Good morning!
Modest overnight gains… As of 6 a.m. CT, December corn was up 2 ½ cents. January soybeans rose 3 ¼ cents, while December soybean meal gained $2.40 and December bean oil fell 61 points. December soft red winter wheat rose 5 ¼ cents, while December hard red winter wheat gained 6 ¼ cents.
Corn and wheat hit four-month lows before finding their footing to close modestly higher in Wednesday’s session while a plunge for crude (see item below) saw soybeans slump to another 2.5 month low and bean oil trade at a six-month low. Funds are seen as likely to have eliminated a long position in corn and have been short wheat, but the soy complex has remained vulnerable to further long liquidation. Movements in crude and the dollar – as well as overall risk sentiment – following Tuesday’s U.S. midterm election results will likely remain a significant near-term driver.
In key outside markets, Nymex WTI crude oil was up 1.3% at $89.24 a barrel, stabilizing after a Wednesday rout. The ICE U.S. Dollar Index was up slightly. The yield on the 10-year Treasury note stood at 4.89% and U.S. stock index futures pointed to a mostly higher start.
Oil’s historic plunge… The prospect of easing tensions in the Middle East have pushed Brent crude down almost 20% this week, on track for the biggest weekly decline since April 2020, after hitting a six-month high just last week on fears of a re-escalation of fighting between the U.S and Iran. Vice President JD Vance, in a Wednesday X post, blamed the war for the rout that saw the Republicans lose control of both the House and Senate in Tuesday’s midterm elections. Big drops in crude tend to be a negative factor across agricultural commodities, and a nearly 9% drop for Brent on Wednesday kept pressure on the soy complex, while livestock futures also struggled despite the best day for U.S. stocks since August. Beyond the political developments, improving physical oil flows from the Middle East are helping to ease supply concerns, noted Ole S. Hansen, head of commodity strategy at Saxo Bank. He cited Morgan Stanley estimates that put last week’s regional crude exports, including routes bypassing the Strait of Hormuz, at 18.4 million barrels per day, equivalent to approximately 102% of normal pre-war levels.
- A note of caution: “Many vessels remain out of position, some continue to sail with tracking systems switched off, and insurance premiums remain exceptionally elevated amid ongoing security concerns,” Hansen wrote. “Adding to the uncertainty, Iranian reports pointed to two further tanker incidents in the Strait of Hormuz, including one vessel reportedly striking a mine. While the futures market is increasingly pricing in a safer operating environment and the prospect of peace, conditions in the physical shipping market suggest that significant risks remain.”
Russia wheat export forecast cut… Russian agricultural consultancy IKAR cut its 2026-27 wheat export forecast to 39.5 million tons from 42 million tons, Bloomberg reported, citing Russian news agency Interfax. It also lowered its estimate for total grain exports to 49.5 million tons from 52.8 million tons. The report, citing Futures International, said rail and Baltic routes, meanwhile, have limited spare capacity left while disruptions have constrained traditional Black Sea routes. Russian exporters have increasingly turned to rail, Baltic ports and containers to bypass the Black Sea due to Ukrainian attacks. The report said the planned closure of river navigation in mid-November could further pressure the country’s rail network, tightening export availability and raising shipping costs heading into winter.
China seeks stable U.S. relations… Some commentators tied Wednesday’s pressure on soybean futures to worries Beijing may feel less compelled to adhere to what the White House has said is a commitment to purchase 25 million metric tons of beans per calendar year. But Bloomberg reported that Chinese officials have emphasized a desire to maintain stability in relations with Washington. While Chinese social media users seized on the viral hashtag “Trump Total Defeat,” foreign ministry spokesperson Mao Ning framed the midterms as a domestic affair, emphasizing continued commitment to mutual respect and cooperation with President Donald Trump, the report said. Analysts said that despite potential legislative pressure from a hawkish Congress – such as pending export restriction bills – Beijing expects the current strategic equilibrium to hold.
Deere to close 2 Iowa plants… Deere & Co. on Wednesday announced it would phase out operations at two plants in Iowa, reports Eduardo Morales. Deere said it would phase out operations at its Ottumwa facility, with windrower production to relocate by the end of fiscal 2027 to its Des Moines Works, followed by a move for round-baler production by the end of fiscal 2028. The Hagie manufacturing plant in Clarion will see production of STS sprayers to its factory in Thibodeaux, La. The move comes after Deere earlier announced recalls of hundreds of workers from layoffs. Deere attributed the factory shutdowns to shifting customer demand and available manufacturing capacity.
Rains clearing out… Periods of rainfall and thunderstorms are expected across the lower Great Lakes, Central Appalachians, Mid-Atlantic and Northeast Thursday and Friday, the National Weather Service said. The long advertised cold front extending across the Ohio Valley continues an eastward track, and will spread showers and thunderstorms into the Eastern Seaboard this morning.
November to echo 2008 weather… October weather in North America was somewhat similar to 2008, particularly if the first few days of November are added in, said Drew Lerner of World Weather Inc. on Wednesday. He expects the balance of November to have “some flavor of 2008 while a more traditional El Nino bias starts to evolve.” That bias means a wetter U.S. west coast and a drier and warmer bias for the north-central states through Canada. November 2008 tended to be drier than usual from the southern Plains into the Midwest, Delta and interior southeastern states, Lerner said. The same bias is noted in the next two to three weeks of model predicted weather for the U.S., he said.
Russian diesel tankers change course… Two of the first Russian tankers carrying diesel headed to the U.S. have abruptly veered off course, the Financial Times reported, with the vessels no longer listing the U.S. Atlantic coast as their destination. A third tanker loaded with Russian diesel appears to be continuing its journey towards the U.S, but it is also signalling that it is “for orders,” according to the FT. The report noted the diversion came as data shows U.S. distillate inventories falling below 100 million barrels for the first time in more than two decades. Trump struck a controversial deal with Russian President Vladimir Putin to allow imports of diesel in an effort to bring down fuel costs ahead of the midterm elections – a move that saw significant pushback from GOP lawmakers.
Palm oil slumps to lowest since June… Malaysian palm oil futures slumped below MYR 4,500 per ton and traded at their lowest level since June, according to Trading Economics. A stronger ringgit and weakness in Dalian and Chicago edible oils futures rattled sentiment, along with expectations that October stockpiles continued to climb after hitting a September record, with the slump in crude prices following the U.S. midterms also a factor.
Cattle fail to bounce… Cattle futures fell Wednesday despite a sharp upside reversal in the stock market, which often moves in close correlation with live cattle. December live cattle fell $0.15 to $218.00 and hit another six-week low. January feeder cattle fell $2.65 to $325.725, hitting a four-week low. USDA at midday reported active cash trading so far this week, with steers averaging $217.26 and heifers $217.56. USDA on Monday reported cash cattle trading last week averaged $223.65, which was down $3.41 from the week prior. The noon report Wednesday showed lower boxed beef prices.
Hog rout continues… December lean hog futures fell $1.05 to $57.55 Wednesday, hitting yet another contract low early on. The near-term technical posture remains firmly in favor of the bears. Cash hog prices and the CME cash index continue to trend lower. Thursday’s projected CME index price is down $1.06 at $63.93.