Good morning!
Grain prices firmer overnight… As of 6:00 a.m. CDT, December corn was up 1/2 cent, November soybeans up 2 3/4 cents and December HRW and SRW wheat futures markets were to 1 1/4 cents higher. The corn and soybean bulls were left for dead early last week but then posted good price recoveries the latter half of last week, to keep alive hopes that near-term market bottoms are in place. Last Wednesday’s upbeat post on U.S. soybeans by President Trump seemed to light a fire under not only soybean bulls but corn bulls, too. Trump and Chinese leader Xi Jinping meet in about three weeks. A positive outcome would likely give a big psychological boost to grain market bulls. Meantime, combines have been rolling in corn and soybean fields across the U.S. Midwest amid rapid harvest progress. That’s keeping commercial hedgers active sellers. Such will likely limit any price rallies in corn and soybeans to only modest ones. The key outside markets today see the U.S. dollar index sharply higher. Nymex crude oil prices are up and trading around $62.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.16 percent.
Cooler and rainy in the central U.S. early this week… The National Weather Service today said a strong cold front will stretch across the Midwest to southern Plains and will slowly march eastward over the next couple of days. Above average moisture is expected to provide potential for heavy rainfall across parts of the lower Mississippi Valley, Mid-South, and Lower Ohio Valley today into tonight. Some rain is forecast to stretch northward into the Great Lakes today. The potent cold front will be a dividing line between cooler-than-average temperatures to its west and warmer-than-average temperatures to its east. Unseasonably warm temperatures with highs in the 80s will be widespread today across portions of the Midwest into the Great Lakes. By Tuesday the Ohio Valley and Great Lakes should cool closer to normal behind the front. Meanwhile, below-normal temperatures (especially for highs) are likely across the Intermountain West, and the coolest anomalies of 15 to 25 degrees below normal are forecast for the central High Plains, where highs are forecast to only reach the 50s. On Tuesday the cool air should dive south a bit into the south-central Plains, with highs in the 60s. Chilly low temperatures have prompted freeze watches/warnings and frost advisories this morning scattered through the Intermountain West and north-central U.S., and freezing temperatures could remain a concern into Tuesday morning for parts of Wyoming into northwestern Colorado.
No signs U.S. government shutdown close to ending…U.S. House Republican leaders have told their members to stay away from Washington while the federal government is shut down. House Majority Whip Tom Emmer said House Republicans are ready to get back to work as soon as Chuck Schumer and Democrats in the Senate reopen the government, said Bloomberg in a report. “Prospects of a deal in the Senate anytime soon appear remote, with Senator Susan Collins saying it appears they’re not getting close on reopening the government,” said Bloomberg.
Safe-haven demand drives gold to record high, nearing $4,000… Gold prices rose sharply overnight to a record high of $3,973.70 an ounce, basis December Comex futures, as looming U.S. interest rate cuts and the prospect of a prolonged U.S. federal government shutdown boosted trader and investors demand for the yellow metal. Gold prices are up around 50% this year. Gold-backed exchange-traded funds swelled again last week, with private investors contributing to the latest leg in the rally and total holdings expanding the most in more than three years last month, according to Bloomberg.
French government turmoil continues… France’s markets tumbled today after the sudden resignation of French Prime Minister Sebastien Lecornu, with investors speculating that fresh elections are inevitable to solve the political crisis. The resignation is the latest step in a long-running political crisis in France, which has prompted the downfall of a number of prime ministers and roiled the nation’s assets. European stock markets sold off today and France’s stock market posted solid losses. The Euro currency sunk on the news. France’s credit rating has twice been downgraded since Lecornu took office, with Moody’s and S&P scheduled to next update their ratings on Oct. 24 and Nov. 28, respectively.
OPEC-plus agrees to modest production increase… Crude oil prices rallied after the OPEC-plus oil cartel agreed to raise its collective production by a modest amount, following some traders’ fears of a much larger increase. The Organization of the Petroleum Exporting Countries and partners backed a 137,000-barrel-a-day increase in production, well below some of the possible figures bandied about before the decision. Crude has fallen this year on concern worldwide output will top demand over the next few months, with the International Energy Agency forecasting a record annual surplus for 2026.
Malaysian palm oil futures start week on the downside… Malaysian palm oil futures on Monday fell for the second straight session, hovering below MYR 4,450 per MT, weighed by weaker soybean oil prices on the Chicago Board of Trade. Trading activity also remained subdued as the Dalian Commodity Exchange stayed closed for China’s Golden Week holiday until Oct. 8. Sentiment weakened further after reports showed palm oil imports from top buyer India dropped 15.9% in September to 833,000 MT, the lowest since May, with purchases likely to ease further to around 600,000 tons in October as festive demand peaks mid-month.
Choppy price action in cattle futures markets… The live and feeder cattle futures markets saw choppy trading last week. That’s not bullish given the stiff overhead technical resistance levels that could continue to keep the bulls tentative this week, especially with prices still historically elevated. Cash and beef market fundamentals have also eroded a bit the past couple of weeks. Cash cattle trading turned more active Friday as USDA today reported steers fetched an average price of $229.96 and heifers an average of $230.30. That compares to the prior week’s average cash cattle trade at $232.65.
Lean hog futures suffer technical damage… December lean hogs Friday saw a modest corrective bounce, but serious near-term technical damage was inflicted last week to suggest the speculative, chart-based bears will be pressing their case on the short side early this week. Bulls are hoping lean hog futures’ discounts to the cash hog index will limit selling interest in futures in the near term. Cash and pork market fundamentals have eroded recently. The latest CME lean hog index fell 56 cents to $103.70. Today’s projected cash index price is down another 86 cents to $102.84. The national direct five-day rolling average cash price today is $101.32.