Good morning!
Grain futures higher overnight… At 6:00 a.m. CDT, December corn was up 4 cents. November soybeans were 4 3/4 cents higher. September soybean meal was up $2.30. September bean oil was 20 points lower. September SRW wheat was up 11 3/4 cents and September HRW wheat prices were 12 3/4 cents higher. Both winter wheat markets hit two-week highs overnight. Closes in the grain futures markets today at or near their weekly highs would be a solid technical clue that this week’s price gains can be extended in the near term. Today is an extra important trading day for the chart-based grain traders. The key outside markets today see the U.S. dollar index lower. September Nymex WTI crude oil prices are higher and trading around $82.25 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.66%.
Too much rain in parts of Midwest and eastward… The National Weather Service today said a corridor of showers and thunderstorms will remain active from the Midwest through the Ohio Valley and toward the central to southern Appalachians, where heavy rain, flash flooding and severe weather will remain a threat for the next couple of days. Thunderstorms can grow into large clusters, especially during the late-day to overnight hours along this corridor. Repeated rounds of heavy rainfall leading to saturated soils and ongoing flooding have prompted a moderate risk of excessive rainfall (level 3/4) across southeastern Iowa into Illinois today. By Saturday, the heavy rain and severe weather threats are expected to lift only slightly farther north toward the lower Great Lakes. Meantime, a burgeoning heatwave continues across the southeastern quadrant of the country Heat advisories are currently in effect for much of the southern Plains through the deep South and across the Southeast, along with extreme heat warnings across a large section of the central U.S. To the west, additional areas of storms with a heavy rainfall/flash flood threat are also expected through the interior West and into the central High Plains.
Ukraine reportedly contacts Russia regarding halting black sea attacks… Reuters on Thursday reported Ukraine had sent Russia an offer suggesting they both halt attacks on civilian targets in the Black Sea. The offer to suspend attacks was transmitted by Kyiv via a third party, and Ukraine was still waiting for a response, the report said, citing a source familiar with the matter. The Reuters report noted that Kyiv was forced to turn to alternative shipment routes when many shipowners halted stops at ports in late July in the southern region of Odesa, a key grain-export hub, after Russia targeted ships in the region. Russia had to suspend operations at all three terminals at Novorossiysk on Wednesday and Thursday after a Ukrainian attack and will have to cut its grain exports further.
U.S. to implement “unprecedented economic measures” against Iran… The U.S. will soon announce unprecedented economic measures against Iran, Treasury Secretary Scott Bessent said Thursday, intensifying the Trump administration’s effort to force Tehran’s capitulation after almost six months of war. “Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country,” Bessent said in an interview with Newsmax on Thursday, Bloomberg reported. The move will be part of a “one-two punch” that includes the continued blockade of Iran’s ports, he added. Iran’s economy has taken a major hit, with much of its industrial capacity damaged and crude exports severely curtailed by the US blockade.
Tyson Foods restructuring its beef business, closing Joslin, Illinois plant… Tyson Foods “is making strategic changes to its beef operations to position the company for long-term success,” said a company press release Thursday. “Tyson Foods will anchor its beef business around three strategically located beef facilities in the central United States: Dakota City, Nebraska; Holcomb, Kansas and Amarillo, Texas, to create a more competitive footprint amidst one of the most historic cattle shortages the country has ever experienced. Recent USDA cattle inventory data, which included continued evidence of limited heifer retention, indicates these supply constraints are likely to persist, requiring strategic action. The company will end operations at its Joslin, Illinois, beef facility and its Eagle Mountain, Utah, case-ready facility…. Additionally, Tyson Foods is pursuing the sale of its Pasco, Washington, beef facility. With these changes, the company will ramp back up a second shift at its Amarillo, Texas, facility as cattle become available,” said the press release.
“A historic El Niño is coming that could cost the world trillions. Is this the big one?” That’s a headline from a Bloomberg story that said, “Every few years, weather nerds and agriculture analysts will talk about an upcoming El Niño, and then they mostly pass by with relatively few headlines. But sometimes El Niños end up being massively destabilizing -- leading to devastating droughts, flooding, and other catastrophes. And this year’s emerging El Niño could end up being one of the big ones, with forecasters predicting record-breaking intensity.” El Niño occurs when the atmosphere reacts to a sustained warming of Pacific Ocean surface temperatures above normal levels. The U.S. Climate Prediction Center declared on June 11 that this response had been triggered. The CPC also said that this El Niño is likely to intensify as the year progresses, adding there’s a 63% chance it could evolve into a very strong event — what’s informally known as a “Super El Niño” — heading into 2027. It may become one of the most powerful El Niños in records going back to 1950.
Extreme heat, drought in Europe threaten fall planting… “Parched soil and scorching heat are threatening Europe’s fall planting season, heightening risks to global food supplies stretched by geopolitical tensions,” said a Bloomberg report Friday. “The multiple heat waves that have battered Europe this summer have already upended harvests and disrupted critical grain transport routes. Now, as dry weather persists, concern is turning to next year’s crop, with some farmers already delaying sowing or reconsidering how much land to plant,” said the report. “We should be planting our winter forage for sheep, but we’re holding off until we’ve had some meaningful rain,” said James Mills, who grows wheat, barley, oats and beans in Yorkshire, England. For wheat, the planting starts in mid-September, “but the land is so unbelievably dry that we probably need an inch or two of rain to make a difference.”
More U.S.-China trade tension… The Trump administration Thursday announced it is imposing tariffs of as much as 100% on imported drones and their components to reduce U.S. reliance on foreign suppliers. The top rate will apply to heavier drones or those that possess certain capabilities, while smaller drones will be taxed at 25%, and lower rates apply to some trading partners. The White House statement didn’t mention China, but the tariffs risk reinforcing a separation with the country, which isthe world’s dominant drone manufacturer. Washington and Beijing continue to exchange tit-for-tat trade measures just weeks before Chinese leader Xi Jinping is expected to meet with President Trump in the U.S.
New commodity exchange in Indonesia… Indonesian President Prabowo Subianto says his country will open a new commodity exchange in an effort to exert more influence on world commodity prices, according to a Bloomberg report. “Indonesia plans to launch a Strategic Mineral and Commodity Exchange on Jan. 1, 2027, Prabowo said in his annual budget address on Friday. The bourse would be used to build reference prices for the country’s main export commodities and would be supervised by the Financial Services Authority,” said the report. “Indonesia will no longer be merely a place where commodities are extracted,” he said at parliament. “We must set global commodity prices.” The exchange would create Indonesian reference prices for key exports — palm oil, nickel, tin, coal, and coffee — and make commodity trading more transparent and harder to manipulate, he added. “The rhetoric may invoke anxiety in commodity markets given Prabowo’s track record of taking a hard interventionist stance on Indonesia’s sprawling natural resources sector,” said the report. Indonesia already has multiple licensed commodity exchanges, though they have mostly failed to attract significant trading volume.
Total New World screwworm cases detected in U.S. remain at 45… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 45 total New World screwworm detected cases in the U.S. There are three active cases, all in Texas.
Malaysian palm oil futures prices rally… Malaysian palm oil futures extended gains Friday, hovering around MYR 4,725 per MT and heading for a second consecutive weekly advance, supported by firmer edible oils on the Dalian markets and improving export prospects. Cargo surveyors estimated Malaysian palm oil shipments rose between 2.6% and 14.8% in the first 10 days of August from the same period in July. Demand prospects also strengthened after edible oil imports in top buyer India climbed to a 10-month high in July, as refiners increased purchases of palm oil and soyoil to replenish inventories ahead of the festival season, according to the Solvent Extractors’ Association of India. Higher oil prices also lent support amid U.S. threats to maintain a naval blockade of Iran. However, gains were capped by a stronger ringgit and weaker soyoils on the Chicago exchange. Meanwhile, Malaysia lowered its September crude palm oil reference price, although the adjustment was insufficient to bring the export duty below 10%.
Lower cash cattle prices pressure live cattle, feeder futures… October live cattle on Thursday fell $3.75 to $220.05 and hit a three-week low. September feeder cattle lost $2.15 to $337.20 and also hit a three-week low. Both markets saw more technical selling pressure as the charts have turned significantly more bearish this week. Lower cash cattle trading so far this week also pressured futures. USDA at midday Thursday reported a bit more active cash cattle taking place so far this week, with steers averaging $231.44 and heifers averaging $231.47. The agency on Monday reported cash trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. In the southern Plains states, livestock heat stress will prevail during much of the next two weeks, making weight gains a challenge.
More technical selling pressure in lean hog futures… October lean hog futures on Thursday fell $1.425 to $82.125, nearer the daily low. The hog futures market saw more technical selling pressure. Sharply lower cattle futures prices Thursday also spilled over into more selling in hog futures. The cash hog market is still trending down, which also favors the bearish camp of futures traders. The latest CME lean hog index down 5 cents to $95.89. Today’s projected CME index price is down another 5 cents at $95.84. The national direct five-day rolling average cash hog price quote for Thursday was $97.05.