Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CDT, December corn was unchanged. January soybeans were 7 1/4 cents higher. December HRW and SRW wheat futures markets were down 3/4 to 1 1/2 cents.The corn and wheat futures markets are pausing at mid-week, while soybean and meal bulls have quickly recovered from Tuesday’s selling pressure. The grains markets are all in good technical shape at present, save for bean oil, which suggests the chart-based speculators will continue to be buyers in the near term. The key outside markets early this morning see the U.S. dollar index near steady. Nymex crude oil prices are near unchanged and trading around $60.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08 percent.
Rain chances in upper Midwest, Ohio Valley Thursday, Friday… The National Weather Service today said a system moving through the Rockies emerges into the Plains Thursday evening, leading to rainfall across the Upper Midwest and Great Lakes late Thursday into early Friday. There is a thunderstorm threat on Friday morning closer to the Ohio Valley and in the vicinity of Indiana. The southwest, southern Plains, southeast, and the central/southern Mid-Atlantic States should be dry through the next few days, with above-average temperatures, though few record-high temperatures appear to be in jeopardy (mostly in Texas on Thursday and Friday).In the southern High Plains, a strengthened downslope off the Rockies could lead to fire weather conditions near the New Mexico/Texas border Thursday afternoon. Across the Northern Continental Divide, snowfall is expected at higher elevations. The potential for wind gusts exceeding 55 mph on Thursday has led to the posting of high wind watches for northern Montana. Across the Great Lakes and Northeast, a wave of low pressure should bring some rainfall to the region today into tonight, with some higher elevation snow for the Northern Appalachians possible Thursday morning in the wake of the system.
U.S. government shutdown now the longest in history… The U.S. government shutdown has become the longest in history, and with no sign of a resolution soon its economic toll is deepening. Now in its 36th day, the federal government shutdown has surpassed the previous record set in early 2019 during President Trump’s first term. Every week that passes costs the economy anywhere from $10 billion to $30 billion, based on analysts’ estimates, with several landing in the $15 billion range. Depending on its length, the shutdown could lower fourth-quarter U.S. economic growth by as much as 2 percentage points, according to the Congressional Budget Office. If the stalemate extends to Thanksgiving week, about $14 billion won’t be recovered at all, the CBO said and as reported by Bloomberg.
More clarity emerging regarding last week’s U.S.-China trade truce… China has announced it will remove retaliatory tariffs on some U.S. farm products and lift export controls on several American firms, after Washington halved its fentanyl-related levies on Chinese goods. The country’s Finance Ministry confirmed in a Wednesday notice it would end tariffs imposed March 4 on soybeans and other U.S. agricultural products including corn, wheat, sorghum and chicken. That move — to take effect Nov. 10 — was previously flagged in a White House fact sheet. China is also removing an additional 15% retaliatory levy on U.S. wheat, according to the finance ministry notice and reported by Bloomberg. A major Chinese buyer is currently seeking a shipment of the grain from the U.S., which would be purchase by the Asian nation in more than a year. “The halting of certain tariffs between China and the U.S. aligns with the fundamental interests of both countries and their people,” the ministry said in the notice. It “meets the expectations of the international community and will help push bilateral economic and trade relations to a higher level.” The Chinese ministry confirmed in a separate notice on Wednesday that the 24% tariff on all US products will be suspended for a year, mirroring President Trump’s executive order. The Chinese suspension will kick in at 1:01 p.m. in Beijing on Monday, Bloomberg reported.
ADP jobs report in focus today… ADP Research’s private-sector payrolls report ahead of the U.S. open today may have a bigger impact than usual on sentiment, due to limited visibility on the labor market amid the longest U.S. government shutdown on record. The figures are projected to show a modest increase in October after declines the prior two months, according to Bloomberg. With money markets pricing in around a 70% change of a Fed rate cut in December as officials look to support the labor market, an unexpected surprise may prompt a recalibration of expectations. “If the ADP shows a significant decline, then Fed rate cut discussion will gain new momentum, which might be supportive for the stock market,” said Christian Stocker, a strategist at UniCredit SpA and as reported by Bloomberg.
Democrats score election victories Tuesday… Democrats registered their biggest political victories since their stinging loss to President Trump a year ago with a series of wins Tuesday night in Virginia, New Jersey, New York and California. Democrats Mikie Sherrill in New Jersey and Abigail Spanberger in Virginia both campaigned for governor on pocketbook issues — lowering costs and expanding childcare. In New York City, Zohran Mamdani, a Democrat who ran a campaign for mayor, won Tuesday after emphasizing the same message on the cost of living — tackling housing costs and widening inequality in the nation’s financial capital. In California, voters approved a ballot initiative that will redraw the state’s congressional district map to give Democrats the opportunity to win a handful of additional seats. Democrats also won competitive down-ballot races in Pennsylvania, where three Supreme Court justices won retention elections, and in Georgia, where two Democrats won seats on the state utility commission by campaigning on energy costs.
Malaysian palm oil futures gain… Malaysian palm oil futures edged higher Wednesday, hovering around MYR 4,150 per MT, marking a second session of gains. Traders continued to take advantage of bargain hunting after prices fell to a near-four-month low earlier this week. Sentiment was also supported by higher October export estimates, with cargo surveyors reporting shipments up 4.3%–5.2%. However, gains were capped by weaker rival edible oils on the Dalian exchange. Meanwhile, palm oil imports by top buyer India fell to a five-month low, bringing total purchases in the 2024/25 marketing year to a five-year low, as buyers shifted to soyoil following the recent palm oil rally. Reuters projected Malaysia’s stockpiles likely rose 3.5% in October to 2.44 million MT, the highest since October 2023.
Technical selling pressure in cattle futures markets… December live cattle on Tuesday fell $4.425 to $227.775. January feeder cattle lost $7.30 to $329.225. The live and feeder cattle futures markets saw technical pressure and also saw better selling interest amid the U.S. stock market sell off and keener risk aversion in the general marketplace Tuesday. Bulls are still worried about bearish pennant patterns that have formed on the daily bar charts for live and feeder cattle futures. Tuesday’s price action saw bearish downside breakouts from the pennants in December live cattle and January feeder cattle. Ag Secretary Brooke Rollins confirmed the U.S. is not ready to reopen its border to Mexican cattle amid the New World Screwworm outbreak. However, she did note that President Trump is “very focused” on reopening the border, which has been largely closed since May. USDA has reported no cash cattle trading activity so far this week. The agency Monday reported last week’s average cash cattle trade was $230.86 versus the week prior’s average of $237.89.
Chart-based selling in lean hog futures, too… December lean hogs on Tuesday fell 67 1/2 cents to $79.925 and hit a 3.5-month low. The lean hog futures market saw still more technical selling amid bearish near-term price charts that include a price downtrend in place for December hogs. Steadily falling cash hog prices are also bearish for lean hog futures. Bulls are getting little help from December hog futures’ discount to the cash index. The latest CME lean hog index is down another 21 cents at $90.98. Today’s projected cash hog index is down another 8 cents at $90.90.