Good morning!
Grain futures lower… At 6:00 a.m. CT, December corn was down 7 1/2 cents and near the bottom of its recent trading range. November soybeans were 8 3/4 cents lower. December soybean meal was down $0.30. December bean oil was 42 points lower and hit a three-week low. December SRW wheat was down 10 1/2 cents. December HRW was down 11 1/4 cents. Both SRW and HRW hit nearly four-week lows overnight and are trending lower on their daily charts. The grain markets are feeling heavy at mid-week and bulls need a spark. Bears are sensing that looming commercial hedge pressure in corn and soybeans, as harvesting moves into full swing, could push prices farther south in the near term. Also a negative for the grains, the key outside markets today see the U.S. dollar index firmer and hitting a seven-week high. October Nymex WTI crude oil prices are lower and trading around $90.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.96%.
China President Xi set to arrive in U.S. later today… When Chinese President Xi Jinping touches down in Washington today it will mark three years since he last visited the U.S. His much-anticipated summit with President Trump “will offer the leaders of the world’s two largest economies a chance to improve personal ties and look for common ground on contentious topics including trade, artificial intelligence, the Iran war and the future of Taiwan,” said Bloomberg. Xi and Trump are expected to seek an extension of the October 2025 truce in the trade war. The truce scaled back the tariffs both countries had imposed on each other’s goods and suspended some proposed export controls on shipments of products including Chinese rare earths. The two nations have been discussing whether to go further and to slash duties on goods including U.S. energy and agricultural products ahead of the leaders’ summit. That’s under an earlier initiative to ease import barriers on $30 billion worth of products from each side under a Board of Trade mechanism. “China is making steady progress on a pledge to buy 25 million tons of U.S. soybeans annually through 2028, recently passing the halfway mark for this year. Progress on a separate commitment to spend at least another $17 billion on American crops looks more challenging,” said the report. Other purchases from the U.S. have been slow. Beef imports, for example, totaled just $7 million in the first seven months of the year — a fraction of the $556 million in 2025, according to Bloomberg Economics. China renewed permits for supplies from hundreds of American beef processing plants in May, but shipments have barely recovered as surging U.S. prices and weak Chinese demand curbed beef purchases.
Midwest gets brief respite from rain… The National Weather Service today said the Four Corners and southern/central Plains will see widespread showers and thunderstorms that may produce high rainfall rates that may lead to flash flooding. Farther north, a slow-moving boundary and the associated moisture plume will progress northeastward from the southern High Plains into the northern Plains/Upper Midwest by late Wednesday into Thursday, once again bringing showers and thunderstorms along the boundary. Additional showers and thunderstorms will occur over the Southwest into the central Plains. Periods of showers and thunderstorms are forecast from portions of the Ohio/Tennessee Valley, Mid-Atlantic, and Southeast. Colder-than-average temperatures will occur across the northern/central Plains, Northeast, and mid-Atlantic, with highs generally in the 60s.
Trump says “very good” talks with Iran… President Trump on Tuesday said his officials had “very good” talks with Iranian envoys in New York, reviving hopes for a diplomatic off-ramp to the war. Iran laid down “firm positions” for the reopening of the Strait of Hormuz, including the U.S. immediately lifting a naval blockade, unfreezing Iranian assets and ending the war “on all fronts,” said a Bloomberg report. Trump said the three-hour session was “very productive” and another meeting was being planned for the near future. Steve Witkoff, a Trump envoy, and Jared Kushner, the president’s son in law, participated on behalf of the U.S. Witkoff said the negotiations were conducted through mediators shuttling between each delegation. Iran’s state media said the country was represented by the foreign minister, Abbas Araghchi, and that the U.S. had requested the meeting.
Potential U.S. diesel export ban… Republican lawmakers are lining up behind a ban on U.S. diesel exports as pump prices set records less than two months before the midterms, Bloomberg reported. Alaska Sen. Dan Sullivan, trailing Democrat Mary Peltola and among the GOP’s most vulnerable incumbents, joined the call Tuesday. The push is coming from farm and swing-state Republicans who say $6-plus diesel is crushing growers and truckers. Iowa Senator Chuck Grassley has compared an export embargo to 1970s food-export limits. Iowa Rep. Ashley Hinson, also running for Senate, wants exports paused and the gas tax suspended. Tennessee’s Tim Burchett has a bill; South Dakota’s John Thune says he is open to looking at it. Even Louisiana Gov. Jeff Landry, whose state is a refining and export hub, has floated a 90-day ban. President Trump said Tuesday he has already told aides, “let’s not send out the diesel.”
Options traders betting on lower crude oil prices… “Oil traders are flocking to options, betting on a decline in Brent crude, with bearish wagers surging to unprecedented levels as investors reposition after a blistering rally in recent sessions. Tuesday saw volume in Brent put options top roughly 764,000 contracts, the most on record, according to preliminary ICE Futures Europe data,” and as reported by Bloomberg. “Much of the activity was concentrated in narrow put spreads, which are sometimes hedges for over-the-counter binary trades, as Saudi Arabia sought to restore flows on a vital pipeline and signs emerged of some diplomatic progress toward reopening the Strait of Hormuz.” November Brent futures are trading around $99.50 a barrel, after coming within a whisker of $110 last week.
Surge expected in global biofuel production… Global biofuel output is set to surge nearly 70% by 2030 from 2025 levels, according to a Chatham House and Forest Stewardship Council study reported by Reuters. The jump follows a wave of higher blending mandates in Brazil, China, India, Indonesia, the United States and the European Union after the Iran war drove fossil-fuel prices higher. Most of that extra fuel would still come from food and feed crops such as corn and sugarcane. If the proposed mandates are fully implemented, land used for biofuel feedstocks could more than double from 2023 levels, adding about 36 million hectares — an area the size of Germany. The authors warn that demand may rise faster than certification, land-use planning and enforcement. That raises risks of food-price spikes, deforestation and water stress. Crude oil has risen nearly 40% since the war began in late February; sugar and corn are up about 20%. Waste-based “advanced” biofuels would ease the land pressure, but first-generation crop fuels are what policy is scaling now.
Global inflation will rise in 2027: OECD… Inflation around the world will rise faster than forecast in 2027, an outlook that necessitates more monetary policy tightening from the U.S. to Australia, the OECD said. In a report released on Wednesday, the Paris-based club of rich countries raised projections compared with June for consumer-price growth in every Group-of-20 economy apart from China and Saudi Arabia. Monetary policy across the globe may have to respond, its officials added. “Faced with renewed energy price shocks and stronger-than-expected demand pressures, and at a time when inflation is already above target in many economies, central banks need to ensure that underlying inflation pressures are durably contained,” the OECD said in its report.
Malaysian palm oil futures lower… Malaysian palm oil futures extended recent losses Wednesday, hovering below MYR 4,750 per MT and nearing a six-week low. The market was pressured by weaker edible oils on the Dalian and Chicago exchanges and a further drop in crude oil prices on hopes for a diplomatic resolution to the U.S.-Iran conflict at the UN. Export signals were also weak, with cargo surveyors estimating shipments fell between 12.8%–24.7% mom during September 1–20, while EU imports for the 2026/27 season plunged 26% to 0.56 million MT. Still, losses were limited by stronger demand prospects in top consumer India, where August palm oil imports rose 7% from July to 782,761 MT, the highest since February, as refiners replenished stocks ahead of festivals. On the supply side, the world’s largest palm oil producer, Indonesia, is expected to face a shorter-than-usual wet season from November, potentially affecting crop conditions. Meanwhile, Malaysia raised its October CPO reference price but kept the export duty unchanged at 10%.
Cattle futures prices retreat… October live cattle on Tuesday fell $2.175 to $218.775. November feeder cattle lost $2.90 to $323.20. The live and feeder cattle futures markets gave back a good portion of Monday’s solid gains. Both markets see their prices in the middle of last week’s trading ranges. The direction in which prices push above or below the ranges will likely be the direction of the next trending price move. USDA at midday Tuesday reported very light cash trading this week, averaging $222.00. The agency on Monday said cash cattle trading last week averaged $221.87, down 95 cents from $222.82 the week prior.
Lean hog futures see short covering… October lean hog futures on Tuesday rose $1.125 to $79.275. The lean hog futures market saw more short covering following the recent steep price downdraft that saw prices hit a 15-month low last Friday. Bulls are still in technical trouble. The near-term chart posture remains bearish. A still- weakening cash hog market also is bearish for lean hog futures. The latest CME lean hog index is down $0.60 at $83.42. Today’s projected CME index price is down another 49 cents at $82.92. The national direct five-day rolling average cash hog price quote for Tuesday was $80.78. Hog trades are awaiting Thursday’s quarterly hogs and pigs report, which is expected to show a smaller U.S. hog inventory.