Good morning!
Follow-through gains in grains overnight… As of 6:00 a.m. CDT, December corn was up 2 1/4 cents and hit a four-month high. January soybeans were 11 1/4 cents higher and hit a 12-month high overnight. December HRW and SRW wheat futures markets were up around 5 cents and hit six-week highs overnight. Good follow-through buying strength was featured in the grains overnight. The technical chart postures for the grains have improved markedly the past couple weeks, which are inviting the technical speculators to play the long sides of the markets. This comes amid the positive fundamental backdrop of improving U.S.-China trade relations and a summit meeting on Thursday between Presidents Trump and Xi Jinping, to hopefully seal the deal. The key outside markets today see the U.S. dollar index modestly down. Nymex crude oil prices are lower and trading around $60.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.97 percent.
Wetter and cooler weather in the central United States… The National Weather Service today said an upper-level trough and accompanying surface cold front will initially bring shower and thunderstorms chances to the Upper Midwest southward through the Missouri Valley and into portions of the adjacent Plains today. Then into the overnight hours reinforcing upper energy will dig the trough deeply southward and help to organize/reinforce a low pressure/frontal system in the Middle/Lower Mississippi Valley. Shower and thunderstorm coverage will expand overnight in vicinity of the low and the trailing cold front, with some locally heavy rainfall possible particularly across the Mid-South. The system will continue eastward Wednesday with widespread showers and thunderstorms spreading into the Ohio and Tennessee Valleys and central/southern Appalachians. Temperatures will be cool and well below average for much of the eastern/central U.S. in the coming days.
Fed’s FOMC meeting begins today… The Federal Reserve’s Open Market Committee meeting begins this morning and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. The FOMC is widely expected to deliver a second straight 0.25% interest-rate cut to boost the U.S. job market. Fed policymakers are divided, however, with some worrying that cutting rates will go too far and others supporting even further reductions, all amid the lack of U.S. government economic data releases during the federal government shutdown.
U.S. Senate committee hearing today on “pressure cooker” issues in U.S. seed, fertilizer industries... The U.S. Senate Committee on the Judiciary is holding a hearing today entitled, “Pressure Cooker: Competition Issues in the Seed and Fertilizer Industries.” The hearing will focus on concerns that consolidation in the U.S. seed and fertilizer industries contributes to higher input costs for farmers who are already dealing with low ag commodity prices. Critics, including Iowa Senator Chuck Grassley, have long raised concerns that a handful of companies have a disproportionate amount of market power in the two industries. By 2017, just four companies controlled 80% of the U.S. corn seed market and 75% of the soybean seed market, a result of intellectual property expansion and industry mergers. The situation puts smaller U.S. farmers at a disadvantage, as they struggle to compete with larger agribusinesses on price and may not have access to the same credit or competitive offerings.
Amazon to cut 14,000 jobs… Amazon.com Inc. said it is cutting about 14,000 jobs in a major restructuring, according to Bloomberg. The positions will be eliminated across the corporate workforce, Beth Galetti, senior vice president of people experience and technology at Amazon said today in a blog post. “The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.” The terminations could affect as many as 30,000 jobs, Reuters reported on Monday, citing people familiar with the matter. The online retailer and cloud computing provider, which employed 1.55 million people globally as of June 30, on Thursday is scheduled to report its third-quarter earnings.
Trump hails U.S.-Japan trade agreement… President Trump visited Japan today, touting the U.S.'s alliance with the Asian nation and praised new Prime Minister Sanae Takaichi on her plans to increase defense spending. Trump and Takaichi signed documents on trade and critical minerals, but the agreements remained non-specific, with the trade document noting “swift and continued efforts” and the critical minerals pact pledging to coordinate on permitting, financing, and mapping. Trump and China President Xi Jinping are scheduled for a highly anticipated summit meeting in South Korea on Thursday.
U.S. stock indexes at record highs; bulls see more upside… ”Equity bulls are lining up to wager the S&P 500 will surge past 7,000 now that it looks as if a seasonal bout of volatility has passed,” said a Bloomberg report today. The index powered to a record 6,875.00 Monday, buoyed by positive signs on trade, expectations for a U.S. interest rate cut and strong corporate earnings. “With that macro backdrop in place, bulls are pointing to other factors that can take the index past the psychologically important 7,000 level. Fund flows show retail and institutional investors pouring into the market, while technical analyses show little resistance ahead of the round-number milestone. In a seasonal quirk, the current week stands out as the best for stocks over the past 75 years,” said Bloomberg.
China aims to boost domestic consumption… China has pledged to significantly boost the share of consumption in its economy in the next five years, as it looks to build an economy less reliant on trade, said a report from Bloomberg. The Communist Party made the pledge today in a detailed communique that followed its fourth plenum held last week in Beijing. China will “form an economic development model driven more by domestic demand and powered by consumption,” it said in the document that lays out basic principles for the next five-year plan, which starts in 2026. To achieve that, the world’s second-largest economy will make use of policies including those related to industry, prices, employment, consumption, investment and environment and trade, according to the readout. At the same time, China pledged to “maintain reasonable growth” in investment, another driver of domestic demand. The document adds details to a brief communique released last week, which underlined a continuing focus by China on technological self-reliance. It also reiterated a pledge to bolster the domestic market, as officials look to insulate the Chinese economy from foreign pressures.
Malaysian palm oil futures extend losses… Malaysian palm oil futures today fell below MYR 4,350 per MT, extending losses for the third straight session to hit a four-week low. The bearish momentum was driven by weaker Dalian and Chicago edible oil markets and a stronger ringgit. Meanwhile, export estimates softened, with October 1–25 shipments down between 0.3–0.4% month-on-month, according to cargo surveyors. Sentiment was further pressured by concerns over global demand and unpredictable weather that could impact output in early 2026. Cheaper crude oil also dampened palm oil’s attractiveness as a biodiesel feedstock. Losses were partially offset by optimism surrounding a potential U.S.-China trade deal, with Presidents Trump and Xi Jinping expected to meet later this week at the APEC summit in South Korea. Meanwhile, in top producer Indonesia, plans to introduce an E10 ethanol blend by 2027–2028, gradually moving to E20, could boost domestic palm oil use in biodiesel, highlighting long-term regional demand support.
Cattle futures markets bulls abandoning ship… December live cattle on Monday fell $6.75 to $227.175 and hit a three-month low after trading down the expanded trading limit earlier in the day. January feeder cattle dropped the expanded daily trading limit of $13.75 to $334.425 and hit a 2.5-month low. Panic long liquidation and margin-call selling by the speculative futures traders were featured in the live and feeder cattle futures markets Monday. This follows news last week that President Trump has vowed to lower U.S. beef prices at the meat counter. Meantime, Mexico’s agriculture minister will travel to Washington D.C. this week to work on an agreement to reopen the U.S. border to Mexican cattle supplies. USDA at midday Monday reported the average cash cattle trade last week was $237.89. That’s down $1.93 from the week prior average of $239.82.
Lean hog futures market remains in downtrend… December lean hogs on Monday fell 40 cents to $81.50 and hit a 2.5-month low. The lean hog futures market saw mild technical selling pressure Monday. Bearish technicals and steadily declining cash hog market prices are prompting selling in hog futures. Lean hog bulls were encouraged by the fact hog futures prices are remaining fairly stable amid the huge price downdrafts in the cattle futures markets. December lean hog futures’ discount to the cash index has limited selling interest in futures lately. The latest CME lean hog index is down another 55 cents at $93.63. Today’s projected cash hog index is down another 68 cents at $92.27. Monday’s national direct 5-day rolling average cash hog price quote is $88.93.