Good morning!
Grain futures mixed overnight… At 6:00 a.m. CDT, December corn was down 3 3/4 cents. November soybeans were 8 cents lower. December soybean meal was up $1.30 and hit a for-the-move high. December bean oil was 126 points lower. December SRW and HRW wheat were both 3/4 cent lower and hit new contract highs and three-year highs overnight. The grain bulls presently have a strong grip on their markets, amid bullish fundamentals and technicals that suggest still more upside for prices. For those traders and market watchers who are reckoning grain futures prices have rallied too far, too fast, they may or may not be correct. Time will tell. But here’s some perspective: The recent solid rallies in corn, soybeans and winter wheat futures markets still see their prices in the lower half of their trading ranges of the past six years, basis nearby futures. On tap today is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index slightly up. October Nymex WTI crude oil prices are slightly lower and trading around $82.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.67%.
“Wheat Hits Three-Year High as Russia Prepares to Escalate War”… That’s an overnight news headline from Bloomberg that typifies the bullish fervor in the grain futures markets at present. “The conflict has damaged ports and grain terminals, significantly curbing shipments from a top exporting region, with Russia and Ukraine accounting for more than a quarter of global exports. Importers are now scrambling to secure more expensive supplies from further afield, including Australia and Argentina, which would increase costs and push up prices,” said the report. Winter wheat futures hit three-year highs overnight “as concerns grow that the war between Russia and Ukraine could escalate and further disrupt supplies from one of the world’s most important breadbaskets,” said Bloomberg. Russia is now preparing to intensify attacks on Ukraine, including infrastructure targets, after concluding that negotiations for a peace deal have reached a dead end, according to people close to the Kremlin, said the report.
Scattered showers/thunderstorms in Midwest, eastern U.S.; extreme heat continues in southern Plains… The National Weather Service today said the Great Lakes/Ohio Valley into the Northeast, Mid-Atlantic, Southeast, and Lower Mississippi Valley will see scattered showers and thunderstorms. A frontal boundary will also drape across the central/southern Plains northward into the northern Rockies/Plains, bringing chances for scattered showers and thunderstorms along the boundary. As the slow-moving boundary interacts with moist and unstable airmass, clustering of thunderstorms may develop. This will lead to a flash flooding risk across central/southern Plains and a severe thunderstorm threat across the central Plains and northern Rockies today. On Friday, the severe weather and heavy rainfall threat moves into the northern/central Plains. A persistent upper-level ridge continues to bring dangerous heat across the Southwest and portions of Texas through Friday. Daytime highs in the upper 90s to low 100s, with isolated areas reaching between 100-115 degrees in the Southwest.
U.S. stock indexes rally overnight on upbeat Nvidia earnings… U.S. stock indexes gained overnight as a bullish outlook from Nvidia Corp. bolstered confidence that the rapid expansion in artificial-intelligence spending is likely to run for longer. Nasdaq -100 contracts rallied 1%, while S&P 500 futures rose 0.4%. Nvidia jumped 7.2% in early trading after issuing a revenue growth forecast for fiscal 2028 far above expectations. Salesforce Inc. surged 12% as the software firm’s outlook reassured investors it can compete successfully in the AI era. Nvidia’s upbeat outlook offered relief to investors concerned about a bubble in the AI economy as Chief Executive Officer Jensen Huang said demand for its artificial-intelligence accelerators continues to expand. Meantime, marketplace attention will turn to the Kansas City Fed’s Jackson Hole Economic Symposium. Fed Chair Kevin Warsh will deliver his first major speech as Fed chair on Friday morning.
USTR says U.S. should consider banning some Canadian products… The Trump administration’s top trade negotiator suggested the U.S. ought to consider banning some Canadian goods, injecting another threat into a trade dispute between Washington and Ottawa. “Canada has banned the sale of liquor and spirits. We haven’t banned anything from Canada. You know, they’ve capped the type of autos we can bring in, they’ve banned certain goods and services from procurement in the provinces,” U.S. Trade Representative Jamieson Greer said in an interview with Canadian Broadcasting Corp. on Wednesday, Bloomberg reported.
Trump open to looking at federal beef regulations: President Trump on Wednesday indicated he was open to changing federal beef-processing regulations, saying a loosening “could be a very good call for ranchers or farmers – no, for the country,” Bloomberg reported. Trump, in an interview with conservative radio host Glenn Beck, didn’t provide details on what regulatory changes he might consider. The remarks come as Trump faces a backlash from cattle producers over a decision to boost foreign beef imports. Meanwhile, Trump also signed an order easing tariffs on some ground beef imports to lower costs for consumers. Lean beef trimmings will be temporarily exempted from a higher tariff rate if they exceed a pre-set quota, with the duty relief lasting for 90 days and limited to 100,000 tons per month. The action has drawn backlash from ranchers and rural state Republicans. The move is “to ensure affordable beef for American consumers in light of current supply challenges,” according to a White House fact sheet released Wednesday.
China selling urea to India… “China is expected to ship at least 1.2 million tons of a key fertilizer variety to India, marking a ramp-up in sales from the world’s top producer after Beijing loosened export controls earlier this year. The shipments are part of India’s most recent tender for urea, a widely used nitrogen fertilizer, with the volume accounting for at least two-thirds of the total quantity booked,” said a Bloomberg report. “The trade is a sign that tightness in the urea market is improving, after the war in Iran significantly disrupted flows from the Middle East and prices for the key crop nutrient surged to a four-year high in April.” China customs data shows about 410,000 tons of urea was exported in June and July, said the report.
Malaysian palm oil futures rebound… Malaysian palm oil futures on Thursday traded above MYR 4,850 per MT, rebounding from recent losses as a weaker ringgit boosted competitiveness and firmer edible oils on the Dalian exchange lent support. Bargain buying also emerged after prices touched a one-week low. Weather risks added to sentiment, with signs of a developing El Niño raising concerns over potential dryness and output cuts in major producers in Southeast Asia. Meanwhile, the B50 biodiesel mandate in top supplier Indonesia is slated for full implementation on October 1, reinforcing expectations of stronger domestic consumption and tighter export supply. However, gains were capped by softer soybean oil prices on the Chicago exchange and a further retreat in crude oil. On the demand side, cargo surveyors estimated Malaysian palm oil product exports for August 1–25 fell 11.4%–20% from the same period in July, underscoring sluggish momentum. Ample supply also weighed, with Malaysian inventories rising to a five-month high in July.
Weakening cash cattle prices pressure futures… October live cattle on Wednesday fell $0.175 to $210.775 and hit another eight-month low. November feeder cattle rose $1.80 to $307.50 and also hit another eight-month low early on. October live cattle saw mild technical pressure and weak long liquidation as the cattle bulls continue to suffer from the Trump administration’s moves to lower beef prices via cheaper imports as well as the reopening of the southern border to feeder cattle imports at the Douglas, Arizona port. Cash cattle trading is also taking place this week at significantly lower money than last week. However, both futures markets rallied off their daily lows as the session progressed, with short covering featured. USDA at midday Wednesday reported more active cash cattle trading so far this week, with steers averaging $218.12 and heifers $218.31. The agency Monday said last week’s cash cattle trading activity averaged $225.01.
Lean hog futures pause as bulls work to stop the bleeding… October lean hog futures on Wednesday rose $0.45 to $80.90. The lean hog futures market paused as bulls work to stop the bleeding. Technical charts are firmly bearish, which keeps the chart-based specs confident to continue to play the short side. More losses in the live cattle futures market limited buying interest in hog futures. The cash hog market continues to trend down. The latest CME lean hog index down 21 cents to $92.65. Today’s projected CME index price is down another 23 cents at $91.64. The national direct five-day rolling average cash hog price quote for Wednesday was $91.64.