Good morning!
Solid gains in grains overnight… As of 6:00 a.m. CDT, December corn was up 6 1/2 cents and hit a six-week high. January soybeans were 17 1/2 cents higher and hit a two-month high overnight. December HRW and SRW wheat futures markets were up 10 to 11 cents and hit four-week highs overnight. A U.S.-China trade deal that is apparently close at hand has the grain market bulls in business to start the trading week. (See item below.) The winter wheat and soybean meal futures markets last week showed impressive price strength. Importantly, these three markets had been laggards during the recent rallies in corn and soybean futures. Now that the overall grain futures complex is much more into alignment on trending price directions (up), the grain market bulls are more confident grains and soy complex prices can continue to trend sideways to higher in the coming weeks. The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil prices are weaker and trading around $60.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.02 percent.
U.S.-China come to agreement on several trade issues, including soybeans… Top trade negotiators for the U.S. and China over the weekend said they have come to terms on a range of contentious points, setting the stage for Presidents Trump and Xi Jinping to finalize a trade deal later this week when they are scheduled to meet. U.S. Treasury Secretary Bessent, speaking in an interview with CBS News, said Trump’s threat of 100% tariffs on Chinese goods “is effectively off the table” and he expected China to make “substantial” soybean purchases as well as offer a deferral on sweeping rare earth controls. “So, I would expect that the threat of the 100% has gone away, as has the threat of the immediate imposition of the Chinese initiating a worldwide export control regime,” Bessent said, as reported by Bloomberg. Bessent said a wide-ranging agreement between Trump and Xi would extend a tariff truce, resolve differences over the sale of TikTok and keep up the flow of rare earth magnets. The two leaders are also planning to discuss a global peace plan, he said, after Trump said publicly he hoped to enlist Xi’s help in resolving Russia’s war in Ukraine. “They (China) want to make a deal, and we want to make a deal,” Trump said. Global stock markets rallied overnight on the U.S-China trade deal hopes. U.S. stock indexes are pointed solidly higher and to new record highs when the New York day session begins. Safe-haven gold and silver prices were sharply down overnight, on the better risk appetite in the general marketplace.
American Soybean Association welcomes U.S.-China trade progress… The ASA issued the following statement : “As U.S.-China trade discussions advance this week, soybean farmers are watching closely for signs of renewed market access and stability. ASA welcomes reports of progress and continues to urge both nations to prioritize agricultural trade in their negotiations. ‘ASA is encouraged by Secretary Bessent’s comments that trade talks with China are productive and include U.S. soybeans. Signals of purchase commitments are a positive step, and we look forward to learning more details later this week,’ said ASA President Caleb Ragland, a soybean farmer from Magnolia, KY. “We appreciate the White House and trade negotiators keeping U.S. soybeans at the center of discussions and are hopeful Thursday’s meeting between President Trump and President Xi will result in a trade deal that delivers results for our farmers.’ ”
U.S. trade deals with other Asian countries also in the works… President Trump also said over the weekend other trade deals with several countries in Southeast Asia are close to fruition, with the aim of increasing access to critical minerals and markets for U.S. agricultural goods. The agreements include exemptions from tariffs on key exports from countries such as Thailand, Cambodia, Vietnam, and Malaysia, and framework trade pacts that will be enacted in the coming weeks. The deals are seen as an attempt to bolster Trump’s position ahead of his meeting with Chinese President Xi Jinping later this week.
Scattered showers, thunderstorms in Midwest next couple of days… The National Weather Service today said scattered showers and some thunderstorms will occur over portions of the northern Plains/Upper Midwest today, with some more isolated storms possible into the Missouri Valley and central Plains. Lingering snow showers also continue at higher elevations of the northern Rockies. Then on Tuesday a trough will begin to dig deeply southward, helping to organize over the middle to lower Mississippi Valley. Widespread showers and thunderstorms with some locally heavy rainfall are expected there, especially across the Mid-South where some isolated flash flooding will be possible. Storms are also expected to continue Tuesday along a lingering frontal boundary stretching northward through the Missouri Valley into the Upper Midwest.
Canada government distances itself from Ontario ad that outraged Trump… Canadian Prime Minister Mark Carney’s government appeared to distance itself from the Ontario premier’s interventions on trade following President Trump’s decision to increase tariffs. The increase in tariffs was a response to an Ontario government television ad that featured excerpts from a 1987 address by then-President Ronald Reagan criticizing tariffs. Ontario Premier Doug Ford said he would pause the ad campaign in the hopes that trade talks can resume. Meanwhile, President Trump said he does not anticipate meeting with Canada “for a while.” He expressed frustration that Carney didn’t move to immediately pull the commercial. Trump said he but didn’t know when the additional tariff would kick in, saying “We’ll see.”
Fed expected to trim U.S. interest rates this week… The Federal Reserve on Wednesday afternoon is expected to deliver a second straight 0.25% interest-rate cut to support a shaky job market but may face some opposition from officials anxious over inflation. Fresh data on Friday showed U.S. consumer prices rose in September at the slowest pace in three months, supporting the Federal Open Market Committee’s plan to cut rates this week. Fed policymakers are divided, however, with some worrying that cutting rates will go too far and others supporting even further reductions, all amid the lack of U.S. government economic data releases during the federal government shutdown. Meantime, Treasury Secretary Bessent confirmed the names of five finalists to succeed Fed Chair Jerome Powell. The finalists are current Fed board members Christopher Waller and Michelle Bowman, former Fed governor Kevin Warsh, White House National Economic Council Director Kevin Hassett and BlackRock Inc. executive Rick Rieder. President Trump said he expects to make a decision on the nominee before the end of the year.
One important sign the U.S. government shutdown could come to an end sooner… With the U.S. government shutdown in its fourth week, the effects of the standoff between Republican and Democratic lawmakers were being felt by U.S. air travelers, as flights began to back up. U.S. Transportation Secretary Sean Duffy over the weekend warned that U.S. travelers will face more flight delays and cancellations in the coming weeks as the continuing shutdown exacerbates the air-traffic controller staffing crunch. “What I see coming forward, as we get to Monday, Tuesday and Wednesday, that you’re going to see more staffing shortages in towers, which means you’re going to see more delays, more cancellations,” Duffy told Fox News on Sunday and as reported by Bloomberg. Air traffic controllers were notified last week that they will not be paid because of the government shutdown, which began on Oct. 1. Duffy said more air traffic workers are calling in sick and not showing up for work, with some employees looking for second jobs and other sources of income to help make ends meet. There’s one thing both Democrats and Republicans can agree on, and for which neither can run for cover: They don’t want to face the blame, fury and potential election day consequences of tens of thousands of angry American voters stuck in airports and on the tarmac. That situation could prompt a compromise among U.S. lawmakers to reopen the government.
Malaysian palm oil futures lower to start trading week… Malaysian palm oil futures hovered around MYR 4,400 per MT, marking the second straight session of declines and nearing their lowest level in three weeks. A stronger ringgit weighed on prices, while demand from top buyer India is expected to ease following the end of the Diwali festival. Sentiment was also rattled by lingering concerns over uncertain global demand and unpredictable weather that could affect production in early 2026. Still, strength in rival Dalian and Chicago edible oils helped limit further declines. Palm oil bulls hope China will resume substantial purchases of U.S. soybeans for several years, potentially supporting global vegetable oil demand. In top producer Indonesia, the government recently plans to mandate a 10% bioethanol blend in gasoline by 2027 to reduce dependence on imported fuels.
Cattle futures traders spooked as Mexico presses U.S. to open its border to Mexican cattle… December live cattle futures on Friday fell the $7.25 daily trading limit to $232.925 and hit a three-week low. January feeder cattle futures closed down the daily limit of $9.25 to $348.175, hit a three-week low and for the week were down $21.125. Cattle futures’ daily trading limits will be expanded today. Mexico’s agriculture minister will travel to Washington, D.C. this week with the aim of reaching an agreement on the reopening of the border to Mexican cattle amid an outbreak of New World Screwworm infestation. Mexican President Claudia Sheinbaum. This news followed the recent pronouncements from President Trump that he wants lower U.S. beef prices and intends to import beef from Argentina that rattled beef producers and cattle futures markets. Cash cattle trading turned more active late last week. USDA at midday Friday reported steers fetched an average price of $237.86 and light heifer trade averaged $239.12. That compares to last week’s average cash cattle trade at $239.82.
Lean hog futures bulls hold their own amid cattle futures meltdown… The lean hog futures market on Friday fared pretty well in the face of the steep price downdrafts and limit-down trades in the cattle futures markets. However, if the cattle futures continue to slump, buying interest in hog futures will be limited. Slumping cash hog prices the past couple weeks will continue to limit buying interest in futures. Also, near-term technicals in lean hog futures firmly favor the bears. That will continue to encourage the chart-based bears to play the short side in the near term. Lean hog futures’ present discounts to the cash index may somewhat limit selling interest in hog futures. The latest CME lean hog index fell 47 cents to $96.12. Today’s projected cash index price is down another 68 cents to $92.95. The national direct five-day rolling average cash price Friday was $89.15. The rolling average is down around $4.00 from last Friday.