Good morning!
Grain futures prices mixed overnight… As of 6:00 a.m. CDT, December corn was up 1/4 cent. November soybeans were up 4 1/2 cents and hit a four-week high. December HRW and SRW wheat futures markets were 1/4 to 3/4 cents weaker. The corn and soybean market bulls have some technical momentum on their side early this week. The winter wheat futures markets still can’t get much upside traction. The key outside markets today see the U.S. dollar index a bit firmer. Nymex crude oil prices are modestly up and trading around $58.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.97 percent.
Cool, wet and windy weather over much of the upper Midwest… The National Weather Service today reports a twin low-pressure system centered near the Canadian border this morning will be preceded by a swath of rain pivoting across the central Great Lakes early in the morning. Behind this system, blustery northwesterly winds will make for a windy day today across the northern Plains with passing showers. A cold front trailing from the twin system will bring some showers and thunderstorms across the Deep South today. Colder and drier weather along with gusty winds will expand from the Midwest and Ohio Valley into the Mid-Atlantic on Wednesday as chilly and showery weather persists across the Great Lakes into Thursday.
U.S. corn harvest near half-done, soybeans getting closer to winding down… According to a Reuters poll of 10 analysts, the U.S. corn harvesting progress has lagged behind last year’s pace. On average, the analysts estimated 44% of the U.S. corn crop had been harvested as of last Sunday, with estimates ranging from 35% to 55% complete for corn. Those estimates align with Pro Farmer’s recent survey of its members that found 43% of corn harvest was wrapped up and 80% of soybean harvest was complete as of the middle of last week. Pro Farmer’s numbers were derived largely from its members in the seven Crop Tour States in the Corn Belt – although data from other areas was consistent with the overall trend.
Could China squeak by and not purchase any U.S. soybeans?... That’s a sub-headline from Pro Farmer crop consultant Michael Cordonnier in his weekly report. “China has yet to book any new-crop soybeans from the U.S. at a time when they normally would have booked 10-15 million tons.This is obviously part of their negotiation strategy with President Trump concerning the current trade war.After the trade dispute during the first Trump administration, China decided to diversify its soybean purchases by turning more to Brazil for their soybeans and they never looked back.Brazil for its part continued to expand its soybean acreage in anticipation of increased demand from China. During the 2019/20 growing season, Brazil produced 128.5 million tons of soybeans (USDA estimate).During the current 2025/26 growing season, Brazil is expected to produce 175.0 million tons of soybeans (USDA estimate).Therefore, there are potentially 46-47 million tons more of soybeans available to purchase in Brazil compared to six years ago,” said Cordonnier. “In my humble opinion, China will probably purchase a limited amount of U.S. soybeans as part of its bargaining strategy with President Trump.How much is an open question.If they wanted to continue playing “hard ball”, they probably could use their reserves until the new crop is available in Brazil and not purchase any U.S. soybeans.Time will tell what they decide.”
U.S., Australia team up on rare earths to compete against China… President Trump on Monday signed a landmark pact with visiting Australian Prime Minister Anthony Albanese to boost U.S. access to rare earth minerals and other critical minerals in an effort to counter China’s tight grip on the supply chains of key metals. The two governments will jointly invest in a swath of mines and processing projects in Australia to boost production of commodities used in advanced technologies from electric vehicles to semiconductors and fighter planes. Australia has an $8.5 billion “pipeline that we have ready to go,” Albanese said at a meeting between the two leaders at the White House and as reported by Bloomberg. “In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said. The U.S. has been locked in a rare-earths competition with China since Beijing fought back against Trump’s trade offensive earlier this year, imposing export curbs on the materials. It has since expanded those restrictions.
Shipping backing up in China; commodity supply chain disruptions possible… Waiting times for commodity vessels stacking up off China’s ports increased to the longest this year, as the geopolitical sparring between Beijing and Washington disrupts global trade, reported Bloomberg today. It took an average of 2.66 days for a vessel to get into a berth after arrival in the week to Oct. 19, according to Bloomberg calculations based on data from ship-tracking platform Kpler. That’s an increase of 17% week-on-week and the longest period this year, the calculations show. “China is the world’s largest commodity importer, and vessel snarls — if prolonged — could ripple through the global supply chain, affecting liquid cargoes such as crude, as well as bulks like iron ore. Beijing and Washington have sparred over shipping, with China introducing a hefty extra fee on vessels known to have American links, following a similar U.S. move,” said Bloomberg.
Crude oil prices steady overnight, after hitting 5.5-month low Monday… Nymex crude oil futures traded near steady overnight, around $57.75 a barrel, after dropping to a 5.5-month low Monday as traders weighed signs of a swelling surplus ahead of trade talks between the U.S. and China. The amount of crude on tankers at sea has risen to a record high as producers keep adding barrels, according to data from Vortexa and reported by Bloomberg. The International Energy Agency is projecting a record crude oil surplus next year as the OPEC-plus alliance and producers from outside of the group ramp up output. “We’ve got supply growth running three times faster than demand growth,” Bob McNally, founder and president of Rapidan Energy Group, said in an interview on Bloomberg Television. “Near-term we have a glut.” Down-trending crude oil prices are a bearish outside-market element for the ag futures markets, as crude is considered the leader of the raw commodity sector.
Extreme daily price volatility hits gold, silver futures markets… Would-be bargain hunters were featured in gold and silver Monday as they stepped in to buy last Friday’s big price dips. Gold futures notched a record high of $4,398.00 an ounce Monday. However, both metals were sharply lower overnight, with gold down $90 and silver losing $2.50 an ounce and trading back below the key $50.00 level. Daily price volatility in gold and silver futures markets has turned extreme. This is not bullish and suggests, at most, a climaxing phase of the major bull market runs. And, at least, it suggests an unknown time period of choppy, highly volatile trading that could drive away both speculative bulls and bears in the gold and silver futures markets, for fear of getting whipsawed. Commodity market traders are keeping a closer eye on the gold and silver markets this week. Their extreme price volatility could spill over into some higher price volatility in other futures markets, including the grains.
Malaysian palm oil futures rally after Monday holiday… Malaysian palm oil futures on Tuesday jumped nearly 1% to around MYR 4,560 per MT, reversing prior-session losses as trading resumed after a long weekend. Gains were supported by stronger rival oils on the Dalian and Chicago exchanges and rising export estimates. Cargo surveyor Intertek Testing Services reported that Malaysian palm oil shipments for October 1–20 rose 3.4% from the same period in September. Positive sentiment was also bolstered by U.S. President Trump signaling a potential “fair trade deal” with China’s Xi Jinping and White House expectations that the government shutdown could end this week. Offsetting some strength was high Malaysian stocks, with end-September inventories up 7.2% from August to 2.36 million MT, the highest in almost two years. Meanwhile, India, the world’s largest palm oil importer, reduced palm oil purchases by 16.3% in September, the lowest level since May, as refiners turned to cheaper soyoil.
Cattle futures markets stabilize… The live and feeder cattle futures markets bulls stabilized prices Monday, following last Friday’s shellacking that came after President Trump said he is working on lowering beef prices. Trump over the weekend said the U.S. may purchase beef from Argentina to lower U.S. beef prices at the meat counter. Key for the cattle futures markets early this week will be to limit strong selling pressure and start to build a near-term price base again. Monday was a good start. Price action today and Wednesday will be extra important from a technical perspective. USDA Monday reported last week’s average cash cattle trade at $239.82, well up from the week-prior average of $234.07.
Lean hog futures market still weighed down by bearish charts… Bearish near-term technicals and still-declining cash hog prices are limiting buying interest in lean hog futures, despite December futures’ discount to the cash market. The latest CME lean hog index is down another 47 cents at $96.12. Today’s projected cash hog index is down another 54 cents at $95.58. Monday’s national direct 5-day rolling average cash hog price quote was $93.75.