Good morning!
Grain prices down a bit overnight… As of 6:00 a.m. CDT, December corn was down 1 cent, November soybeans down 4 1/2 cents and December winter wheat futures markets were 1/4 to 1/2 cent lower. The grain futures markets saw modest downside price corrections overnight, after scoring decent gains Tuesday. Corn market bulls are keeping alive a price uptrend on the daily chart for December futures, which means the path of least resistance for prices remains sideways to higher. November soybeans are in a trading range but the bulls have a bit of momentum on their side. However, bean bulls need the meal market bulls to step up and produce price strength. Winter wheat market bulls are showing signs of life at mid-week. December SRW prices hit a five-week high overnight, while December HRW notched a three-week high. More gains in wheat prices this week would suggest near-term market bottoms are in place. The key outside markets today see the U.S. dollar index firmer. Nymex crude oil prices are weaker and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.02 percent.
Unsettled Midwest weather the next couple days… The National Weather Service today reported a slow-moving system will bring a couple of days of unsettled weather across the northern and central Plains in the form of locally heavy rain and strong to severe thunderstorms. The severe storm and heavy rain potentials are expected to be greatest early today across the north-central Plains and will shift toward the south-central High Plains later today. As a low pressure system gradually consolidates over the northern and central Plains, a swath of 1-2 inches of rain can be expected across western South Dakota through tonight on the back side of the system. From Thursday into early Friday the heavy rain and severe storm potentials will be lowered. Nevertheless, a good chance of showers and thunderstorms are expected across the northern Plains and extend as far south as Oklahoma. Temperatures across much of continental U.S. the next few days will be above normal, with the upper and middle Mississippi Valley seeing 10 to 15 degrees above normal. Heat is expected to increase across the Midwest with the passage of a warm front, where high temperatures well into the 90s are in the forecast.
Trump-Xi summit progress bodes well for Boeing, U.S. farmers… That’s the headline of an exclusive South China Morning Post report today. The story says President Trump “will likely only agree to a China visit if he can announce multibillion-dollar orders, probably for Boeing aircraft and U.S. soybeans.” The report said negotiations between the U.S. and China over a possible state visit by President Trump to China are in their final stage, with large-scale purchases of U.S. products — particularly soybeans — emerging as key element, according to the Post. “There are a few small loose ends. But the major blocks are already resolved. Things are taking shape,” one source told the Post, describing the talks as at a “very advanced stage.”
China orders its major companies to stop buying Nvidia computer chips… China’s internet watchdog has instructed companies including Alibaba and ByteDance to terminate orders for Nvidia Corp.’s RTX Pro 6000D computer chip, the Financial Times reported. The Cyberspace Administration of China told companies this week to stop testing the chip and cancel existing orders, according to the FT. Before that edict, several Chinese companies had indicated they would order tens of thousands of the chips, which Nvidia introduced to get around restrictions on the shipment of advanced AI chips to China, the FT said. This news comes as the U.S. and China both said they had made progress in trade talks held in Madrid, Spain earlier this week.
U.S., Canada, Mexico begin trade consultations… The U.S., Canada and Mexico are set to formally begin consultations ahead of the review of their regional USMCA trade accord next year, the U.S. and Mexico announced Tuesday. The consultation process will begin today. Mexican Economy Minister Marcelo Ebrard said an evaluation of the trade pact’s results over the past five years will take place between now and the end of the year to prepare for negotiations over a possible extension of the agreement in 2026. The Office of the U.S. Trade Representative, which estimates that the USMCA covers nearly $2 trillion in US goods and services within the region, made a similar announcement in an official notice seeking public comment on the matter. Canadian Prime Minister Mark Carney last month said his government would also hold industry consultations on the trade agreement this fall, though Canada’s process has not yet formally begun.
FOMC interest rate decision this afternoon… The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends this afternoon with a statement and press conference from Fed Chairman Powell. The FOMC is widely expected to do a 25-basis point cut for the Fed funds rate trading range, which would be the first since November of last year. This afternoon will also see updated Fed projections that may show slower U.S. economic growth and rising unemployment. Reporters will grill Powell at his press conference this afternoon, not only on the trajectory of the U.S. economy and interest rates but also on the Fed’s independence.
Malaysian palm oil futures prices rise… Malaysian palm oil futures rose nearly 1% to above MYR 4,450 per MT today, reversing a modest decline in the previous session as trading resumed after holidays on Monday and Tuesday. Gains were supported by firmer edible oils in Dalian and Chicago markets. Also, signs of higher exports grew, with cargo surveyor data showing Malaysian palm oil exports for September 1–15 rose 2.6% from the same period in August to 742,648 MT. In top buyer India, imports surged 15.8% in August from July to 990,528 MT, the highest in over a year, as competitive pricing versus soyoil encouraged refiners to boost purchases ahead of the mid-October festive season, according to the Solvent Extractors’ Association of India.
Cattle futures bulls fade… The cattle market saw selling pressure Tuesday as bulls could not show important follow-through price strength after good gains posted Monday. That’s a worrisome signal for the bulls. Weakening cash cattle and boxed beef market fundamentals are squelching buying interest in the cattle futures markets. It may take a bullish USDA monthly cattle-on-feed report this Friday afternoon to remind cattle traders of the still-tight feedlot cattle supplies to spark the bulls. No cash cattle trading has been reported by USDA yet this week. Last week’s cash cattle trade averaged $239.33, down $3.22 from the previous week.
Mild profit taking in lean hog futures Tuesday… A bit of profit taking from the speculators was featured in the lean hog futures market Tuesday. Gains in hogs were also limited by the sell off in the cattle futures markets Tuesday. However, selling interest in hog futures was tempered by a solid price uptrend that remains in place on the daily chart for October lean hogs. The latest CME lean hog index is steady at $106.14. Today’s projected cash hog index is down 14 cents at $106.00. Tuesday’s national direct 5-day rolling average cash hog price quote was $106.49.
USDA reports today—Wednesday
-- Broiler hatchery