Good morning!
Grain futures prices mixed overnight… As of 6:00 a.m. CDT, December corn was up 1/2 cent, November soybeans up 3 1/2 cents, and December HRW and SRW wheat futures markets were 2 1/4 to 2 1/2 cents lower. The corn market paused overnight after decent gains on Wednesday that gave the bulls a bit of momentum. However, December corn is still in a price downtrend on the daily chart. November soybeans have seen a minor bear flag pattern form on the daily chart. The $10.00 psychological support level will be key for the bulls to defend. Meal futures prices are up slightly on the week but meal bulls need to perform better in order to support any sustained price upside in soybeans. Winter wheat futures continue to struggle, with no strong, early chart clues that market price bottoms are close at hand. The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are firmer and trading around $58.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.024 percent.
Scattered showers in central U.S. today into Saturday… The National Weather Service today reports there is a chance of showers and thunderstorms over parts of the Plains and Upper Great Lakes today into Saturday. A front over the central/southern Rockies moves northeastward to the upper Great Lakes to the central Plains by Saturday. The front will produce showers and thunderstorms over parts of the northern/central Plains, the southern High Plains, the upper Mississippi Valley, and the Great Lakes today. As the front moves eastward on Friday, showers and thunderstorms move eastward over the upper Mississippi Valley/upper Great Lakes to the middle Mississippi Valley and the central/southern Plains and continue through Saturday. In addition, upper-level energy will create rain and higher-elevation snow over the Northern Rockies and the Great Basin on Thursday into Saturday.
U.S., China continue to posture on trade… U.S. Treasury Secretary Bessent said on Wednesday the possibility of extending a pause of import duties on Chinese goods for longer than three months exists if China halts its plan for strict new export controls on rare-earth elements. The U.S. and China have agreed to a series of 90-day truces, with the next deadline looming in November, and economists describe the latest moves by both sides as attempts to stack up bargaining chips ahead of a likely leaders’ meeting, according to a Bloomberg report. Bessent predicted a coordinated response to China’s move from the U.S. and several allies, saying “we’re going to have a fulsome, group response to this, because bureaucrats in China cannot manage the supply chain or the manufacturing process for the rest of the world.” Meantime, President Trump, when asked by a reporter if the world’s two largest economies are in for a sustained trade war if they cannot reach a trade deal, replied: “Well, you’re in one now.” He added, “We have a 100% tariff. If we didn’t have tariffs, we would be exposed as being a nothing.”
India’s P.M. Modi commits to halting Russian oil purchases… President Trump on Wednesday said Indian Prime Minister Narendra Modi vowed to halt purchases of Russian oil, signaling a possible resolution to an issue at the center of the diplomatic and trade rift between the U.S. and India, according to a Bloomberg report. India’s government didn’t confirm it’s complying with Trump’s demands, although it said it’s working to deepen energy ties with the U.S. Trump said Modi assured him that India will not be buying oil from Russia, which Trump called “a big step” and added that he now wants China to do the same thing.
Fed’s beige book: weaker U.S. consumer spending, rising prices… U.S. economic activity was little changed in recent weeks and employment levels held largely stable, according to the Federal Reserve’s “beige book,” released Wednesday afternoon. However, overall consumer spending edged lower, and prices continued to rise, with several districts reporting that input costs increased at a faster pace. The outlook for growth differed by district, with some contacts expecting a pickup in demand over the next six to 12 months, while others pointed to risks such as a prolonged government shutdown. Tariff-induced input cost increases were reported across many districts, but the extent of those higher costs passing through to final prices varied, the Fed said. Some businesses opted to keep selling prices largely unchanged to retain customers, while others fully passed on higher import costs to consumers.
U.S.’s busiest seaport sees lower imports… The flow of imports at the Port of Los Angeles, the U.S.’s busiest seaport, dropped for a second month in September. The flow of imports dropped for a second month in September even as the total volume hit a record high in the third quarter, as U.S. businesses continue to navigate volatile U.S. trade policy, Bloomberg reported. Cargo handlers at the nation’s busiest port closed out the third quarter with 2.9 million TEUs, or twenty-foot equivalent units, beating the record set in the same period last year. Volumes are expected to slow in the coming months as U.S. tariffs bite into profit margins and impact consumer prices, and uncertainty over the U.S.-China trade war increases. “We’re past peak season and expect to see cargo volume soften over the last three months of the year,” Port of Los Angeles Executive Director Gene Seroka told reporters Wednesday. “And of course, ongoing turbulent negotiations with our largest trading partner could intensify that decline.” The Port of L.A. processed some 883,000 container units in September, according to port data. About 460,000 of those TEUs were loaded with imports, an 8% decline compared to September last year. Exports made up nearly 114,700 TEUs last month — almost identical to the same month last year, said the Bloomberg report.
You’re going to pay more for electricity this winter… U.S. households will see their winter electric bills climb by the most in three years, according to the Energy Information Administration. Average residential consumers are poised to spend $1,130 on electricity this year, a 4% increase from 2024, the agency said in its winter fuels outlook and as reported by Bloomberg. The jump is almost entirely the result of higher retail power prices, as the cost of heating fuel is seen declining this winter. Utility bills across the country have already been on the rise as the proliferation of AI data centers fuels a demand surge that’s raising prices for all consumers. In some regions, the cost of rebuilding infrastructure after extreme weather events is also driving up expenses.
Malaysian palm oil futures gain… Malaysian palm oil futures on Thursday hovered near MYR 4,500 per MT, rising for the second session amid firmer rival edible oils on the Dalian and Chicago exchanges and a rebound in crude oil prices. Sentiment was also lifted by signs of strong demand, with cargo surveyors noting that exports of Malaysian palm oil products during Oct. 1–15 rose between 12.3% and 16.2% from September. Broader market tone improved after U.S. Treasury Secretary Bessent signaled the possibility of extending a pause on import duties on Chinese goods if Beijing drops plans for new export controls on critical materials, easing trade concerns. Additional support came from top producer Indonesia’s efforts to regulate crude palm oil exports to secure supply for its biodiesel program.
Cattle futures markets pause… The live and feeder cattle futures markets on Wednesday saw some routine profit-taking pressure early on after hitting contract highs on Tuesday. However, both markets rebounded late in the session to erase most or all of their losses. Price-friendly supply and demand fundamentals in the cash cattle and beef markets, as well as still-bullish charts, will likely continue to keep a floor under the futures markets. However, the cattle futures markets are still short-term overbought, technically, and due for stronger corrective price pullbacks.
USDA at mid-week reported very light cash cattle trade at $236.00. Cash cattle trade last week averaged $234.07, up $3.31 from the prior week average.
Lean hog futures suffer amid weak cash market… The lean hog futures market on Wednesday saw some short covering after hitting a seven-week low Tuesday. Gains will continue to be limited by the still-bearish near-term technical posture and falling cash hog prices. The latest CME lean hog index is down another 58 cents at $97.99. Wednesday’s projected cash hog index is down another 79 cents at $97.20. Today’s national direct 5-day rolling average cash hog price quote is $95.95.