Good morning!
Grain prices mixed to firmer overnight… As of 6:00 a.m. CDT, December corn was down 1 3/4 cent, November soybeans down 3 1/2 cents and December winter wheat futures markets were 3/4 cent lower. The uptrend in corn remains the bulls’ friend. Soybean bulls have stabilized prices this week and soybean meal is showing some signs of life again. Winter wheat futures continue to wallow near their contract lows, but there is major psychological support just below the markets—at the $5.00 level. Trading volumes in the grains may be lighter today, Thursday and before Friday morning’s monthly USDA supply and demand report. The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are firmer and trading around $63.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08 percent.
Geopolitics heating up again… Poland shot down Russian drones that crossed into its territory during Russia’s latest massive air strike on Ukraine. Poland called it an “act of aggression.” Polish Prime Minister Donald Tusk said the airspace violation in the early hours of Wednesday amounted to an intentional provocation from Moscow, forcing the NATO and European Union member state to close its airspace and order citizens in the eastern part of the country to stay indoors. Poland will seek to trigger North Atlantic Treaty Organization consultations on a potential response, a procedure known as Article 4, the premier said. Polish authorities registered 19 airspace violations, with a “significant” number of drones originating from Belarusian territory, Tusk said. Meantime, Israel’s airstrike on Qatar’s capital delivered a major blow to U.S.-supported efforts to normalize ties with Gulf Arab nations and possibly crippled talks for a ceasefire in Gaza. The attack targeted leaders of Palestinian militant group Hamas and was condemned by Qatar’s Gulf neighbors, including the United Arab Emirates and Saudi Arabia. The strike may have ended Qatar’s role as a mediator in ceasefire negotiations, with other countries such as Turkey potentially being put on high alert.The Israel strike inside Qatar took the U.S. by surprise. President Trump said about the matter: “I will tell you this, I was very unhappy about it,” he told reporters Tuesday night, adding that he expected to make additional comments today. “Very unhappy about every aspect — we got to get the hostages back, but I was very unhappy about the way that went down,” said Trump.
Bessent says Fed needs to change policy after revised U.S. jobs data… U.S. Treasury Secretary Scott Bessent called on the Federal Reserve to change its monetary policy stance after a government agency revised U.S. jobs data to show weaker hiring in the year through March. “They should, let’s see if they will,” Bessent said on Fox Business Tuesday, and as reported by Bloomberg, when asked if the Fed should recalibrate. He cited famed economist John Maynard Keynes for saying “when the facts change, I change my mind — what do you do?” Bessent’s comments came after the revised jobs data on Tuesday morning showed there were 911,000 fewer payroll gains in the 12 months through March. “It turns out that we didn’t have good facts.” In a posting on X Tuesday, the Treasury chief said, “President Trump inherited a far worse economy than reported, and he’s right to say the Fed is choking off growth with high rates.”
U.S.-India agree to talk on trade again… President Trump and Indian Prime Minister Narendra Modi have pledged to talk and resume trade negotiations, signaling a possible thaw after weeks of a fight over tariffs and Russian oil purchases. “I am pleased to announce that India, and the United States of America, are continuing negotiations to address the trade barriers between our two nations,” Trump wrote on social media Tuesday. “I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our great countries!”, Trump posted. Modi responded shortly after with a post on X, saying that he was looking forward to speaking with Trump and that the U.S. and India are “close friends and natural partners.”
Key U.S. inflation reports out today and Thursday… Today comes the producer price index report for August, which is expected to come in at up 0.3%, month-on-month. The July report showed a 0.9% rise. The core PPI (excluding food and energy) is also expected to come in up 0.3%, month-on-month, and compares to a 0.9% rise in core PPI in the July report. The consumer price index report for August is out Thursday morning.
U.S. Energy Information Administration says crude oil glut is here… A global crude oil glut is already underway, with inventories expected to rise in the current quarter, according to a U.S. Energy Information Administration report. Global oil inventories are set to grow by an average of more than 2 million barrels per day in the current quarter through the first quarter of next year. The anticipated influx of crude into the global market will depress oil prices in early 2026, potentially leading to a reduction in supply by both OPEC-plus and some non-OPEC producers later in the year, said the EIA. However, the agency still projects U.S. crude oil production will decline in 2026--the first annual drop in production since 2021.
President Trump’s new official health policy won’t significantly impact food, agriculture industries… Tuesday’s “Make America Healthy Again (MAHA) Commission” report, which is President Trump’s official health policy roadmap, does not include new crackdowns on the food and agriculture industries. The report calls on federal agencies to work with restaurants to increase education and awareness of healthy food options for children and to evaluate the health effects of pesticides. The final report maintains parts of an earlier draft, including an education campaign to boost fertility rates and an initiative to return whole milk to public schools. The report, written by several federal agencies, eases months of speculation and worry from corporations that were concerned about costly new policies related to processed ingredients and the use of chemicals.
Friday’s USDA monthly supply and demand report coming more into focus… According to a Reuters survey of analysts, the agency will estimate U.S. corn production at 16.516 billion bushels and an average yield of 186.2 bushels per acre. That compares to USDA’s August production estimate of 16.472 billion bushels and an average yield of 188.8 bushels an acre. The average of the analysts surveyed by Reuters shows a U.S. soybean production estimate of 4.271 billion bushels and an average yield of 53.3 bushels an acre in the September report, compared to the August USDA production estimate of 4.292 billion bushels and an average yield of 53.6 bushels an acre. Friday’s USDA report is out at 11:00 a.m. CDT.
Malaysian palm oil futures lower again… Malaysian palm oil futures fell over 1% to below MYR 4,450 per MT Wednesday, down for the second session as traders digested monthly data from the Malaysian Palm Oil Board. Palm oil stocks at the end of August rose 4.18% from July to 2.2 million MT, while production grew 2.35% to 1.86 million MT and exports slipped 0.29% to 1.32 million MT. Weakness also came from falls in rival oils on the Dalian and Chicago exchanges. Losses were limited by expectations of strong demand from top buyer India ahead of the mid-October festive season.
Heavy selling pressure in cattle futures begins to suggest market tops may be in place… October live cattle futures on Tuesday fell $5.625 to $230.175 and hit a three-week low. September feeder cattle closed down the daily limit of $9.25 to $351.70 and hit a three-week low. With Tuesday’s limit-down move in September feeders, trading limits in both cattle futures markets will be expanded today, with the daily limit being $13.75 in feeder cattle and $10.75 in live cattle futures. Heavy profit-taking pressure and weak long liquidation were featured today in the cattle futures markets. The old trading adage says a strong bull market needs to be fed fresh, bullish fundamental news often to continue on, and such has been lacking in the cattle markets recently. The only fresh fundamental news that may have negatively impacted the cattle futures markets Tuesday was the revised U.S. jobs growth numbers for the year ended in March–down 911,000 for the year, which about cuts in half the monthly jobs–growth rate for the 12-month period ending in March–from 147,000 to just over 70,000 a month. Those revised numbers could sap U.S. consumer confidence. Price uptrends on the daily charts were at least temporarily negated today to begin to suggest market tops are finally in place. Follow-through selling pressure today would be a stronger clue that market tops are in place. Keep in mind that the cattle futures market bulls have shown keen resilience the past few months. However, this seems like an extra steep hole for the bulls to climb out.
Lean hog futures market ignores big drops in cattle futures Tuesday… Tuesday’s gains in the lean hog futures market were especially impressive given the big losses in the cattle futures markets. Technical buying was featured again Tuesday amid the firmly bullish near-term chart posture for October hogs. The latest CME lean hog index is down 1 cent to $105.91 as of Sept. 5. Today’s projected cash hog index is down 4 cents to $105.87. Tuesday’s national direct 5-day rolling average cash hog price quote was $105.94.
USDA reports today—Wednesday
--Broiler Hatchery data