Good morning!
Grain prices mixed to modestly up overnight… As of 6:00 a.m. CDT, December corn was up 1 cent, November soybeans up 4 3/4 cents and December winter wheat futures markets were 1/4 to 2 1/4 cents lower. Trading in the grain markets may be more subdued today, ahead of Friday morning’s monthly USDA supply and demand report. The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are weaker and trading around $63.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.05 percent.
Another key U.S. inflation report out today… This morning comes the consumer price index report for August. Analysts expect the August CPI report to show a 2.9% rise, year-on-year. The core CPI (excluding food and energy) is seen coming in at up 3.1% annually. The CPI data comes after a surprisingly tame producer price index report on Wednesday. PPI saw its first decline in four months. On the year, PPI rose 2.6% in August, below the 3.1% rise in the July report and forecasts of up 3.3%. Wednesday’s PPI data fell squarely into the camp of the U.S. monetary policy doves, who want to see more aggressive U.S. interest rate cuts. The Fed’s FOMC meets next week and is expected to cut the Fed funds rate range by 0.25%.
U.S. biofuel stocks getting hit… Shares of U.S. biofuel companies have slumped on fears Trump administration policies may fall short of fully offsetting exemptions from mandates requiring refineries to blend renewable fuels into gasoline and diesel. The Trump administration is considering a plan that would require large refiners to take on “half or less” of the blending obligations originally assigned to small refineries that received waivers, Reuters has reported, citing people familiar with the matter, said a Bloomberg report. Such a move would reduce near-term demand for crop- and waste-based fuels, tempering investor enthusiasm for biofuel producers following the EPA’s June proposal to significantly raise production quotas for 2026 and 2027. The issue has emerged as a key point of contention between farm and oil lobbies as they respond to Trump’s proposed biofuel policy. Shares of crop processors Bunge Global SA and Archer-Daniels-Midland Co. slumped the most since April on Wednesday. Ethanol suppliers Valero Energy Corp. and Green Plains Inc. plunged as much as about 5%. A key price indicator for biofuels — the so-called RINs — traded at the lowest levels since June.
International Energy Agency ups global crude oil demand forecast… World crude oil demand is forecast to increase by 740,000 barrels per day (bpd) year-on-year, in 2025, up marginally from last month’s IEA report, “with resilient deliveries in advanced economies contrasting with relatively muted consumption in emerging economies.” Global oil supply inched up in August to a record 106.9 million bpd as OPEC+ continued unwinding output cuts and non-OPEC+ supply hovered near all-time highs. World oil production is now projected to rise by 2.7 million bpd, to 105.8 million bpd this year and 2.1 million bpd, to 107.9 million bpd next year, of which non-OPEC+ countries account for 1.4 million bpd and just over 1 million bpd, respectively, said the IEA. “Oil markets are being pulled in different directions by a range of forces, with the potential for supply losses stemming from new sanctions on Russia and Iran coming against a backdrop of higher OPEC+ supply and the prospect of increasingly bloated oil balances,” said the IEA in its September report.
China wants hog producers to cut production… China’s government has summoned its biggest hog producers to discuss measures to cut pork production, in its latest move to tackle oversupply and bolster pork prices, reports Bloomberg. Some 25 farming operations have been asked to gather in Beijing on Sept. 16 to share their plans on output control and highlight measures taken so far, according to a notice issued to the firms by China’s agriculture ministry and viewed by Bloomberg. Attendees must submit details of their targets for cutting sow numbers by January and their production plans for the year ahead, the ministry’s animal husbandry bureau said. The meeting, first reported by local media, will include the government’s top economic planning agency, the National Development and Reform Commission. China, the world’s largest pork producer, has urged farmers to cut the nation’s breeding herd this year, to deal with a supply glut and deflationary pressures in the economy. Wholesale prices of pork have dropped almost 25% the past year as consumption has weakened due to China’s economic slowdown.
An early warning on European Union economy… Germany’s export sector remains “mired in crisis due to a combination of slumping demand, rising costs and escalating protectionism,” according to a lobby group and reported by Bloomberg. Exports from Europe’s biggest economy are expected to contract by 2.5% this year, roughly in line with a January forecast but still “an alarming picture,” the BGA industry association said today. “German exporters are battling on many fronts,” BGA President Dirk Jandura said in an emailed statement. “Global trade risks persist, driven by rising barriers to commerce, geopolitical tensions and a slowing world economy.” Germany’s economy has broadly stagnated since Russia’s invasion of Ukraine in 2022 and U.S. trade tariffs.
Weekly USDA grain export sales expectations… This morning’s weekly USDA export sales report is expected to show U.S. corn export sales of 900,000 to 2.4 million MT in the 2025-26 marketing year. U.S. soybean export sales of 400,000 to 1.6 million MT are expected in the 2025-26 marketing year. U.S. wheat export sales of 300,000 to 650,000 MT are seen in the 2025-26 marketing year. The figures come from a Reuters survey of grain market analysts.
USDA monthly supply and demand report out Friday morning… According to a Reuters survey of analysts, the agency will estimate U.S. corn production at 16.516 billion bushels and an average yield of 186.2 bushels per acre. That compares to USDA’s August production estimate of 16.472 billion bushels and an average yield of 188.8 bushels an acre. The average of the analysts surveyed by Reuters shows a U.S. soybean production estimate of 4.271 billion bushels and an average yield of 53.3 bushels an acre in the September report, compared to the August USDA production estimate of 4.292 billion bushels and an average yield of 53.6 bushels an acre. Friday’s USDA report is out at 11:00 a.m. CDT.
Malaysian palm oil futures prices gain… Malaysian palm oil futures hovered above MYR 4,400 per MT Thursday after declines in the prior two trading sessions, helped by a further weakening of ringgit and bets of strong demand from top buyer India ahead of the mid-October festive season. India’s palm oil imports surged 16% in August to 993,000 MT, the highest since July 2024, as refiners built inventories with palm oil trading at a steep discount to soyoil. Industry data showed that end-August palm oil stocks rose 4.2% from July to 2.2 million MT, while production rose 2.4% to 1.86 million MT.
Cattle futures bulls work to stabilize prices… October live cattle futures Wednesday rose 97 1/2 cents to $231.15. September feeder cattle gained $1.50 to $353.20. The cattle futures markets Wednesday saw modest corrective bounces from strong to limit-down losses posted on Tuesday. The bulls are by no means out of the woods yet. They will have to show better follow-through buying interest to suggest this week’s lows are just the latest “reaction lows” in the mature bull market runs. That’s some heavy lifting for the bulls to do. Worrisome for the cattle market bulls is this week’s revised U.S. jobs data that showed only about half of the jobs gained than were previously reported, up to the year ending through March. That and recent weaker U.S. economic data could sap consumer confidence that would show up as less demand for beef at the meat counter. There was light cash cattle trading reported by USDA Wednesday, with steers averaging $238.62 and heifers averaging $238.94. USDA said last week’s cash cattle trade averaged $242.55.
Lean hog futures bulls keep their pedal to the metal… October lean hog futures Wednesday rose 70 cents to $96.825 and hit a contract high. Wednesday’s gains in the hog futures market saw more technical buying featured amid the solidly bullish near-term chart posture for October hogs. There are also some ideas that consumers may be more reluctant to buy beef at the meat counter this fall, following some recent downbeat U.S. economic data. The latest CME lean hog index is down 4 cents to $105.87 as of Sept. 6. Today’s projected cash hog index is up 6 cents to $105.93. Wednesday’s national direct 5-day rolling average cash hog price quote was $106.55.
USDA reports today—Thursday
-- Weekly export Sales
-- Meat Price Spreads
-- Slaughter Weekly