Good morning!
Grain futures prices steady to narrowly mixed overnight… As of 6:00 a.m. CDT, December corn was unchanged, November soybeans up 2 1/4 cents and December HRW and SRW wheat futures markets were 3/4 cent to 1 1/2 cents lower. The corn market is consolidating and pausing at mid-week. Soybean bulls are showing modest strength this week as the meal futures market appears to have stabilized. Winter wheat futures are near their contract lows and still trapped in price downtrends that continue to invite the chart-based speculators to the sell sides. The key outside markets today see the U.S. dollar index higher and trading at a nine-week high. Nymex crude oil prices are higher and trading around $62.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11 percent.
Brisk morning across the Midwest… The National Weather Service today said cold low temperatures could drop near or below freezing from the Upper Midwest and Great Lakes into the central/northern Appalachians and parts of the Northeast/northern Mid-Atlantic this morning and Thursday morning, prompting freeze warnings and watches, and frost advisories. Meanwhile, above-normal temperatures are likely across the intermountain West into the northern Plains today, expanding into the rest of the central U.S. Thursday as an upper ridge builds.
U.S. government shutdown now the fourth-longest in modern history… Most federal government shutdowns last only hours or a few days. The current lapse is now the fourth-longest in modern history. One sign the government shutdown may not last much longer is U.S. air travel delays. Reports said the last government shutdown in late 2018-early 2019 was ended by air travel delays. Apparently, U.S. lawmakers on both sides of the aisle get spooked by angry U.S. travelers/voters. Bloomberg reported air traffic into and out of Chicago and Dallas was plagued by delays Tuesday night due to staffing shortages caused by the government shutdown, according to advisories from the Federal Aviation Administration. Delays at Dallas Fort Worth International Airport, a main hub for American Airlines Group Inc., reached an average of 30 minutes Tuesday. With the shutdown now a week old, air traffic controllers and other essential staff are still working — even though they won’t be paid until the impasse between Democrats and Republicans ends, and a resolution is reached.
Another heavyweight, The Bank of England, says stock markets overvalued… Stretched valuations for artificial intelligence companies and challenges to the Federal Reserve’s independence have fueled the risks of a “sharp market correction,” the Bank of England said today, in its strongest warnings yet. In its quarterly financial stability update, the U.K. central bank said asset valuations have continued to rise and credit spreads tighten since its June review, despite “persistent material uncertainty around the global macroeconomic outlook.” Equity market valuations appear “stretched” with “technology companies focused on AI” particularly vulnerable, especially if “expectations around the impact of AI become less optimistic,” officials said, according to minutes of the Financial Policy Committee meeting held on Oct. 2 and reported by Bloomberg. The latest BOE report follows similar comments from other notables, including famed trader Paul Tudor Jones, who this week said the U.S. stock market may be entering a blow-off top phase.
U.S. dollar hits nine-week high as Euro currency sinks amid French political crisis… The USDX has rallied sharply the past three weeks, hitting a nine-week high today, while the Euro currency sunk to a two-month low today, mostly due to a French political crisis that has the European Union and European markets on edge. Outgoing French Prime Minister Sebastien Lecornu has expressed optimism that an accord can be reached to allow the formation of a new government without fully endorsing a new proposal to rethink a controversial pension law, Bloomberg reported. Former French prime minister Elisabeth Borne said she was open to a suspension of the pension law if it meant bringing stability to the country, which would be a major concession to the Socialist Party. Lecornu noted that the goal of getting a budget by the end of the year “distances the prospect of a dissolution” of the National Assembly and “requires that everyone have the capacity to move forward”. The greenback got an additional boost today as the New Zealand dollar tumbled to a six-month low after its central bank delivered a larger-than-expected interest-rate cut and signaled a willingness to ease its monetary policy further.
Retail chicken prices declining… Spot chicken prices in the U.S. have fallen 18% since their summer barbecue-season peak as supply is finally catching up with booming consumer demand, according to a Bloomberg report. Some of the largest global meat producers have leaned on poultry profits to cushion losses at their beef businesses, which have been impacted by the worst U.S. cattle shortage in decades. “Chicken producers continue to benefit from low feed costs and resilient demand, as consumers look for cheaper alternatives than pricey beef,” said the report. The U.S. has seen an increase in the number of chick placements, improved egg fertility rates and seasonally strong poultry slaughter numbers — all pointing to rising chicken meat supply. USDA has raised its 2025 broiler production estimate for four straight months.
Malaysian palm oil futures rally to 7-Week High… Malaysian palm oil futures rose about 2% to over 4,500 per MT and reaching a seven-week high Wednesday. The spike was boosted by stronger soyoil on the Chicago exchange, higher crude oil prices, and a weaker ringgit. Rising exports also bolstered sentiment, with cargo surveyors reporting shipments up 7.3–9.6% from August, while Reuters projected Malaysian stockpiles fell 2.5% to 2.15 million tons last month. Indonesia, the top producer, is pressing ahead with plans to make B50 biodiesel mandatory in 2026 and may introduce 10% bioethanol in gasoline to cut emissions and reduce fuel imports. China, a key buyer, is set to resume market activity soon. Gains were capped by caution ahead of September’s monthly data, alongside weak orders from India, the world’s largest consumer, which fell 15.9% to 833,000 MT in September and may drop further to 600,000 MT this month as festive buying peaks.
Cattle futures supported by rebound in boxed beef cutout values… The live and feeder cattle futures markets Tuesday saw mixed action on both sides of unchanged much of the session. Then in late trading the bulls put their foot on the gas. A rise in boxed beef cutout values this week has boosted bullish enthusiasm in cattle futures. However, solid technical resistance levels lie just above present prices, which may keep the chart-based speculator bulls timid in the near term. Also, after three up-days in a row, live and feeder cattle futures are now due for corrective pullbacks. USDA at midday Tuesday reported very light cash cattle trade taking place at an average of $227.00. Monday the agency reported cash cattle trading last week averaged $230.76. That’s down $1.89 from the prior week’s USDA reported average of $232.65.
Technical selling in lean hog futures… The lean hog futures market saw more technical selling featured Tuesday, after last week’s price downdraft produced serious near-term chart damage, to suggest a market top is in place. Selling interest was somewhat limited Tuesday amid lean hog futures’ discounts to the cash hog index. Cash and fresh pork fundamentals have been weakening lately. The latest CME lean hog index is down 82 cents at $102.02. Today’s projected cash hog index is down another 60 cents at $101.42. Tuesday’s national direct 5-day rolling average cash hog price quote is $98.80.