Good morning!
Grain futures solidly lower overnight… At 6:00 a.m. CST, December corn was down 12 1/2 cents. November soybeans were 12 3/4 cents lower. December soybean meal was down $0.90. December bean oil was 136 points lower. December SRW and HRW wheat were 26 to 29 cents lower. Heavy profit-taking pressure from the shorter-term traders has set in for the grain futures markets late this week. Rip-roaring bull markets in the grains need fresh fundamental news often, in order to keep their strong price uptrends alive. So far on this day, it appears grain traders are wondering if all the bullish fundamental news in the grain markets has already been factored into futures prices. On tap today is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index lower. October Nymex WTI crude oil prices are up, hit a six-week high, and trading around $93.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.78%.
Trump says new military action against Iran will be short-lived… President Trump Wednesday afternoon said renewed attacks on Iran would likely be short-lived, reiterating his claim that the U.S. controls the Strait of Hormuz. The U.S. military carried out a second round of strikes on Iran at mid-week, targeting radar systems and mine-laying capabilities, and Iran retaliated with drone and missile volleys on U.S. bases. “We took out all of the new equipment that they tried to build along the Strait of Hormuz — some defensive, some offensive,” Trump said of the earlier strikes and as reported by Bloomberg. “It was a very heavy attack last night, and we’re prepared to do another one any time we want.” There are still signals the conflict could be prolonged for months. The U.S. is extending troop deployments in the Middle East to maintain its presence of 50,000 personnel and give Trump flexibility on military options, the Wall Street Journal reported, citing people familiar with the matter.
Scattered showers/thunderstorms linger over much U.S.; heat remains in southern half… The National Weather Service today said there will be moderate rain over parts of the Northeast /Great Lakes into the Northern Plains today. Severe thunderstorms will also develop over the area. In addition, a second area of showers and severe thunderstorms will develop over parts of the Northern Plains into the Upper Mississippi Valley. The showers and severe thunderstorms will continue over parts of the Ohio Valley into parts of the upper Great Lakes/upper Mississippi Valley and continue over parts of the region through Saturday. The remnants of Tropical Depression EDOUARD, which moved inland over eastern Texas, are forecast to move northward into northeastern Texas and dissipate by this evening. EDOUARD will produce heavy rain over parts of eastern Texas today. Monsoonal moisture will increase over parts of the Southwest, producing showers and thunderstorms with heavy rain. Heat will build over parts of the middle Mississippi Valley, the Ohio/Tennessee Valleys, and the Mid-Atlantic into Saturday.
EU exploring “all possible lanes” to get grain from Ukraine… The European Union is looking “at all possible lanes” to support grain exports from Ukraine and is working to blunt the financial impact of extreme weather on farmers, EU Agriculture Commissioner Christophe Hansen told Bloomberg in an interview. Hansen said the EU has an important role to play in food security as a major agri-food exporter, noting that lower EU production “will as well mean eventually shortages somewhere else in the world.” Hansen said the bloc is in ongoing discussions with Ukraine and its neighbors to support exports, including via so-called solidarity lanes, though efforts have been complicated by low water levels on the Danube.
Baltic dry index hits nearly three-year high… The Baltic Exchange’s dry bulk freight index, which tracks rates for ships carrying dry bulk commodities, surged by 5.5% by 3,331 points on Wednesday, reaching its highest since December 2023. Gains were broad-based, led by the larger vessel segments. The capesize index, which typically transports 150,000-ton cargoes including iron ore and coal, jumped 8.1% to its highest since December at 5,642 points, supported by strong Atlantic and Pacific activity, despite weaker iron ore futures. At the same time, the panamax index, which tracks vessels carrying around 60,000 to 70,000 tons of coal or grain, rose 2.9% to a more than three-week high of 2,429 points, marking the eighth session of gains. Among smaller vessels, the supramax increased further by 0.7% to 1,657 points. TradingEconomics.com
Financial marketplace eyeballing Japanese yen, possible intervention… The Japanese yen jumped sharply today, for a second day, reversing a month of gradual decline, as traders lifted bets on Japanese interest-rate hikes and were on high alert to the risk of authorities wading back into the market to boost the currency. “The about-turn in sentiment comes as investors focus on factors that may bolster the beleaguered currency, after weeks of questioning the long-term effectiveness of intervention by Japan and the U.S. to support it. News from the nation’s biggest pension fund is also fueling renewed speculation of more positive fund flows,” said a Bloomberg report. The yen advanced as much as 1.5% to 156.36 per dollar today, on track for its best day since Tokyo and Washington entered the market to prop up the currency just over a month ago. In London trading the yen briefly trimmed some of its gains following a Bloomberg report that the Bank of Japan is leaning toward a quarter-point rate rise this month, which cooled rising speculation of a bigger hike.
Federal Reserve report: U.S. ag economic conditions remain strained… The Federal Reserve on Wednesday afternoon released its August “Beige Book”, a summary of anecdotes about economic conditions across the central bank’s 12 districts. The report found economic activity across the U.S. had increased modestly since early July, with 10 districts reporting “slight to moderate” growth and two reporting no change. Inflation pressures remained persistent. Agriculture conditions saw slight improvement but generally remained strained; the livestock sector was strong while conditions were stressed among crop producers,” the Fed report said. At the district level, the Minneapolis Fed reported that agricultural contacts “were worried about drought. The Dallas Fed said agriculture conditions had “deteriorated due to drought conditions.” The Chicago Fed said farm-income expectations “improved some.”
U.S.-China tensions run high at G-20 meeting… A disagreement between Chinese and U.S. officials at a Group of 20 finance chiefs meeting in North Carolina this week revolved around a dispute over the phrase “non-market” in a sentence addressing trade imbalances. The U.S. side attributed the impasse to disagreements on language spanning issues from critical minerals to debt restructuring, while Chinese officials saw the term as a veiled attack on state-owned companies. The final chair statement from the U.S. included a line saying countries should agree to “eliminate non-market policies and practices that exacerbate imbalances,” which was opposed by China. ”The dispute highlights simmering tensions between the world’s biggest economies weeks before Chinese leader Xi Jinping heads to Washington, D.C., for a high-profile summit with U.S. President Donald Trump. U.S. Treasury Secretary Scott Bessent is a key figure in steering Washington’s relationship with Beijing, leading trade negotiations and poised to helm bilateral talks in the coming weeks on artificial intelligence,” said a Bloomberg report.
Record-breaking grain futures volumes in August… The sharp advances across grain futures markets in August were accompanied by a trading frenzy that helped drive average daily volumes for Chicago soft red winter wheat futures, Kansas City hard red winter wheat futures to records of 216,000 contracts and 109,000 contracts, respectively, CME Group said Wednesday. Corn futures saw a 36% jump in average daily volume relative to last year, to 602,000 contracts, while agricultural average daily volume overall was 2.2 million contracts. A volatile month for markets of all stripes saw the CME book its second-highest August average daily volume on record at 29.7 million contracts, up 6% from the same month last year. Treasury volume jumped 15% from last August, while daily metals trade surged 48%.
Malaysian palm oil futures rally… Malaysian palm oil futures strengthened Thursday, trading near MYR 4,990 per MT after recent losses, lifted by firmer edible oil prices on the Dalian market. Sentiment was also supported by rising El Niño risks, which could bring drier conditions to Southeast Asia. Palm oil output in top supplier Indonesia is expected to fall 2.9% to 56.8 million MT in 2027. Indonesia will also maintain its B50 biodiesel mandate next year, with implementation reportedly reaching 80% so far. In India, refiners imported a record volume of soyoil in August and the most palm oil in six months, ahead of the festive season, providing additional demand support. However, gains were capped by a stronger ringgit and weaker crude oil prices. Export prospects also remained weak, with cargo surveyors estimating Malaysian palm oil shipments fell between 6.5% and 14.9% in August from July. Meanwhile, ample supply remained a headwind, with Malaysian palm oil inventories rising to a five-month high in July.
Cattle futures markets pressured by weak cash trade… October live cattle on Wednesday fell $1.90 to $210.175 and closed at a nine-month low close. November feeder cattle lost $0.175 to $308.35, Live cattle saw solid technical selling pressure as prices remain firmly trapped in a downtrend on the daily bar chart. Very light cash cattle trading at lower money at mid-week also helped to pressure the futures markets. USDA at midday Wednesday reported very light negotiated cash cattle trading so far this week, at $217.88 for steers and at $218.00 for heifers. The agency said cash cattle trade last week averaged $219.25. However, live cattle futures continue to trade at significant discounts to the cash cattle market, which could limit the downside in futures. The Agua Prieta cattle crossing from Sonora into the United States is expected to reopen on September 8 after exports were temporarily suspended for repairs, the Sonora Regional Livestock Union said on Tuesday. World Weather Inc. said livestock stress “has been horrific in the southern Plains recently with persistent excessive heat and no rain. Grazing grass is quite limited and animal weight grains have been a struggle along with some livestock health issues.” The hot weather was briefly relieved late last week, but temperatures became oppressively hot again during the weekend. Limited rain and very warm to hot temperatures will prevail for another ten days, leaving animals stressed.
Lean hog futures see some profit taking, consolidation… October lean hog futures on Wednesday rose $0.125 to $83.775 and hit a four-week high early on. The lean hog futures market saw some mild profit-taking early on and then chart consolidation later in the session, after recent good gains that suggest the futures market has bottomed out. The cash hog market continues to trend down, overall. The latest CME lean hog index down 28 cents to $90.58. Today’s projected CME index price is up 27 cents at $90.85. The national direct five-day rolling average cash hog price quote for Wednesday was $89.67.