Good morning!
Grains rebound overnight… As of 6:00 a.m. CT, December corn was up 2 ¾ cents. November soybeans were 10 ¾ cents higher at $12.89, while December soybean meal rose 10 cents to $347.60 and December soybean oil jumped 130 points to $69.92 cents. December soft red winter wheat was up 12 ¼ cents, while December hard red winter wheat rose 11 cents.
In key outside markets, the U.S. dollar was sharply higher as the euro fell to a 17-month low (see item below). The yield on the 10-year Treasury note stood at 5.277% and Nymex WTI crude oil futures were 0.6% lower at $90.59 a barrel. U.S. stock-index futures pointed to a slightly weaker start for equities.
Grain and soy complex futures rebounded overnight, finding support after a selloff last week that knocked 30 ½ cents off December corn and 40 ¾ cents off November soybeans. No letup in fighting between Russia and Ukraine underlined concerns about wheat and corn exports from the Black Sea region (see item below). Harvest pressure is likely to pick up in the week ahead as drier weather in the western Corn Belt eventually allows producers to get into the fields after a historically wet September.
Brazil’s presidential election heads to runoff… Brazil’s presidential election is headed to a run-off after Flavio Bolsonaro, an ally of President Donald Trump and the son of former President Jair Bolsonaro, outperformed expectations in first round voting Sunday. He will face incumbent President Luiz Inacio Lula da Silva in an Oct. 25 runoff. Both candidates fell short of the majority required for an outright first-round win. The country’s electoral court said Bolsonaro had just over 56 million votes, or 47% of the ballots, to Lula’s 53.7 million, or 45%, the Associated Press reported. A Bolsonaro administration would be expected to seek to weaken the Amazon Soy Moratorium, a zero-deforestation agreement established in 2006 under which major international commodity traders agreed not to purchase soybeans grown on land cleared after 2008.
- Watch the real: The Brazilian real weakened against a broadly stronger U.S. dollar (see item below) early Monday, but a Bolsonaro victory would be seen as a positive for Brazilian assets, including the currency. Bloomberg noted that investors see Bolsonaro as more likely to pursue a fiscal adjustment despite avoiding commitments to spending cuts. JPMorgan has estimated that a fiscal adjustment could allow the real to rally 6%. A stronger real can undercut demand for Brazilian grain relative to the U.S. While ag commodities are priced globally in dollars, a stronger real means Brazilian exporters need more dollars to cover real-denominated domestic costs. A stronger currency also lowers local grain prices in Brazilian currency terms, which can slow farmer selling.
The dollar is surging… The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, was sharply higher, hitting its highest level since April 2025 largely due to a sharp selloff for the euro, which represents 58% of the DXY basket. The euro is under pressure as a global surge in government bond yields has reignited fears over French borrowing costs. That may limit the ability of the European Central Bank (ECB) to continue raising interest rates. Meanwhile, “core support for the dollar should continue to come from the fact that expectations for the monetary policy tightening cycle remain far more resilient for the Fed than for overseas central banks – especially the ECB,” said Chris Turner, forex strategist at ING, in a note.
Russian strikes target port infrastructure… Massive Russian airstrikes targeted industrial and port infrastructure in Ukraine’s Odessa region, Reuters reported Monday, citing comments by the region’s governor. Russia’s defense ministry said on Telegram that it hit Vylkove port, fuel depot facilities in Chornomorsk and cargo vessels, all in the Odessa region, as well as a power station in the Kharkiv region, the report said. Russia and Ukraine have mutually targeted ports and grain transportation infrastructure facilities in the Black Sea region in escalated fighting since July, sharply curtailing transport of wheat, corn and other commodities out of the region during the height of the export window.
A chill in the air… The National Weather Service said a cold front moving across the Great Lakes this afternoon and across the Northeast on Monday will bring an autumnal chill. High temperatures in the 60s and even some upper 50s will be possible from Michigan to Maine with widespread morning low temperatures in the middle 30s to middle 40s. The NWS said Frost Advisories and Freeze Warnings are in effect for Monday morning across portions of Minnesota and Wisconsin. The cold front will then progress southward and bring a taste of fall to parts of the Southeast as far south as Tennessee and the Carolinas by Tuesday, and especially on Wednesday when the core of a cool high pressure builds into the eastern U.S.
Drier weather in key crop areas… After being saturated with rain, the western Corn Belt is due for drier weather, as are other key U.S. crop areas in the Great Plains, Midwest and Delta, World Weather said Sunday. Waves of rain in the southeastern United States will induce harvest delays and slow crop maturation rates, the forecaster said, raising concern about cotton fiber quality in southern Georgia and southern Alabama.
In South America, forecasts have shown little change, World Weather said, with Brazil’s key crop areas set to receive rain in the coming week. The greatest amounts are expected in the south from Mato Grosso do Sul and Sao Paulo into Rio Grande do Sul, including Paraguay, Uruguay and eastern Argentina.
Releasing emergency diesel stocks... The Group of Seven nations announced Friday they would coordinate a release of 100 million barrels of oil and fuel products over the next four months, kicking off with “substantial” amounts of diesel within the next 20 days in a bid to knock down soaring prices that have sparked fears of a global inflation wave. The G7 includes the U.S., Germany, Japan, U.K., France, Italy and Canada.
The move also takes the prospect of a U.S. export ban on diesel off the table. The statement said members reaffirmed a commitment to “refrain from export restrictions on energy and energy products between G7 countries…” The Trump administration had weighed a potential export ban, though economists warned it would create a further spike in prices outside the U.S. that posed a threat to global economic growth and would likely deliver only short-term relief on the domestic front.
What’s next for the farm bill… The farm bill has expired, and lawmakers say a new agreement won’t come for at least a month as Congress navigates a complex legislative landscape, reports Michelle Rook. Congress had previously extended the 2018 farm bill three times before the Sept. 30, 2026, expiration date. While several important titles of the farm bill were addressed in recent omnibus legislation, key provisions have lapsed and require renewal. Chairs of the House and Senate Agriculture Committees say they hope to pass a permanent farm bill by year’s end, along with other provisions important to farmers.
Malaysian palm oil futures flat… Futures on Malaysian palm oil were little moved after recent weakness, according to TradingEconomics, with bargain hunters stepping in after prices last week hit their lowest since mid-July. The report said sentiment remained fragile as futures held below MYR 4,500 per tone, pressured by rising production, inventories seen topping 3 million tons and sluggish exports.
Cattle ended last week on a down note… December live cattle futures fell $1.70 to end Friday at $221.475, down 67 1/2 cents for the week. November feeder cattle futures lost $5.20 to $331.15, for a weekly fall of 82 ½ cents. The cattle futures markets saw some profit-taking pressure from shorter-term speculators to end the week, though bulls have kept price uptrends alive on the daily bar charts.
Hogs see short covering… December lean hog futures rose $1.20 to $70.125 Friday, leaving the contract with a weekly gain of $1.10. The hog futures market saw short covering to end the week after hitting a contract low on Thursday. Prices remain trapped in a downtrend on the daily bar chart, which means the path of least resistance for futures prices in the near term will remain sideways to lower.