columbia University.
Cattle look to build on last week’s strong finish… December live cattle futures rose $3.50 to $227.05 on Friday, hitting a two-month high and posting a weekly gain of $5.575. November feeder cattle futures gained $7.075 to $341.95, posting a nearly three-month high and gaining $10.80 on the week. Serious technical buying provided support, while a big drop in corn futures on Friday provided an added boost for feeders. Cash trade late last week saw steers average $219.10 and heifers at $219.91 versus an average cash trade of $219.80 the previous week.
Cash keeps downward pressure on hogs… December lean hog futures fell $0.775 on Friday to end at $67.825, scoring a contract low and posting a weekly loss of $2.30. The CME cash hog index and cash hog prices remain in a downtrend. Monday’s projected index is seen down 80 cents at $77.61, while the national direct five-day rolling average cash hog price Friday was $75.01.