Good morning!
Grain futures firmer overnight… At 6:00 a.m. CT, December corn was up 3 cents. November soybeans were 5 ¼ cents higher, December soybean meal was up $4.90 and December soybean oil was 39 points lower. December soft red winter wheat was 6 1/4 cents higher, while December hard red winter wheat gained 7 3/4 cents. Prices were supported overnight after USDA’s weekly Crop Progress Report showed deterioration in corn and soybean conditions and pegged harvest progress behind the long-term average due to excessively wet weather in the western Corn Belt (see items below).
Key outside markets see Nymex WTI crude oil futures down 2.3% at $87.35 a barrel, the ICE U.S. Dollar Index down 0.1% after hitting its highest level since April 2025 on Monday, and the 10-year U.S. Treasury yield at 5.272%. U.S. stock index futures point to a slightly higher start for equities on Wall Street.
Trump eases restrictions on dyed diesel… President Donald Trump on Monday signed an executive order that eases restrictions on the use of red or dyed diesel, which is exempt from the federal excise tax, for on-road vehicles without penalties. Dyed diesel is available for off-road use in farm equipment. The move means farmers could use dyed diesel in on-road vehicles. The order defers payment of the federal excise tax for on-road use of dyed diesel for the remainder of the year and directs USDA Secretary Brooke Rollins to ensure farmers’ access to the fuel in high-demand areas. New York diesel futures were 2.9% lower Tuesday morning.
In a statement, American Farm Bureau Federation President Zippy Duvall applauded the executive order. “Allowing dyed diesel fuel to be used over-the-road will bring welcome relief for farmers because every cent per gallon matters when you’re running a fleet of grain trucks or hauling cattle hundreds of miles,” he said.
- Economists have warned that opening up dyed-diesel supplies for highway truckers and commercial fleets could squeeze the supply reserved for agricultural machinery. “The refineries are at capacity. By cutting taxes, we don’t change the supply conditions. U.S. diesel consumption starts to go up as a result of that and the off-road diesel price starts to go up,” Gabriel Lade of Ohio State University told Brownfield Ag News.
Crop conditions deteriorate… Corn and soybean crop conditions both deteriorated over the past week, according to USDA’s weekly Crop Progress report released Monday afternoon, with corn seeing the worst of it amid persistently wet weather in the western Corn Belt. USDA said 54% of the corn crop was rated “good” or “excellent” as of Sunday. Analysts surveyed by Bloomberg, on average, had expected the percentage to remain unchanged from the previous week at 57%. USDA said 23% of the crop was harvested, up from 18% a week ago but below the average estimate of 25% and behind the five-year average for this time of year at 27%. The Pro Farmer Crop Condition Index (0 to 500 scale, 500 equals perfect) showed a 2.34 point decline as most states in the central Corn Belt saw conditions weaken.
USDA said 57% of the soybean crop was rated good to excellent, down a percentage point from a week ago and also a point below the average guess. Harvest was pegged at 25% complete, up from 17% a week ago and behind the average guess of 27% and the five-year average of 33%. The Pro Farmer CCI for soybeans fell 2.48 points to 352.77.
USDA said winter wheat plantings were 36% complete, off a percentage point from the average estimate and up from 27% a week earlier. The five-year average for this time of year is 46%.
Cordonnier leaves U.S. corn, soy estimates unchanged… Pro Farmer crop consultant Michael Cordonnier left his U.S. corn yield estimate unchanged at 177.0 bu./ac and his soybean yield estimate unchanged at 51.5 bu./ac on Monday night. Cordonnier noted very wet weather last week across the Midwest, particularly Iowa, which saw several September rainfall records broken. Dryer weather this week should eventually allow farmers to play catch up on harvest, he said, noting just 7% of the corn crop in Iowa has been cut versus an average of 20% for this time of year. Cordonnier said harvested acreage could see a cut of 300,000 to 500,000 acres due to more corn going to silage and localized flooding, but that the shift might not be reflected in the October crop report. The wet weather and high humidity raises quality concerns, including the potential for gibberella ear rot and fusarium stalk rot in corn and Phomopsis pod and stem blight and other fungal diseases in soybeans.
Rising rates change grain storage math… As harvest gets underway, rising global bond yields and higher interest rates are altering the financial equation for crop storage. Holding grain in the bin comes with significantly higher opportunity costs—whether paying higher interest on operating loans or missing out on paying down debt. That doesn’t mean storage is a bad decision, but it can be a more expensive one. Read the full story on Pro Farmer on how to calculate true storage costs.
Disappointed Xi… According to a report by the South China Morning Post, Beijing sought a broader agenda for President Xi Jinping’s September state visit to Washington than the U.S. ultimately permitted. U.S. officials rejected proposals for Xi to engage directly with American business leaders, deliver a university address, or host tech executive talks on artificial intelligence over security concerns, the report said. Washington also restricted discussions primarily to trade, Iran, and preparations for upcoming summits. The Trump administration pushed for a strictly reciprocal itinerary mirroring Trump’s earlier Beijing trip, avoiding giving the Chinese leader an expanded platform to amplify his message.
Weak monsoon saps India tractor sales… Retail tractor sales in India were down 12.6% in September from a year ago, Reuters reported, citing figures from a dealer group. The report noted September and October are historically the strongest month for tractor wholesales, but that a later-than-usual festival season and below-normal rainfall were blamed by analysts for undercutting demand this year. The June-September monsoon, which delivers nearly 70% of the country’s annual rainfall, was 12.6% below normal this year, raising concerns about crop yields, rural demand and food inflation in Asia’s third-largest economy, Reuters reported.
Malaysian palm oil edges higher… Malaysian palm oil futures edged higher to trade near MYR 4,580 a ton, according to TradingEconomics, extending a rise after breaking a recent slide. Support was tied to a weaker Malaysian ringgit and gains for crude oil, lifting palm oil’s appeal as a biodiesel stock. The report said Dorab Mistry, director of Godrej International and a closely watched edible oils analyst, sees prices holding between MYR 4,500-5,000 through December, capped by elevated inventories despite El Niño supply risks next year.
Cattle see consolidation… December live cattle fell $1.50 to $219.975 Monday, while November feeder cattle lost $1.025 to $330.125. USDA today reported average cash cattle trading last week came in at $219.80, down 87 cents from the week prior average of $220.67. The noon report Monday showed firmer boxed beef prices, with Choice grade up $2.22 at $376.41 and Select grade up $2.09 at $356.58. Movement at midday was light at 39 loads. The Choice-Select spread is $19.83.
Short covering lifts hogs to 2-week high… December lean hog futures rose $0.825 to $70.95 on Monday, hitting a two-week high. The lean hog futures market saw more short covering and perceived bargain hunting to kick off the week, while bulls have momentum to begin to suggest a potential market bottom is in place. Gains in futures were limited, however, as cash hog market prices continue to trend down. The latest CME lean hog index was down $0.51 at $80.20. Tuesday’s projected CME index price is down $0.57 at $79.63. The national direct five-day rolling average cash hog price quote for Monday was $77.87. The USDA’s noon pork report Monday showed cutout value up $3.26 at $87.74, led by gains in picnics, hams and bellies. Movement at midday was 146.53 loads.