Good morning!
Grain futures prices narrowly mixed overnight… As of 6:00 a.m. CDT, December corn was up 1/2 cent, November soybeans up 2 1/4 cents and December HRW and SRW wheat futures markets were 1/4 cent lower. Corn and soybean market bulls continue to hang tough right in the teeth of harvest pressure that sees increased commercial hedge selling in both markets. Soybean meal is losing a bit of steam, which is worrisome to the bean bulls. Winter wheat futures markets remain trapped in near-term price downtrends and are not far above their recent contract lows. The key outside markets today see the U.S. dollar index higher. The USDX has been boosted this week as the Euro currency slumps amid the French political crisis currently playing out. Nymex crude oil prices are near steady and trading around $61.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.16 percent.
Some frost and freezes possible in upper Midwest… The National Weather Service reports that some freeze warnings and frost advisories are in place for parts of the north-central U.S. this morning, with some in Minnesota and Wisconsin lasting through Wednesday morning. Highs are forecast to only be in the 60s as far south as the Oklahoma and Texas Panhandles today, which are around 15 to 20 degrees below average. Cooler temperatures will start to moderate closer to average temps in the central U.S. by Wednesday.
Trump shows signs of compromise on ending government shutdown, then backs off… President Trump Monday sent mixed messages about the state of talks with Democrats regarding the U.S. government shutdown. Trump, who had remained on the sidelines for days, said he was open to negotiating with Democrats over health care subsidies to bring an end to the shutdown, at one point suggesting those talks had already begun, according to a Bloomberg report. Trump’s comments appeared to mark a shift after Republicans said they would only consider a possible extension of Obamacare subsidies after Democrats first passed legislation to fund the government. Senate Democratic Leader Chuck Schumer issued a statement saying that while no talks were ongoing, “if he’s finally ready to work with Democrats, we’ll be at the table” Hours later, Trump seemed to retreat. “I am happy to work with the Democrats on their Failed Healthcare Policies, or anything else, but first they must allow our Government to re-open,” Trump wrote in a social media post. The comments from both sides marked the first sign of movement after days of inaction to reopen the government.
U.S. Treasury market volatility level collapses amid U.S. government shutdown… Expected volatility in the U.S. Treasury markets has sunk to the lowest level in almost four years due to the U.S. government shutdown, according to a Bloomberg report. “The government shutdown has delayed key U.S. economic data releases, depriving traders of catalysts for large price swings, and is expected to leave investors uncertain of the performance of the real economy. The absence of official government data may lead to a period of consolidation in the U.S. rates market, but a surprise quick resolution of the shutdown could result in a spike in implied volatility,” said the Bloomberg story.
Pro Farmer crop consultant slightly lowers U.S. corn crop yield estimate… Longtime Pro Farmer crop consultant Michael Cordonnier this week has lowered his 2025 U.S. corn yield by 1.0 bushel to 181.0 bu/ac, with a neutral-to-lower bias. USDA did not release its weekly Crop Progress and Crop Condition reports this week due to the U.S. government shutdown, but the summer-like weather across the Midwest is accelerating the crop dry-down and early harvesting. “Corn yields continue to be variable, depending on how much the corn was impacted by southern rust. We will not know the final corn yield until the harvest is complete, but the storyline of the 2025 U.S. corn crop is going to be the impact from southern rust,” said Cordonnier. His 2025 U.S. soybean yield forecast was left unchanged this week at 52.0 bu/ac, with a neutral-to-lower bias.“It is probably too dry in some areas, resulting in soybean seed moisture below 10%.When soybeans are extra dry at harvest, there can be a higher level of harvest loss due to increased shattering and splitting of soybeans that are subsequently blown out the back of the combine,” he said.
U.S. farmers may find out more about aid programs today… President Trump is considering a large aid program for U.S. farmers and more specifics may come today. The Trump administration is reportedly evaluating how money made from tariffs could supplement farmer payments. Presently, details about the aid programs are scarce, though Treasury Secretary Scott Bessent told CNBC last week that information regarding “substantial support” for farmers would be released today. Trump told reporters in the Oval Office last Thursday his administration will provide “some of that tariff money” to farmers, “who are, for a little while, going to be hurt until the tariffs kick in to their benefit.”
Australian wheat crop production trimmed by dry weather… A dry spell in Australia is taking the edge off of a bumper wheat harvest, trimming supplies from one of the world’s largest exporters, according to a Bloomberg report. Precipitation in September, a key phase for the crop’s development, was lower than normal in the southeastern states of Victoria and South Australia, according to Bureau of Meteorology data. South Australia received less than 10 millimeters (0.4 inches), half the historical average. The southeastern states account for about a quarter of Australia’s annual harvest, and both are coming out of years of severe drought. Heavy rain in winter months had raised hopes for a strong harvest. Victoria and South Australia were expected to collect about 8.2 million MT. “I think there will be some cuts to production estimates, if they haven’t already been made, in the next month or so,” said James Maxwell, agribusiness senior insights manager at Bendigo Bank, in an interview with Bloomberg. “Between South Australia and Victoria, I’d say we could see easily half-a-million MT, up to a million, if it was really bad.”
Argentine government selling greenbacks to prop up its peso… Argentina’s government sold U.S. dollars in the foreign-exchange market for a fifth straight session on Monday to stem a slide in the Argentine peso. Its central bank sold between $450 million and $480 million at around 1,430 pesos per dollar, weakening the peso 0.4% to close at that level. President Javier Milei’s administration has sold an estimated $1.3 billion since last Tuesday, depleting the Argentine treasury’s already thin cash position, reported Bloomberg. “The sales underscore the pressure on the peso, even after the U.S. pledged assistance and local authorities reintroduced capital controls in recent weeks, including a 90-day ban on reselling dollars. Argentine Economy Minister Luis Caputo and Central Bank President Santiago Bausili traveled to Washington on Friday for talks with US Treasury Secretary Scott Bessent and the IMF,” said the Bloomberg report.
Hedge fund manager Paul Tudor Jones: Watch out for “blow-off” top in U.S. stock market… The famed commodity trader and founder of Tudor Investment told CNBC Monday that he believes the conditions are set for a powerful surge in U.S. stock prices before the bull market tops out. “My guess is that I think all the ingredients are in place for some kind of a blow off,” Jones said Monday on CNBC’s Squawk Box. “History rhymes a lot, so I would think some version of it is going to happen again. If anything, now is so much more potentially explosive than 1999.” Jones said today’s market is reminiscent of the setup leading up to the burst of the dot-com bubble in late 1999, with dramatic rallies in technology shares and heightened speculative behavior. Jones said the circular deals or vendor financing happening in the artificial intelligence space today also make him nervous. The technology-heavy Nasdaq composite index has rallied 55% from its April bottom to record highs.
Malaysian palm oil futures gain… Malaysian palm oil futures rose modestly Tuesday, hovering around MYR 4,450 per MT after two sessions of losses, supported by firmer rival oils on the Chicago exchange. Meanwhile, September export estimates pointed to notable growth, with cargo surveyors reporting shipments rose 7.3–9.6% from August. On inventories, Reuters projected Malaysia’s stockpiles fell 2.5% to 2.15 million tons last month. However, further gains were limited by a stronger ringgit and the Dalian market closure until Oct. 8 for the Golden Week, while traders cautiously awaited monthly data from the Malaysian Palm Oil Board, due later this week. In India, the world’s largest palm oil consumer, purchases tumbled 15.9% in September to 833,000 tons, the lowest since May, and demand may fall further to around 600,000 tons in October as festive buying peaks mid-month.
Cattle futures bulls continue to show resilience… The live and feeder cattle futures markets posted solid gains Monday as the bulls showed they still have staying power as they posted good gains for a second session in a row. However, the road gets tougher for the bulls today as solid technical resistance levels now lie just above present prices. USDA Monday reported cash cattle trading last week averaged $230.76. That’s down $1.89 from the prior week’s USDA reported average of $232.65.
Lean hog futures bulls pause to start the trading week… The lean hog futures bulls are working to stabilize prices after last week’s downdraft that produced near-term technical damage to suggest a market top is in place. Bulls are hoping lean hog futures’ discounts to the cash hog index will limit selling pressure in futures. Cash and fresh pork fundamentals have been weakening. The latest CME lean hog index is down 86 cents at $102.84. Today’s projected cash hog index is down another 82 cents at $102.02. Monday’s national direct 5-day rolling average cash hog price quote is $100.72.