Good morning!
Grain futures narrowly mixed overnight… As of 6:00 a.m. CDT, December corn was down 1 cent. January soybeans were 1/4 cent lower and hit a five-week high overnight. December HRW and SRW wheat futures markets were steady to up 1 1/4 cents and hit three-week highs overnight. The grain market bulls have had a good week, so far, and they could add some frosting by producing technically bullish weekly high closes today. Improving technical charts and more upbeat rhetoric from the U.S. and China this week, regarding their trade negotiations, has the grain market bulls more active late this week. The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil prices are near steady and trading around $61.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.00 percent.
Midwest cool and dry, southern Plains to get a soaking… The National Weather Service today said showers and thunderstorms are expected to not only continue but expand in coverage Friday ahead of a system moving into the southern Plains. Plentiful moist Gulf return flow will help to fuel heavy downpours with rain rates as high as 2" per hour. Elsewhere, lake-effect showers will continue downwind of Lakes Erie and Ontario Friday as cool post-frontal northwesterly flow moves over the warmer lake waters. The rest of the country will be mostly dry. Temperature-wise, conditions will remain around or a bit below average from the Great Lakes/Ohio Valley to the East Coast following a cold front passage. Widespread lows in the lower to mid-30s Friday morning have prompted frost and freeze-related advisories and warnings from the Great Lakes/Ohio Valley to the Mid-Atlantic. Cooler air lingering north of the upper-low over the southern Plains will keep conditions cool throughout the central Plains to Mississippi Valley with highs in the 50s and 60s here as well. An upper-level ridge expanding northward from the interior West into the northern Plains will bring well above average highs, particularly for the northern tier locations, with 60s and even some 70s possible.
Trump terminates trade talks with Canada over negative U.S. tariffs ad… President Trump said on Truth Social late Thursday he would immediately halt all trade negotiations with Canada, citing a Canadian advertisement against his signature tariffs plan featuring the voice of former President Ronald Reagan. The ad, funded by the government of Ontario, uses excerpts from an address Reagan gave in 1987 in which he defended the principles of free trade and slammed tariffs as an outdated idea. Trump’s announcement injected fresh uncertainty into one of the world’s largest bilateral trading relationships, with the U.S. and Canada exchanging more than $900 billion in goods and services last year. “TARIFFS ARE VERY IMPORTANT TO THE NATIONAL SECURITY, AND ECONOMY, OF THE U.S.A.,” Trump wrote. “Based on their egregious behavior, ALL TRADE NEGOTIATIONS WITH CANADA ARE HEREBY TERMINATED.” Funded by the government of Ontario, the ad seeks to sow doubt among Republican voters by using one of the party’s most iconic voices, reported Bloomberg.
U.S. consumer price index on deck this morning… The marketplace today gets its first piece of major U.S. government economic data in three weeks: the consumer price index report for September. CPI is seen coming in at up 3.1%, year-on-year, compared to the August report that showed a 2.9% annual rise. The core CPI (excluding food and energy) is seen coming in at up 3.1% in September, annually, which would be unchanged from the August core reading. The marketplace generally believes even a hotter-than-expected CPI print today would not dissuade the Federal Reserve from cutting U.S. interest rates by 0.25% at next week’s FOMC meeting.
China trade officials upbeat on reaching trade deal with United States… China’s Commerce Minister struck an optimistic tone on talks with the U.S., saying Beijing and Washington can find solutions ahead of key trade negotiations between the two countries. “The economic and trade consultations between China and the U.S. fully demonstrate that based on mutual respect and equal consultation, China and the U.S. can find solutions to address each other’s concerns,” Commerce Minister Wang Wentao said during a briefing on China’s next five-year plan and as reported by Bloomberg. Wang also reiterated that China opposed decoupling and disrupting supply chains. Chinese Vice Premier He Lifeng — the country’s top trade negotiator — is scheduled to meet with U.S. officials including U.S. Treasury Secretary Scott Bessent in Kuala Lumpur today through Monday for the next round of trade talks. They are setting the stage for scheduled talks between Chinese President Xi Jinping and President Trump next Thursday on the sidelines of the Asia-Pacific Economic Cooperation leaders summit in South Korea.
China to seek high-quality economic growth… China will seek to maintain a certain rate of growth and expand consumption’s share of the economy as authorities draft the next five-year development blueprint, a senior official said and as reported by Bloomberg. The aim is to achieve high-quality growth where the expansion is kept within a “reasonable range” and the share of household consumption “rises significantly,” Han Wenxiu, deputy director in charge of daily work at the Office of the Central Financial and Economic Affairs Commission, said at a briefing Friday. The briefing followed a four-day conclave of ruling Communist Party’s elites to approve the outlines for drafting China’s economic plan for the 2026-2030 period. Beijing is signaling a determination to deepen its manufacturing and tech push as it looks to maintain competitive advantages. Boosting the domestic market has become also more urgent to maintain sustainable growth amid rising global trade protectionism.
Mexico’s ag minister coming to U.S. in bid to reopen U.S. border to Mexican cattle… Mexico’s agriculture minister will travel to Washington, D.C. next week with the aim of reaching an agreement on the reopening of the border to Mexican cattle amid an outbreak of the flesh-eating screwworm parasite, President Claudia Sheinbaum said on Thursday and as reported by Reuters. Mexican Agriculture Minister Julio Berdegue will meet with U.S. Secretary of Agriculture Brooke Rollins to discuss plans for the border, which the U.S. has kept closed to Mexican cattle imports since May. “We hope he can return with an agreement on the border opening,” Sheinbaum said in her regular press conference. Rollins has publicly criticized Mexico’s response to the outbreak. Mexico confirmed its first cases of screwworm infections in animals in the state of Nuevo Leon, which borders the U.S., in recent weeks but has said they were contained and resolved.
Gold prices poised to end nine-week winning streak… Gold prices fell below $4,100 per ounce today and are on track to end a nine-week winning streak, pressured by heavy selling after repeatedly hitting record highs in recent sessions. The metal dropped more than 5% early in the week, marking its largest intraday loss in five years. The decline coincided with significant withdrawals from gold-backed ETFs, which saw their largest single-day drop in holdings by tonnage in five months. Still, gold remains up about 55% year-to-date, supported by ongoing trade tensions, with focus on trade talks next week between President Trump and Xi. Geopolitical risks also persisted after the U.S. imposed new sanctions on Russia in an attempt to pressure Moscow for a Ukraine ceasefire.
Malaysian palm oil futures dip to end trading week… Malaysian palm oil futures hovered below MYR 4,450 per MT Friday, reversing modest gains from the previous session amid a stronger ringgit and weakness in soyoil prices on the Dalian and Chicago exchanges. The contracts were on track for a second consecutive weekly decline, down about 1.6% so far, as traders remained concerned that uncertain demand and unpredictable weather could affect production in the first quarter of 2026. Losses were partly cushioned by reports that top grower Indonesia plans to mandate a 10% bioethanol blend in gasoline by 2027, aiming to reduce its fuel import dependence. Meanwhile, the Malaysian Palm Oil Council said that crude palm oil prices are likely to stay above MYR 4,400 heading into 2026 amid mixed trends in palm and soybean oil exports.
Cattle futures bulls may now be running out of gas… The live cattle futures market Thursday saw a corrective bounce from Wednesday’s strong selling pressure. Feeder cattle futures Thursday saw follow-through selling pressure from Wednesday’s limit-down trade. Recent price action in the cattle futures markets suggests the bulls are running out of gas, especially feeder cattle futures. Cattle futures traders have mostly digested the latest Trump administration news on U.S. beef. The administration plans to quadruple Argentine beef imports into the U.S. to 80,000 MT to try to reduce beef prices at the meat counter. USDA issued a press release Wednesday afternoon, announcing a “suite of actions” to strengthen the American beef industry, reinforcing and prioritizing the American rancher’s critical role in the national security of the United States. USDA at midday Thursday reported more active cash cattle trade, averaging $239.34 for steers and averaging $239.09 for heifers. USDA said last week’s average cash cattle averaged $239.82.
Lean hog futures hit two-month low… The lean hog futures market saw more technical selling pressure Thursday. Bearish technicals and steadily declining cash hog market prices are prompting selling in hog futures. Wobbly cattle futures markets this week are also bearish for hog futures. The latest CME lean hog index is down another 80 cents at $94.18. Today’s projected cash hog index is down another 55 cents at $93.63. Thursday’s national direct 5-day rolling average cash hog price quote is $89.17.