Good morning!
Remembering September 11, 2001… Those of us old enough to remember know exactly where we were 25 years ago today when we heard the news of a major terror attack on U.S. soil. If you have not seen the video of the nearly 3,000 synchronized drones forming the twin towers in New York City last night, it’s a must see. May God Bless the United States of America, and especially those who lost friends and loved ones on that fateful day a quarter-century ago.
Grain futures lower overnight; WASDE looms… At 6:00 a.m. CDT, December corn was down 6 cents. November soybeans were 15 cents lower after hitting a contract high overnight. December soybean meal was down $2.00. December bean oil was 130 points lower. December SRW wheat was 5 1/4 cents lower and December HRW was down 7 1/2 cents. The data point of the week for the grain markets is this morning’s USDA crop production and supply and demand reports. (See item below.) USDA will also release its weekly export sales report today — delayed one day due to the Monday holiday. The key outside markets today see the U.S. dollar index modestly higher. October Nymex WTI crude oil prices are solidly lower after hitting a three-month high overnight and are trading around $99.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.944%.
USDA monthly supply and demand report on deck… Last month’s Pro Farmer Crop Tour offered the first comprehensive, field-level look at 2026 corn and soybean crop prospects. Now, it’s USDA’s turn. USDA’s September Crop Production Report due to be released at 11 a.m. CT today will be the agency’s first this year to utilize objective yield data, offering a look into planted population, ear counts and implied ear weights. USDA’s Aug. 12 report relied on farmer surveys, satellite data and crop condition ratings to come up with a 180.2 bushel yield estimate. Following the Crop Tour, we pegged the average U.S. national corn yield at 173.2 bushels per acre. We don’t expect USDA’s September report to match our estimate, but the direction of travel should be down from the agency’s August estimate. The question is: By how much? For the U.S. soybean crop, the average analyst estimate in the Bloomberg poll pegged yield at 52.4 bushels per acre, down from 52.7 bushels in August and below the Pro Farmer estimate at 53.3 bushels. Harvested acres are estimated unchanged from August at 85.8 million acres, bringing production to 4.492 billion bushels, 27 million bushels below USDA’s figure a month ago. For a more detailed breakdown of today’s WASDE report from Pro Farmer Economist Lane Akre, click here.
High heat returning to southern, eastern half of U.S. … The National Weather Service today said a stationary frontal boundary extends from the Ohio Valley into the southern Plains. While this front recently provided much-needed relief from the heat to the
nation’s midsection, this feature is expected to weaken over the next two days as temperatures again warm across the south-central and eastern U.S. In fact, a few daily high temperature records could fall in the southern Plains this weekend as daytime highs climb into the upper-90s and triple digits. The increasingly warm and unstable air will also interact with the front and a disturbance aloft to yield a broad area of showers and thunderstorms this weekend from the lower Mississippi Valley through the Mid-Atlantic. Meanwhile, the northern-tier states remain active. Portions of the upper Mississippi Valley and upper Midwest are being monitored today for scattered heavy rain and severe weather potential later this afternoon. With time, however, expect the focus for thunderstorms and heavy rainfall to shift southward toward the central Plains this weekend.
U.S. diesel prices push to new record high above $6 a gallon… Diesel prices in the U.S. hit yet another record late this week, pushing above $6 a gallon on average as the U.S. war with Iran disrupts the world’s flow of fuel. The national average of $6.05 is up from $5.85 last week and $3.70 this time last year, according to motor club AAA. Beside seriously impacting agriculture, “higher diesel prices mean more expensive transportation for a long list of everyday goods. That’s because diesel is used for many freight and delivery networks. And some businesses have already passed along steeper costs to consumers in the form of added fees on online orders and packages in the mail,” said The Associated Press.
IEA cuts its forecast for global crude oil demand… The International Energy Agency lowered its forecast for oil demand and said consumption may have to decline further in the coming months as the U.S.-Iran war drags on. The Paris-based agency deepened its estimates for this year’s decline in global oil demand by 940,000 barrels a day, to 2.5 million barrels a day. The return of a supply surplus will now be delayed until 2027, the IEA said. This year’s expected decline in global oil demand is the biggest loss in annual average terms since the 2020 Covid pandemic. The agency said the market is heading for a deeper supply shortfall than previously estimated because the war is having an even bigger impact on the flow of oil than on consumption.
Canada appears to be downplaying latest U.S. trade sanctions… Canadian Prime Minister Mark Carney said the newest U.S. trade measures against Canada will hurt some businesses but will only have a “modest” impact overall. The move suggests Canada does not want to escalate its trade frictions with the U.S. The U.S. announced import bans on goods including alcoholic beverages, whey proteins and motorcycles, and will restrict Canadian companies’ ability to sell to U.S. government contractors. Carney said the best response is focusing on his government’s plan to reinforce the domestic economy and diversify the country’s trade and economic relationships, and that Canada is “always ready to sit down in a professional way and negotiate”.
Mississippi River barge traffic likely to be slowed by low water… Drought in the upper and lower Mississippi River basins and the upper Missouri River basin, along with recent limited rainfall from portions of the Great Plains into the lower Midwest, have caused significant water level declines along the lower Mississippi River, said World Weather in a special report Thursday afternoon. “Water levels are still high enough to support barge traffic along the lower Mississippi River, with a few restrictions, but that should soon change. Runoff from rain Wednesday and Thursday in the lower Midwest is not likely to be great enough to prevent the river from reaching the low-water-level threshold near Cairo, Illinois, by Friday night.Significant restrictions to cargo size and tow limits for barges occur once the river drops to the low water threshold,” said World Weather.
U.S. consumer price index report out this morning… The annual U.S. consumer inflation rate is expected to have held steady at 3.4% in August, matching the July reading. On a monthly basis, CPI is forecast to rise 0.4%, the strongest increase in three months, following a 0.1% gain in July. Gasoline prices are expected to have climbed nearly 3%, while grocery prices are also projected to rebound. Airfares are likely to remain elevated amid higher fuel costs, while housing costs are expected to continue showing signs of softness. Meanwhile, core CPI, which excludes food and energy, is expected to rise 0.2%, month-on-month, matching July’s increase, and 2.4%, annually, which would mark the lowest reading since March of 2021, down from 2.5% in July. Overall, inflation is expected to remain well above the Fed’s 2% target. Bond bears have pushed benchmark U.S. 10-year Treasury yields toward the closely watched 5% level ahead of today’s key U.S. inflation data that stands to determine expectations for a Federal Reserve interest-rate hike next week. TradingEconomics.com
Malaysian palm oil futures weaker… Malaysian palm oil futures edged lower Friday, hovering below MYR 4,900 per MT and extending their recent decline amid bearish monthly data from the Malaysian Palm Oil Board. In August, inventories rose 7.48% mom to an eight-month high of 2.82 million MT, while exports fell 7.5% to 1.29 million MT. Production, meanwhile, rose 1.39% to 1.82 million MT, adding to concerns over ample supplies. Early September shipments also remained weak, with cargo surveyors reporting that palm oil exports fell 11.7–17.5% in the first 10 days of the month from the same period in August. Higher crude oil prices capped weakness, with Brent rising above $100 a barrel amid Middle East uncertainty, boosting palm oil’s appeal as a biodiesel feedstock. Unusually dry conditions and low rainfall in Indonesia and Malaysia over the past six weeks, exacerbated by reduced fertilizer application, also offered some support. Contracts are heading for a third straight weekly drop, down around 0.9% so far.
Cattle futures markets rally to multi-week highs… October live cattle on Thursday rose $1.975 to $217.825 and hit a three-week high. November feeders rose $1.425 to $322.775 and hit a four-week high. The cattle futures markets saw some fresh chart-based buying, some short covering and some perceived bargain hunting. October live cattle futures continue to trade at what is now a slight discount to the cash cattle market, which is also mildly supportive for futures. USDA at midday Thursday reported very light cash cattle trading so far this week, at $218.00. Last week’s cash trade averaged $219.06. The agency said cash cattle trade the week prior averaged $219.25.
Lean hog futures pause Thursday… October lean hogs on Thursday rose $0.075 to $83.15. The hog futures market paused but there are still near-term technical clues that prices have put in a bottom. The latest CME lean hog index is down 86 cents to $88.79. Today’s projected CME index price is down another 57 cents at $88.22. The national direct five-day rolling average cash hog price quote for Thursday was $87.72.