Good morning!
Grain prices mixed to weaker overnight… As of 6:00 a.m. CDT, December corn was down 2 1/2 cents, November soybeans were 3 3/4 cents lower and December HRW and SRW wheat futures markets were 1 1/4 cents higher. The grain markets are wavering as corn and soybean harvesting is moving into high gear, and very large yields are expected. Seasonal hedge selling pressure from the commercials looms, which is also keeping speculators timid on playing the long sides of the grains. The key outside markets today see the U.S. dollar index weaker. Nymex crude oil prices are lower and trading around $64.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.15 percent.
Dry, warm Midwest weather outlook… U.S. weather this week will be dry in much of the Midwest, Delta, southern Plains, northeastern states and southwestern desert areas, reported World Weather Inc. Sunday evening. A few brief showers will occur in the northern and west-central U.S. Plains and in the eastern Canada Prairies Tuesday and Wednesday, with rainfall less than 0.50 inch. Greater rain will evolve in the northern Plains and a part of the upper Midwest next weekend, with rainfall of 1.00 to 2.00 inches from northern Nebraska to eastern North Dakota and western Minnesota. U.S. Midwest rainfall will include scattered showers and thunderstorms briefly early to mid-week next week with limited impact on soil moisture or fieldwork. Other areas in the United States and Canada’s Prairies were largely dry, although late season monsoonal rain fell in the southwestern U.S. desert region, producing 1.00 to 3.00 inches of rain in central Arizona, while lighter amounts occurred in cotton areas. Temperatures will be well above normal in the U.S. Plains, Canada’s Prairies and Midwest this week, with some cooling likely next week that will bring temperatures down to a more seasonably warm bias, said the forecaster.
U.S. government shutdown looms… The top U.S. congressional leaders will meet with President Trump at the White House today to discuss a short-term spending bill ahead of the deadline to avoid a federal government shutdown on Wednesday. Democrats are insisting that the bill must include an extension of health-care subsidies and a restoration of budget cuts to health care. Republicans say negotiations for those issues can happen after averting a shutdown. The bill would only fund the government until mid-November and must pass before Oct 1. Republicans need at least some Democrats to back the short-term bill in the Senate. The U.S. dollar is under pressure to start the week, due to the government shutdown uncertainty. Trump has raised the stakes by threatening permanent dismissals of unfunded “non-essential” federal workers in the event of a shutdown, breaking with decades of precedent that has typically allowed furloughed employees to return after funding resumes. Gold prices surged to a record high overnight on safe-haven demand. However, the U.S. stock indexes posted decent gains overnight.
OPEC-plus likely to increase its collective crude oil production again… OPEC-plus will likely raise its oil output again in November as the cartel continues its strategy to reclaim global market share, according to a Bloomberg report. The alliance will consider adding at least as much as the 137,000 barrel-a-day hike scheduled for October when it meets online Oct. 5. No final decision has been made yet, and deliberations could still evolve ahead of the meeting, said the Bloomberg report. Still, the planned October OPEC-plus hike is sharply lower than the increments the group announced in the two prior months, and delegates emphasized at the time that the actual supply boost would be even smaller because some countries lack the ability to increase. Nymex crude oil prices are under pressure to start the trading week, due in part to the OPEC news.
Goldman bullish on U.S. stock market, says recession risk low… Global equities are likely to extend a rally into year- end, given a resilient U.S. economy, supportive stock valuations and a dovish pivot from the Federal Reserve, according to a report from Goldman Sachs and reported by Bloomberg. “Good earnings growth, Fed easing without a recession and global fiscal policy easing will continue to support equities,” Goldman wrote in a note. “With anchored recession risk, we would buy dips in equities into year-end.”
China to hold five-year plenum in late October… China’s ruling Communist Party will convene a closed-door meeting from Oct. 20 to 23 to review development plans for the next five years, the official Xinhua News Agency said on Monday, citing a meeting of the top decision body Politburo. The new blueprint for China’s 15th five-year plan, which covers 2026 to 2030, is closely monitored by investors and foreign leaders for signs of policymakers’ intent to rebalance the world’s second-largest economy toward consumption. U.S. Treasury Secretary Scott Bessent has urged Beijing to make boosting the Chinese consumer a pillar of its strategy for the next five years. The 24-member Politburo vowed to grow the economy by developing “new productive forces” that focus on scientific and technological innovation, deepen reform and expand opening up, according to the Xinhua report. It also repeated pledges to give support to the role of the market in allocating resources.
Malaysian palm oil futures higher… Malaysian palm oil futures were above MYR 4,400 per MT Monday, rebounding from prior losses on expectations of strong demand from India ahead of October’s festive season. Meanwhile, an industry analyst projected India’s edible oil imports to rise 4.6% to a record 17.1 million MT in 2025/26, driven by increased palm oil purchases. In Indonesia, the world’s largest palm oil producer, exports to the EU are set to climb next year, supported by a bilateral trade pact and the EU’s second delay of its anti-deforestation law. However, further gains were limited by a stronger ringgit and weaker rival oils on the Dalian and Chicago exchanges.
USDA cold storage report details… Frozen U.S. beef supplies totaled 393.8 million lbs. at the end of August, down 4.0 million lbs. (1%) from July, but up (1.5%) from year-ago, according to USDA’s latest Cold Storage report that was released Friday afternoon. The report showed 393.9 million lbs. of pork in frozen storage at the end of August, down 10.7 million lbs. (2.7%) from July and 61.4 million lbs. (13.5%) from August 2024. Pork bellies declined 25% from last month and 8.5% from year-ago. Total frozen poultry supplies on August 31 were down slightly from the previous month and from year-ago. Total stocks of chickens were down 2% from the previous month but up 4% from last year. Total pounds of turkeys in freezers were up 3% from last month, but down 8% from Aug. 31, 2024.
Cattle futures markets turn wobbly… The live and feeder cattle futures markets bulls on Friday worked to stabilize prices after both markets suffered solid losses last Wednesday and Thursday. That’s a bit of a positive signal heading into trading early this week. However, the cash cattle and beef market fundamentals continue to weaken and the near-term technical postures for both live and feeder cattle futures have deteriorated the past three weeks. USDA at midday Friday reported steers fetched an average price of $232.48 and heifers an average of $233.65. That compares to the week prior’s average cash cattle trade at $237.51. USDA will release last week’s average cash cattle trading price around midday today.
Lean hog futures market still strong… October live cattle futures on Friday set another contract high and for last week surged $3.525. Friday’s technically bullish weekly high close in October hogs sets the table for follow-through, chart-based buying interest early this week. With futures prices surging speculators appear to be unwilling to step in on the short side of a steaming locomotive. Futures’ discounts to the cash hog index will also limit selling interest in futures in the near term. The latest CME lean hog index rose 6 cents to $105.06. Today’s projected cash index price is down 23 cents to $104.83. The national direct five-day rolling average cash price Friday was $105.07.
USDA reports today--Monday
--Export Inspections
--Egg Products
--Crop Progress