Good morning!
Grain futures firmer overnight… At 6:00 a.m. CT, December corn was up 3 cents. November soybeans were 4 1/2 cents higher. December soybean meal was $2.10 higher. December bean oil was 2 points higher. December SRW wheat was up 4 3/4 cents and December HRW was 2 1/4 cents up. Prices overnight saw corrective bounces and position evening. Trading in the grain futures may be more subdued early in today’s session, ahead of the late-morning USDA quarterly grain stocks and annual small grains summary reports (See item below). Today is also the last trading day of the month and of the quarter, which makes it an extra important trading day, from a technical perspective. The key outside markets today see the U.S. dollar index weaker. November Nymex WTI crude oil prices are firmer and trading around $90.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 5.21%.
Heavy rains, potential flooding for southern Plains, western Corn Belt… The National Weather Service today said tropical moisture streaming northward out of the Gulf into the southern Plains and central Rockies/central High Plains and into the upper Midwest will produce showers and thunderstorms with heavy rain over the region into Thursday. Considerable flash flooding is possible in some areas, especially across eastern Nebraska into western Iowa today. Flooding impacts may also be possible starting today across central Texas and southern Oklahoma. Widespread rainfall of 2-3 inches, with locally higher totals, is expected, with the heaviest rain across southern Iowa and the southern Plains. A cold front will move into the upper Midwest/Great Lakes today and Thursday.
USDA quarterly grain stocks, small grains summary on deck… Today at 11 a.m. CT comes the release of USDA’s latest quarterly Grain Stocks Report, including final stock figures for the 2025-26 marketing year for corn and soybeans and details on first-quarter wheat use. The trade sees corn stocks coming in modestly below USDA’s September WASDE figure after use remained strong going into the final month of the marketing year, notes Pro Farmer’s Lane Akre. The key, he writes, will be how the Feed & Residual figure stacks up. USDA has Feed & Residual at a record 6.35 billion bushels for the marketing year. USDA will give its final update to 2025 production in this report as well. Analysts pegged 2025 production at 17.003 billion bushels, a modest revision to USDA’s latest figure of 17.021 billion bushels. The drop in production explains analysts drop in ending stocks. See: What to expect from USDA’s September 30 Reports. USDA today will also publish the Annual Small Grains report, detailing 2026-27 wheat production, along with production figures for oats, barley and rye.
Key U.S. inflation report out this morning… The U.S. PCE price index is expected to increase 0.4% month-over-month in August, marking the biggest gain in three months, following a 0.2% rise in July. The core PCE price index, which excludes food and energy, is projected to rise 0.3%, also the most in three months after a 0.2% rise in July. On an annual basis however, headline PCE inflation is expected to remain at 3.7% for a third consecutive month and the core rate is also seen steady at 3.3%, the same as in each of the previous two months. The personal consumption expenditures price index is the primary inflation gauge for the Fed and has been above the 2% target since 2021. TradingEconomics.com
Russia keeping ban on diesel exports at least through October… Russia has extended its ban on most diesel exports through October, “further tightening the global market just as demand rises ahead of the Northern Hemisphere winter and the U.S. considers its own restrictions on exports,” Bloomberg reports. Moscow enacted the ban on diesel exports for producers in July as a wave of Ukrainian strikes against its refineries dragged oil-processing rates to multiyear lows. The export curbs, initially envisaged to last just a matter of weeks, were subsequently extended through August and then to the end of September as the attacks continued. “The decision has been taken to support stability of the domestic fuel market, also taking into account higher demand for motor fuels during the harvesting season,” the Russian government said Wednesday. The ban on exports of most bunker fuel and gasoils has also been extended through the end of October. Diesel’s premium over crude oil is currently at around $82 a barrel in Europe, fair-value data compiled by Bloomberg show. That compares with about $28 a barrel at the end of February, before the U.S.-Iran war and before Ukraine increased its attacks on Russian refineries.
Crude oil shipped out of Middle East now close to pre-war levels… Crude oil steadied after its biggest drop in more than a week on signs Middle East supply has risen to near pre-war levels after Saudi Arabia resumed flows through a pipeline that avoids the Strait of Hormuz. The most-active Brent contract traded near $96 a barrel after dropping 1.7% in the previous session, while West Texas Intermediate is around $90. The 10-day average of crude exports from the Middle East has rebounded to 17.5 million barrels a day, or 98% of pre-war levels, JPMorgan analysts led by Natasha Kaneva said in a note and as reported by Bloomberg. “This comes as Saudi Arabia restored flows through its East-West pipeline to at least 3.5 million barrels a day, about half its capacity, according to people familiar with the matter. A steady flow of crude also appears to be exiting the Persian Gulf through Hormuz on vessels transiting covertly, despite ongoing risks to shipping, helping ease concerns that a deal to reopen the waterway remains elusive.” Oil exports from the Persian Gulf — including so-called dark flows moved clandestinely — rose to 23.3 million barrels a day over the last week, a level in line with the 2025 average, according to Goldman Sachs Group, said the report. Meanwhile, the U.S. will tap more oil from emergency reserves, offering further supply relief. The release of as much as 40 million barrels will be the last of the nation’s 172 million-barrel contribution to a coordinated drawdown of global reserves since the war began, said Bloomberg.
China slaps big tariff on Brazil beef imports… Brazilian beef shipments to China face an additional 55% tariff after reaching Beijing’s annual import quota, “a development that could disrupt trade between the two agricultural heavyweights and redirect global supply flows,” Bloomberg reports. “The world’s largest beef exporter filled the 1.1-million-ton quota as of Sept. 29, China’s Ministry of Commerce said. The new tariff will kick in on Oct. 1, adding to existing duties, according to a statement on its website.” Beijing introduced the quota at the start of the year as part of measures aimed at shielding domestic cattle producers. China has become the world’s biggest beef importer, fueled by rising demand from an expanding middle class after decades of rapid economic growth. “However, a slowing economy has weighed on domestic consumption just as local beef production boomed, reducing the need for overseas supplies. Brazil accounted for roughly half of China’s 2.8 million tons of beef imports in 2025, underscoring the scale of their trade relationship,” said the report. Some Brazilian meat processors had already begun laying off workers or sending them on collective leave as they adjusted to weaker demand in the lead-up to reaching the limit. Australia, another major beef supplier to China, hit its quota in June.
China manufacturing growth improves… China’s official NBS Manufacturing PMI rose to 50.1 in September from 49.8 in August, in line with market expectations. It was the first expansion in factory activity since June, driven by continued growth in demand. Output growth accelerated to a nine-month high (51.7 vs 50.4 in August), while new orders continued to increase, though at a slightly slower pace (50.5 vs 50.6). Meanwhile, employment continued to decline (48.4 vs 48.7). Raw material inventories continued to decline (48.2 vs. 48.1), while supplier delivery times were steady at 50.1. Meanwhile, foreign orders continued to decline (49.2 vs. 48.6), while purchasing activity rose at a faster pace (51.0 vs 50.5). Price pressures intensified, with both input costs (60.8 vs 56.6) and output prices (54.0 vs 50.4) accelerating to five-month highs. Finally, business sentiment remained at a five-month low (53.8), suggesting that firms remained cautious about the near-term outlook.
Malaysian palm oil futures rebound… Malaysian palm oil futures strengthened Wednesday, hovering near MYR4,650 per MT after a recent decline that took prices to an eight-week low. Bargain hunting and firmer Dalian edible oils provided support, while improved September economic activity in China, a major palm oil buyer, also lifted sentiment amid easing weather disruptions and stimulus hopes. Higher global oil prices, which are on track for a third straight monthly gain, further lent support by improving the relative appeal of palm oil as a biodiesel feedstock. In India, import duty cuts on vegetable oils ahead of the festive season improved demand prospects. However, futures are set for their first monthly decline in three months, down about 5% on weak exports. Cargo surveyors reported Sept. 1–25 shipments fell 15.1%–24.3% from August, while inventories climbed to an eight-month high in August and may exceed 3 million MT in September. Production surged 20.84% in the first 25 days of September, underscoring supply pressure.
Cattle futures see mixed trade… December live cattle on Tuesday closed steady at $220.80. November feeders gained $1.625 to $330.90. The live and feeder cattle futures markets saw some technical buying most of the session as price uptrends are in place on the daily bar charts, to encourage the speculative bulls. However, the live cattle bulls faded down the stretch. While overall supply and demand fundamentals are bullish for cattle and beef markets, modestly weaker prices for cash cattle trading last week did limit the upside in live cattle futures. USDA Monday reported cash cattle trading last week averaged $220.67, down $1.20 from last week cash trade average of $221.87.
Lean hog futures see short covering… December lean hog futures on Tuesday rose $1.30 to $69.70. The lean hog futures market saw short covering after December futures hit a contract low Monday. The near-term chart posture in hog futures remains bearish amid price downtrend in place on the daily chart. And the cash hog market prices continue to trend down. The latest CME lean hog index is down $0.55 at $81.21. Today’s projected CME index price is down another 27 cents at $80.94. The national direct five-day rolling average cash hog price quote for Tuesday was $78.47.