Good morning!
Grain futures prices mostly firmer overnight… As of 6:00 a.m. CDT, December corn was up 2 1/2 cents and hit a three-week high, November soybeans up 3 1/2 cents, and December HRW and SRW wheat futures markets were 2 1/2 cents higher. All are poised to produce technically bullish weekly high price closes today, if their overnight gains are held. That may be a tough chore, however, as risk aversion in the general marketplace is keener to end the trading week due to wobbly global stock markets. That may keep the grain market bulls tentative during the day session. The key outside markets today see the U.S. dollar index weaker again. Nymex crude oil prices are modestly down and trading around $57.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.94 percent.
Showers and storms increasing in coverage across parts of the Midwest… The National Weather Service today reported a developing low-pressure system currently over the Dakotas will become the next main weather maker from the Mid-South to the Great Lakes today and over the weekend. Showers and thunderstorms increase in coverage from Arkansas to eastern Michigan along and ahead of a strong cold front, with the heaviest rainfall expected from central Illinois to northern Indiana, where 1-3 inches could fall and which may lead to some instances of flooding. A marginal risk for severe weather extends farther north across the Ohio Valley. Elsewhere across the nation, it will be a crisp and cool end to the work week for much of the eastern U.S., with a pristine airmass in place. Frost and freeze advisories/warnings are in effect for interior portions of the Mid-Atlantic and northeast states. Across Montana, high winds will be possible starting Saturday night across northern portions of the state as a strong Pacific storm system approaches from the west, and rain and mountain snow reaches Washington state by Saturday afternoon and beyond.
Bank, credit concerns rattle global stock, financial markets… The marketplace is extra anxious to end the trading week, on worries about bad bank loans at two regional U.S. banks, which have also raised concern about credit quality in the U.S. economy and further underscored the fragility of the $28 trillion bull market run in equities. U.S. bank stocks extended their slide in overnight trading, after a sharp selloff in regional lenders Thursday that reverberated through Asian and European trading hours. Investors are worried they haven’t identified where the risks lie, but some analysts believe the selloff will be short-lived and that regional banks remain well reserved for potential losses. However, Zions Bancorp and Western Alliance Bancorp have disclosed loan fraud losses, with Zions’ subsidiary California Bank & Trust providing $60 million to the borrowers. The alleged culprits were investment funds tied to Andrew Stupin and Gerald Marcil, who “vehemently deny” the allegations through their attorney, according to a Bloomberg report. The disclosures led to a significant reaction from stock investors, with 74 of the biggest U.S. banks shedding more than $100 billion in market value this week. The disclosures add to other recent loan blowups, including subprime auto lender Tricolor Holdings, which filed for bankruptcy last month. That was followed by the collapse of auto-parts supplier First Brands Group, which owed more than $10 billion to some of the biggest names on Wall Street. Jamie Dimon, JPMorgan’s chief executive officer, said Tuesday, before the latest round of disclosures, that investors should be “forewarned” that more credit problems were likely to emerge. “When you see one cockroach, there are probably more,” Dimon said after his bank released third-quarter earnings and outlined its $170 million hit from Tricolor. “Everyone should be forewarned on this one.” Gold prices overnight hit another record high on safe-haven demand amid the spooked marketplace.
U.S. dollar having worst week in two months… The U.S. dollar index fell for a fourth day today, putting it on track for its biggest weekly drop in more than two months, amid dovish signals from Federal Reserve officials and the fresh worries over U.S. regional banks. U.S. Treasury two-year yields fell to a three-year low overnight. The benchmark 10-year U.S. Treasury note yield dipped below 4.0% today. Traders have boosted bets on Federal Reserve easing, and are now pricing 53 basis points of cuts by year-end versus 46 on Wednesday, according to a Bloomberg report. Fed Governor Christopher Waller said Thursday that Fed officials can keep lowering U.S. interest rates in quarter-percentage-point increments to support a faltering U.S. labor market. Fed Governor Stephen Miran, meanwhile, reiterated his view that a move twice that size would be appropriate later this month when the FOMC meets.
IMF says China-U.S. trade row poses significant global economic growth risks… The International Monetary Fund sees “significant downside risks” to global growth due to renewed trade frictions between the U.S. and China, the Fund’s Director of the Asia and Pacific Department, Krishna Srinivasan, said on Friday. After months of tentative stability in U.S.-China relations, tensions flared in recent weeks when Washington expanded tech restrictions and proposed tariffs on Chinese ships entering U.S. ports. China responded with similar actions, outlining tighter export controls on rare earths and other critical materials. “If these risks materialize in greater tariffs and disruption in supply chains, then growth could be lower by 0.3 points,” Srinivasan told Bloomberg TV’s Haslinda Amin on Friday. “If there are further tensions that would also mean downside risks for China.”
Trump says high beef prices are coming down… President Trump on Thursday said his administration had struck an agreement to bring down the price of beef for U.S. consumers. During an event in the Oval Office, Trump didn’t provide details on what the federal effort entailed but conceded that beef was one area where his efforts to fight inflation hadn’t paid enough dividends. “We are working on beef, and I think we have a deal on beef that’s going to bring the price” down, Trump said and as reported by Bloomberg. “That would be the one product that we would say is a little bit higher than we want it, maybe higher than we want it, and that’s going to be coming down pretty soon, too. We did something; we worked our magic.” Trump’s comments came days after he hosted Argentina President Javier Milei at the White House to discuss trade and financing to help bolster that country’s economy. The U.S. is a major importer of Argentine beef, though shipments are subject to an annual quota before expanded tariffs kick in.
Biodiesel group says EPA exemptions on RFS may cost U.S. soybean farmers billions… Clean Fuels Alliance America has sent a letter to the Environmental Protection Agency (EPA) and a copy to USDA Secretary Booke Rollins, saying EPA’s pending Supplemental Notice on Renewable Fuel Standards (RFS) for 2026 and 2027 may have a major negative impact on the U.S. agricultural economy. “U.S. soybean farmers and processors could lose between $3.2 billion and $7.5 billion in crop value over the next two years if EPA does not completely reallocate recently exempted RFS volumes.” Clean Fuels Alliance America is the largest U.S. trade association for the biomass-based diesel industry. The EPA is co-proposing additional RFS volumes in 2026 and 2027 reallocating completely (100%) or partially (50%) retroactively exempted small refinery exemptions (SREs) for 2023 and 2024, as well as those projected to be granted for 2025. “Biomass-based diesel is essential to America’s farm security, now more than ever. Domestic biodiesel, renewable diesel and sustainable aviation fuel (SAF) production supports 10% of the value of every bushel of soybeans grown in the United States,” said the letter.
Malaysian palm oil futures prices slip… Malaysian palm oil futures slipped below MYR 4,520 per MT Friday, snapping a two-day rise as a stronger ringgit and weakness in Dalian and Chicago rival oils weighed on sentiment. Trading was quiet ahead of Monday’s holiday. For the week, the benchmark is poised to end lower, down 0.7% so far, reversing gains from the past two weeks amid renewed U.S.–China trade tensions. Washington is reportedly mulling new curbs on trade ties, including cooking oil, sparking fears of softer Chinese demand for palm oil. Losses were offset by signs of resilient exports, with cargo surveyors reporting Malaysia’s palm oil exports for Oct. 1–15 rose between 12.3% and 16.2% from September. India, a top buyer, also raised base import prices for all vegetable oils in its latest bi-weekly review. Meanwhile, Indonesia, the world’s largest producer, may require international flights from Jakarta and Bali to use a 1% aviation fuel blend starting in 2026, potentially boosting domestic palm oil usage.
Cattle futures markets are short-term overbought… December live cattle futures have closed higher for 10 sessions in a row. Prior to Wednesday, November feeders had closed higher for eight sessions in a row. That puts both markets into technically overbought territory and due for stronger corrective price pullbacks soon. The feeder cattle futures market is seeing some profit taking from the shorter-term futures traders that is now curbing gains. Still, amid the firmly bullish cash cattle, feeder cattle and beef market fundamentals, most of the speculative bearish futures traders do not want to step in front of a steaming locomotive. USDA this week has reported very light cash cattle trade at $236.00. Cash cattle trade last week averaged $234.07, up $3.31 from the prior week average.
Chart-based specs selling lean hog futures… The lean hog futures market on Thursday saw more technical selling pressure from the shorter-term speculative traders today amid firmly bearish near-term technical posture and eroding cash hog prices. The latest CME lean hog index is down another 79 cents at $97.20. Today’s projected cash hog index is down another 61 cents at $96.59. Thursday’s national direct 5-day rolling average cash hog price quote was $95.31.