Good morning!
Grain futures prices stabilize overnight… As of 6:00 a.m. CDT, December corn was up 1/2 cent, November soybeans up 3/4 cent and December HRW and SRW wheat futures markets were 1 to 2 cents lower. The grain markets were roiled Friday on rising China-U.S. trade tensions (see below) but have settled down, for the moment, as traders await fresh news on the matter. The U.S. appears to be walking back some of its harsh rhetoric issued Friday. The U.S.-China trade situation and no fresh USDA data being issued will likely continue to limit buying interest in the grains in the near term. The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are up and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.04 percent.
Trump tries to temper rapid, surprising deterioration in U.S.-China relations… President Trump’s administration on Sunday signaled openness to a deal with China to quell fresh trade tensions while warning that recent export controls announced by Beijing last week are a major barrier to talks. Trump wrote on social media Sunday: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!” Meantime, Vice President Vance Sunday called on Beijing to “choose the path of reason” in the latest spiraling trade fight between the world’s two leading economies, claiming the U.S. has more leverage if the fight drags on. Trump on Friday announced an additional 100% tariff on China as well as export controls on “any and all critical software” beginning Nov. 1, hours after threatening to cancel an upcoming meeting with Chinese leader Xi Jinping. That came after China late last week added new port fees on U.S. ships, started an antitrust investigation into Qualcomm Inc., and unveiled sweeping new curbs on its exports of rare earths and other critical materials. China over the weekend said the U.S. should stop threatening it with higher tariffs and urged further negotiations to resolve outstanding trade issues. The surprising—and grain-markets-bearish--turn of events came after Trump last Thursday said his summit meeting with Xi would have a major focus on China purchasing more U.S. soybeans. The U.S. attempting to walk back the latest trade flare-up with China did somewhat assuage the marketplace. In overnight trading, the U.S. stock indexes posted solid rebounds, crude oil prices were higher and the grain futures markets were near steady.
American Soybean Association reacts to Trump apparently calling off summit with Xi… The American Soybean Association Friday expressed concern following the news President Trump has apparently canceled his planned meeting with Chinese President Xi. ASA President Caleb Ragland, a soybean farmer from Kentucky, said “ASA is extremely disappointed that the planned meeting at the end of the month between President Trump and Chinese President Xi is canceled as of right now due to the recent actions of the Chinese government to further restrict access to rare earth minerals. ASA was hopeful that these upcoming talks between the United States and China would lead to a deal that would restore U.S. soybean exports to China, traditionally soybean farmers’ largest export by far. Trade wars are harmful to everyone, and these latest developments are deeply disappointing at a moment when soybean farmers are facing an ever-growing financial crisis. ASA hopes that talks can be put back on track to restore markets and trade relationships.”
China soybean imports hit record high in September… China’s soybean imports hit a record high for the month of September, with the country bringing in 12.9 million MT of soybeans, according to a Bloomberg report. Chinese crushers have been bolstering supplies of the oilseed with shipments mainly from Brazil, and shunning U.S. cargoes due to high tariffs and political risks. September arrivals were also near the highest ever monthly level, which was recorded in May, and brought total imports for the first nine months of the year to 86.18 million MT, up 5.3% from a year ago, according to Bloomberg. “That ample supply gives Chinese crushers a comfortable cushion and piles even more pressure on American farmers, who are now bringing in a harvest with their top customer turning elsewhere,” said the report.
Mostly dry weather in Midwest through Friday… World Weather Inc. Sunday evening reported the lower and eastern U.S. Midwest, Delta and southeastern states will be drier biased through Friday. Rain is expected in each of these areas during the following full week, occurring in waves and offering some moisture to improve topsoil moisture. “Drying this week will be good for fieldwork. Rain next week will be good for winter crop emergence and establishment,” said the forecaster. U.S. hard red winter wheat areas will experience an alternating pattern of rain and sunshine during the next two weeks, supporting wheat planting, emergence and establishment. Summer crop harvesting will advance around the precipitation. The U.S. northern Plains and upper Midwest will not receive much precipitation early this week, although some timely rain is likely late this week and next week. Saskatchewan and Manitoba will receive rain and snow tonight into Monday. Snowfall of 2 to 6 inches is expected with local totals of upwards to 9 inches possible in northeastern Saskatchewan and northwestern Manitoba.
Crude oil prices slump on China-U.S. tensions… Nymex WTI crude oil futures dropped by over $3.00 a barrel Friday and to a 4.5-month low near $58.00 a barrel as renewed US-China trade tensions rattled markets. Crude oil prices did rebound overnight, gaining around $1.00. A hot U.S.-China trade war could slow global economic growth and curb oil demand. The decline was compounded by ongoing bearish sentiment from rising global supply, including higher output from OPEC-plus and non-OPEC oil producers. Easing tensions in the Middle East, including progress toward a Gaza ceasefire, also removed a key risk premium from oil prices. Risk-averse investors pulled back from equities on Friday, amplifying downward pressure on oil.
No signs U.S. government shutdown close to ending… President Trump’s order of permanent layoffs has hardened Democrats’ distrust of Republicans and may prolong the government shutdown, according to a report from Bloomberg. Democrats see the funding fight as their first real moment of leverage and are focusing on health care costs, which they believe will resonate with voters ahead of next year’s midterm elections. Senate Democrats say they won’t drop their filibuster blocking a reopening of the government without upfront negotiations on their demands, including an extension of Affordable Care Act premium subsidies. Republicans have dismissed Democrats’ efforts as nothing more than political opportunism, arguing their real concern is satisfying a liberal base eager to take on Trump. Some moderates, including Republicans Susan Collins of Maine, Lisa Murkowski of Alaska and Democrat Jeanne Shaheen of New Hampshire have been trying — so far unsuccessfully — to negotiate an end to the standoff and unlock a broader deal on health care and the federal budget.
India trade delegation coming to United States… An Indian trade group will visit the U.S. this week as the two nations work toward clinching a deal by the fall deadline, according to a Bloomberg report. India is seeking to buy more natural gas from the U.S. as part of the trade talks, according to an official. The U.S. and India had previously committed to a bilateral agreement to be completed by the fall of this year. During earlier talks, India offered concessions to the U.S., including easing some restrictions on the import of genetically modified corn, and offering to buy more American defense and energy goods, Bloomberg reported.
“Short-squeeze” in the silver market drives price to near record high… Spot silver prices hit the highest level in decades as a historic short squeeze in London intensified, “with a fresh surge in prices adding urgency to a worldwide hunt for bullion that could alleviate the mismatch between demand and supply,” reported Bloomberg. Spot silver climbed as much as 3.1% to near $52.00 an ounce, exceeding last week’s peak, while spot gold surpassed $4,070.00 an ounce to a record high. Platinum and palladium also surged, amid signs that market stresses caused by surging investor demand are starting to spread to other precious metals. Concerns about a lack of liquidity in London are prompting the squeeze. Benchmark prices in London have soared to near-unprecedented levels over New York prices, prompting some traders to book cargo slots on transatlantic flights for silver bars — an expensive mode of transport typically reserved for gold — to profit off the massive premiums in London.
Malaysian palm oil futures lower… Malaysian palm oil futures fell around 1.7% on Monday, slipping below MYR 4,500 per MT and marking the second session of sharp losses. A stronger ringgit and weakness in rival Dalian oils pressured sentiment. Industry data showed end-September inventories rose 7.2% from August to 2.36 million MT, the highest in near two years. Separately, Kuala Lumpur projects average crude palm oil prices in 2026 to range between MYR 3,900 and MYR 4,100, citing increased global supply and stronger output from competing oils. In top buyer India, October demand is expected to fall below 600,000 MT after a 16% drop in September. Still, losses were capped by strong exports, with Malaysian shipments rising 9.9–19.4% in the first 10 days of October, according to cargo surveyors. Output shrank 0.73% in September to 1.84 million MT, the first monthly drop in three months.
Cattle market bulls keep their foot on the gas… December live cattle futures on Friday rose $2.625 to $242.525 and closed at a contract high close and for the week were up $8.025. November feeder cattle futures gained $1.85 to $375.90 and hit a contract/record high and for the week up $20.475. Cash cattle trading turned more active Friday USDA at midday Friday reported steers fetched an average price of $230.71 and heifers an average of $231.23. That compares to last week’s average cash cattle trade at $230.76. An increase in movement of boxed beef last week indicates the recent price pullback spurred better retail demand as consumers continue to choose beef. Beef packer margins remain solidly in the red despite the recent improvement in boxed beef prices. Positive for the cattle markets in the coming weeks is seasonals that suggest lower cattle slaughter levels. Also, the latest USDA cattle-on-feed report reminds that cattle supplies in U.S. feedlots remain historically tight.
Lean hog futures market rapidly heading south… December lean hogs Friday saw a technically bearish weekly low close, which will further embolden the chart-based speculative bears early this week. However, the market is now short-term oversold, technically, which also argues for a corrective bounce this week. Serious near-term technical damage has been inflicted to suggest a market top in hog futures is in place. Bulls are hoping lean hog futures’ discounts to the cash hog index will limit selling interest in futures next week. The latest CME lean hog index fell 62 cents to $100.08. The index has dropped around $3.00 the past week. Today’s projected cash index price is down another 65 cents to $99.43. The national direct five-day rolling average cash price Friday was $97.12.