Good morning!
Grain futures solidly lower overnight… At 6:00 a.m. CT, December corn was down 10 cents and hit a four-week low. November soybeans were 13 cents down. December soybean meal was $5.50 lower. December bean oil was 74 points lower. December SRW wheat was down 16 cents and hit a four-week low. December HRW was down 16 1/4 cents and hit a six-week low. The bears are growling late this week as so far no specifics on new U.S. ag purchases from China have come out of the Trump-Xi summit. (See item below.) Also, the near-term technical postures for corn and winter wheat futures have deteriorated significantly this week, which is giving the chart-based specs ammo to play the short sides. December corn has seen a downside breakout from its trading range, while winter wheat futures are now trending down on their daily charts. Grain bears today will also be working on producing technically bearish weekly low closes, which would put them in position for follow-through selling pressure come Monday. The key outside markets today see the U.S. dollar index lower. November Nymex WTI crude oil prices are lower and trading around $93.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 5.15%.
“Trump-Xi Summit Goes Big on Pomp But Small on Substance” … That’s an overnight headline from Bloomberg. “President Trump’s fete for China’s Xi Jinping has been heavy on pageantry and platitudes but light on substantive announcements,” said the report. “Through Thursday evening in Washington, the most significant news tied to the gathering was announced before it even began, when Treasury Secretary Scott Bessent said just as Xi’s plane landed that the two sides had extended a trade truce for another two months. Anticipated agreements on tariff cuts and a new line of communication on artificial intelligence have yet to be announced, and Chinese stocks in Hong Kong declined, suggesting traders saw a lack of progress.” Trump repeatedly cast Xi as a friend rather than the U.S.’s foremost geopolitical rival despite their nations’ intensifying competition on AI and divides over trade. Kicking off three hours of events at the White House, Trump hailed his “truly great friendship” with Xi, saying “there’s much we can achieve.” Still, expectations were low going into the summit that it would produce breakthroughs on major disagreements. “Commodities markets are looking for specifics on trade in agriculture and energy between the two powers, including Chinese purchases of U.S. crops and natural gas. So far, details haven’t materialized, leaving traders awaiting further statements from Washington and Beijing,” said another report from Bloomberg.
Crude oil prices retreat on potential for U.S.-Iran Hormuz deal… Brent crude fell toward $105 and WTI toward $92 per barrel on Friday, snapping a two-day rally amid reports the U.S. and Iran are considering a phased deal that could reopen the Strait of Hormuz and lift a U.S. blockade on Iranian ports. Efforts to reach a breakthrough were reportedly underway on the sidelines of the UN General Assembly, with Qatari officials mediating the talks. A sequenced deal would be similar to the memorandum of understanding that the US and Iran struck in mid-June, which led to a fragile ceasefire that collapsed just weeks later. Iranian Foreign Minister Abbas Araghchi told a group of journalists and academics that his country offered the US a new proposal to reopen the Strait of Hormuz if certain conditions were met, said a Bloomberg report. Iran has maintained that it must retain control over Hormuz and would not accept a deal unless the U.S. eases military pressure and removes its blockade. Meanwhile, a White House official said President Trump remained open to talks with Iran but stressed that the U.S. had little need to negotiate given its strong position following the sanctions campaign and blockade. Elsewhere, tensions in the Middle East escalated after Iran-aligned Houthi militants in Yemen launched missiles toward Saudi cities, including Yanbu and Taif.
U.S. Treasury yields holding above 5%, worrying market watchers… “As yields on U.S. Treasuries soar past one high after the next, a reality is sinking in deeper across Wall Street and Washington: More than merely a bond-market slump, this might just be a fundamental shift,” said a Bloomberg report. “Myriad forces have combined to push the government’s borrowing costs higher — from $100-a-barrel oil and the AI spending boom, to yawning U.S. budget deficits adding to a record $40 trillion debt load — all against a backdrop of a Federal Reserve bent on cooling inflation that’s run well past target for years.” The selling pressure intensified this week as energy prices rose early on, and data showed U.S. businesses are humming along, giving an already hawkish central bank more reasons to keep raising interest rates. Now, nearly all U.S. benchmark yields are hovering around or above 5%, with five-year Treasuries surpassing that threshold on Wednesday for the first time since 2007.
Trump administration continues to debate short-term ban on U.S. diesel exports… President Trump’s economic advisers continue analyzing the ramifications of a potential short-term ban on U.S. diesel exports, underscoring the seriousness of the administration’s consideration of the idea, said a Bloomberg report. “Senator John Hoeven, a Republican from North Dakota, said the study being conducted by National Economic Council Director Kevin Hassett, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer aims to inform the administration’s decision-making on possible export curbs. ‘The idea is that you get Bessent and Greer and Hassett to do that analysis and if, on a short-term basis — and we are in harvest season right now — it would show that it would help, then it is something we should consider doing,’ Hoeven said,” according to the Bloomberg report. “Several farm-state lawmakers have urged Trump to limit foreign sales of U.S. diesel, as conflicts in Russia and the Middle East take supplies offline and spike prices for the fuel right at the peak of the fall harvest season in the U.S.” A timeline for the government’s economic analysis was not immediately available. “But the study, described by people familiar with the matter, is expected to forecast a mix of potential consequences — including both lower and higher prices — that could be used by administration officials either to justify or ward off a ban. The study shouldn’t be viewed as an indication the administration is leaning one way or the other, one of the people said.”
Still more rain coming to the Plains, Midwest… The National Weather Service today said rains, some heavy, will continue over much of the Corn Belt the next several days, with Iowa in the bullseye. Upper-level energy and moisture moving northwestward from the Gulf will produce showers and thunderstorms with heavy rain over parts of the southern High Plains today. Showers and thunderstorms will continue over parts of the southern Rockies, southern High Plains, and central Plains through early Saturday morning. As moisture continues to stream northward over the Plains, showers and thunderstorms will develop over parts of the central/southern Plains and the upper/Middle Mississippi Valley on Saturday into Sunday morning. Meantime, a Nor’easter will bring significant coastal impacts to the Mid-Atlantic and New England through the weekend. Moderate to major coastal flooding, heavy rain, strong winds and high surf expected.
China backs away from Brazil soybeans… Chinese soybean imports from Brazil have slowed to a trickle due to high prices that have squeezed crush margins, Bloomberg reported, raising the risk of a supply crunch. The report said commercial purchases of Brazilian soybeans totaled fewer than five cargoes over the last two weeks, down from an average of around 20 in August. Buyers were awaiting the outcome of the bilateral summit meeting between Chinese President Xi Jinping and U.S. President Donald Trump, Bloomberg reported, noting that private processors in China have relied heavily on Brazilian beans after U.S.-China trade tensions escalated in 2025. A removal of a 10% tariff on U.S. soybeans would make supplies more attractive to China’s commercial crushers. In 2025, China had no alternative and kept buying from Brazil through the end of the year,” AgResource Brasil’s Raphael Mandarino told Bloomberg.
U.S. hog herd shrinks… USDA’s quarterly Hogs & Pigs Report released Thursday afternoon put the U.S. inventory at 74.3 million head, down 2% from the same time last year. Breeding inventory was down 1% year over year, while market-hog inventory was down 2%. Analysts surveyed by Reuters had expected 0.8% declines across the board. Producers intend to have 2.85 million sows farrow during the September-November 2026 quarter, down 2% from the actual farrowings during the same period one year earlier, and down 2% from the same period two years earlier, USDA said. Intended farrowings for December 2026-February 2027, at 2.80 million sows, are up 2% from the same period one year earlier but down 1% from the same period two years earlier.
El Niño likely to crimp Asian palm oil production next year… Indonesia and Malaysia are expected to produce less palm oil in 2027 as prolonged dry weather caused by a strong El Niño will depress yields next year, tightening global supplies and lifting prices, said a Bloomberg report. “Production in the world’s two biggest growers is forecast to fall about 3%, according to the median estimates of seven analysts surveyed by Bloomberg News for supplies from the two countries. Output will likely decline to 49 million tons in Indonesia and 19.5 million tons in Malaysia. Combined with Indonesia’s expanding palm-based biodiesel mandate and falling yields from aging trees, persistent dry weather could curb supplies and drive up benchmark palm oil prices toward 5,000 ringgit ($1,226) a ton next year, according to three analysts.” Agricultural markets have been bracing for the impact of a powerful El Niño, with hot and dry conditions expected to persist beyond the usual April-September period in Indonesia. The effects on palm yields typically emerge with a lag.
Malaysian palm oil futures prices down… Malaysian palm oil futures on Friday slipped around 2% to below MYR 4,700 per MT, extending last week’s decline to a six-week low. A stronger ringgit and weaker soybean oil on the Chicago Board of Trade weighed on sentiment. Meanwhile, a pullback in crude oil after recent gains added pressure amid expectations that the Strait of Hormuz could reopen and U.S. curbs on Iranian exports could ease. Rising Malaysian inventories and sluggish demand from India, the world’s largest vegetable-oil buyer, further dampened the market, though industry officials noted El Niño’s impact has yet to materialize. Still, losses were partly cushioned by India’s move to cut import duties on crude and refined vegetable oils ahead of the September–November festive season to curb food inflation. On the supply side, Indonesia may face a shorter-than-usual wet season from November, potentially affecting crop conditions. For the week, futures are down about 4.6%, erasing the prior week’s gains in a steep reversal.
Cattle futures markets fade amid weaker cash trade… October live cattle on Thursday fell $1.85 to $219.075. November feeder cattle lost $1.425 to $328.075. The live and feeder cattle futures markets saw selling pressure due in part to modestly weaker cash cattle trading so far this week. USDA at midday Thursday reported light cash trading this week, with steers averaging $221.53 and heifers $220.00. The agency on Monday said cash cattle trading last week averaged $221.87, down 95 cents from $222.82 the week prior. A small group of White House officials is exploring whether to cut back President Trump’s decision to increase foreign beef imports, according to a Politico report. “The proposal to reduce the amount of imports is being discussed within the Domestic Policy Council headed by Vince Haley, a longtime Trump speechwriter and former campaign official, and a few other officials at the White House, according to two people with direct knowledge of the conversations.
Lean hog futures see technical selling resume… October lean hog futures on Thursday lost $0.675 to $79.20. The lean hog futures market saw modest technical selling resume. The near-term chart posture in hog futures remains bearish amid a weakening cash hog market. The latest CME lean hog index is down $0.45 at $82.47. Today’s projected CME index price is down another 27 cents at $82.20. The national direct five-day rolling average cash hog price quote for Thursday was $79.93.