Good morning!
Grain prices lower overnight… As of 6:00 a.m. CDT, December corn was down 1 3/4 cents, November soybeans down 5 cents and December winter wheat futures markets were 5 to 6 cents lower. Looming harvests of big U.S. corn and soybean crops appear to be hanging over the grain futures markets at present. It could be that the fate of the grain futures markets in the coming weeks could hinge, at least in part, on whether corn prices are stronger than soybean meal is weaker and pull meal up, or if meal prices are weaker than corn is stronger and pull corn prices down. Whichever trend wins out, the grain markets could well follow that trend at least until harvests are in full swing. Late this week it appears soybean meal is winning that race. The key outside markets today see the U.S. dollar index slightly firmer. Nymex crude oil prices are lower and trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.21 percent.
Midwest weather late this week may be even colder than earlier forecast… World Weather Inc. said Wednesday afternoon in a special report that “evidence continues to build over the potential for this week’s frost and freezes in the north-central United States and neighboring areas of Canada to be greater than advertised. There is a growing potential for more broad-based frost to occur from Saskatchewan, eastern Alberta and Manitoba, Canada into the northern U.S. Plains and upper Midwest. Predicted temperatures (from some models) may not be cold enough, and the impact on crops may end up being greater than expected.” There has been a trend in computer forecast model runs this week for the cold air advertised for late this week and into the weekend to be more broad-based and intense than that advertised earlier this week and especially relative to that of last week. Originally, the forecast models were predicting just one surge of cold air into Canada and the north-central United States, with a quick return of warmer weather. “The three shots of cold will prevent the cold air from moderating and becoming less threatening to crops in the United States. Pooling of cool air over Canada’s central and eastern Prairies will become significant enough by this weekend to force colder air into the north-central United States. That will lead to much higher risk of broad-based frost in North America and the cold impact may be greater than expected.Freezes are now becoming more likely in Saskatchewan, Manitoba, North Dakota, Minnesota, northern Wisconsin and upper Michigan. Most of the hard freezes should stay in Canada while most freezes in the U.S. will be lighter and briefer in duration. “Summer crops are not fully mature in these areas and that raises the potential for crop damage,” said World Weather.
Fed’s beige book shows little change in U.S. economy… The Federal Reserve’s beige book, released Wednesday afternoon, said U.S. economic activity saw “little or no change” across most of the country in recent weeks. Fed contacts reported flat to declining consumer spending because wages were failing to keep up with rising prices, and every region saw price increases. Eleven districts described little or no net change in overall employment levels, while one district described a modest decline. “Nearly all districts noted tariff-related price increases, with contacts from many districts reporting that tariffs were especially impactful on the prices of inputs,” according to the beige book. Business contacts across industries related to insurance, utilities and technology also reported higher prices.
Traders/investors brace for U.S. monthly jobs report Friday morning… The jobs from the Labor Department report is arguably one of the most important U.S. data points of the month. Analysts expect Friday’s employment report to extend the weakest stretch of U.S. jobs growth since the pandemic, likely locking in a Federal Reserve interest-rate cut. The key nonfarm payrolls number is seen up 75,000 in August, which would mark a fourth straight month of jobs growth below 100,000. The unemployment rate is seen rising to 4.3%, which would be the highest level since 2021.
Trump wants quick court action on tariffs… President Trump has asked the Supreme Court to uphold his global tariffs, seeking review in a case that could affect trade and give him broad new leverage over the world economy. A defeat for Trump would cut the current average U.S. effective tariff rate by at least half and could force the U.S. to refund tens of billions of dollars, according to Bloomberg Economics. The administration has asked the court to take up the case by September 10 and to put it on a highly expedited schedule with arguments in early November. This follows a federal appeals court ruling that said Trump can’t impose wide-scale import taxes by invoking a 1977 law designed to address national emergencies.
USDA says U.S. farm sector income set to increase this year… The agency’s Economic Research Service on Wednesday said net U.S. farm income, a broad measure of profits, is forecast to increase in 2025. Forecast at $179.8 billion for 2025, net farm income would be $52.0 billion (40.7 percent) higher than in 2024. Net cash farm income is forecast at $180.7 billion for 2025, an increase of $40.1 billion (28.5 percent) relative to 2024 (not adjusted for inflation). In inflation-adjusted 2025 dollars, net farm income is forecast to increase by $48.8 billion (37.2 percent) from 2024 to 2025, and net cash farm income is forecast to increase by $36.5 billion (25.3 percent) compared with the previous year. If realized, both measures in 2025 would be above their 2005–24 averages (in inflation-adjusted dollars). Overall, farm cash receipts are forecast to increase by $24.0 billion (4.7 percent) from 2024 to $535.2 billion in 2025 in nominal dollars. Total crop receipts are forecast to decrease by $6.1 billion (2.5 percent) from 2024 levels to $236.6 billion in 2025 following lower receipts for soybeans, corn, and wheat. Conversely, total animal/animal product receipts are projected to increase by $30.0 billion (11.2 percent) to $298.6 billion in 2025. Receipts for cattle, eggs, hogs, broilers, and turkeys are forecast to rise relative to 2024. Direct government farm payments are forecast at $40.5 billion for 2025, a $30.4-billion increase from 2024. The forecast increase is largely because of supplemental and ad hoc disaster assistance to farmers and ranchers from the American Relief Act of 2025. Total production expenses, including those associated with operator dwellings, are forecast to increase $12.0 billion (2.6 percent) from 2024 to $467.4 billion in 2025. Spending on livestock/poultry purchases are expected to see the largest increase relative to 2024 at $10.6 billion (21.5 percent) while spending on feed is expected to decline in $4.6 billion (6.2 percent) in 2025.
Malaysian palm oil futures rally… Malaysian palm oil futures hovered above MYR 4,450 per MT Thursday, rebounding from the previous session’s losses amid strength in rival oils on the Chicago markets. Prices are on track for a weekly advance, up about 2% so far, following a sharp decline last week, supported by strong export estimates for August, with cargo surveyors reporting increases of 10.2% to 15.4% from July. Demand was further boosted by higher purchases from top buyer India, which climbed 16% month-on-month to 993,000 MT—the highest since July 2024—as refiners built stockpiles ahead of the mid-October festive season. Malaysian markets will be closed on Friday for a public holiday.
Routine profit taking in cattle futures… The cattle futures markets Wednesday saw some routine profit-taking pressure. Losses were limited as cash cattle and beef market fundamentals remain overall bullish. It’s likely the speculator cattle futures traders this week are somewhat hesitant to play the long sides due to some keener uncertainty in the general marketplace. Very light cash cattle trading has occurred so far this week, according to USDA, with steers fetching an average of $242.00. Tuesday USDA reported the cash cattle price last week at $243.60.
Lean hog futures also see specs ringing the cash register… The lean hog futures market Wednesday also saw routine profit taking from the speculators after prices Tuesday hit a nine-week high. Cash hog market fundamentals are weakening a bit late this summer. The latest CME lean hog index (Aug. 29) is down 25 cents to $105.92. Thursday’s projected CME cash index price (for Sept. 2) is unchanged at $105.92. Wednesday’s national direct 5-day rolling average cash hog price quote is $105.75.
Today’s USDA reports—Thursday
--Livestock slaughter Weekly 2:00 pm CDT
-- Grain Transportation Report – weekly