Good morning!
Grain prices weaker overnight… As of 6:00 a.m. CDT, December corn was down 1 cent, November soybeans were down 5 1/4 cents and hit another six-week low overnight. December winter wheat futures markets were 1 to 1 3/4 cents lower, with SRW notching a fresh contract low. Grain traders are digesting the bearish news out of Argentina, whereby the Argentine government has temporarily lifted duties on its grain exports. Corn bulls are losing momentum and need to show price strength very soon to keep alive a price uptrend on the daily chart for December corn. Soybean bears have now wrested near-term technical control from the bulls, amid slumping meal prices. Winter wheat futures prices continue to struggle near their contract lows. The key outside markets today see the U.S. dollar index near steady. Nymex crude oil prices are firmer and trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.13 percent.
Storms continue to rumble across the Midwest and Plains… The National Weather Service today reports an active and unsettled pattern over the central U.S. will not only continue but become more organized over the next couple of days, leading to additional risks of both flash flooding and severe weather. Upper-level energy and surface low pressure/frontal systems will consolidate in the Plains and move slowly east, drawing in ample Gulf moisture to fuel widespread, heavy-rain producing thunderstorms. Today, storms are forecast from the Great Lakes southwest through the Middle Mississippi Valley and into the central/southern Plains. The greatest concentration of storms is expected to focus along frontal waves from the Lower Ohio Valley southwest through the Mid-South, Ozarks, and ArkLaTex, where a slight risk of excessive rainfall could cause scattered flash flooding. Additional isolated instances of flash flooding can be expected more broadly across the area. On Wednesday, the frontal system will continue eastward, focusing storm chances from the lower Great Lakes southwest through the Ohio, Tennessee, and middle/lower Mississippi valleys to the western Gulf Coast/Texas. Much of the country will see above-average temperatures through mid-week.
Pro Farmer crop consultant trims U.S. corn, soybean yield forecasts… Pro Farmer crop consultant Dr. Michael Cordonnier has lowered his 2025 U.S. corn yield forecast by 2.0 bushels this week, to 182.0 bu/ac with a neutral-to-lower bias. The weekly USDA crop progress report showed the condition of the U.S. corn crop declined 1% this week to 66% rated good/excellent. This is the fourth week in a row that the condition has declined. “Early corn yields are generally disappointing, which could be an indication that southern rust has caused more problems than originally anticipated.” Cordonnier lowered his 2025 U.S. soybean yield by 0.5 bushel this week, to 52.0 bu/ac with a neutral-to-lower bias. USDA Monday afternoon reported the condition of the 2025 U.S. soybean crop declined 2% this week, to 61% rated good/excellent. “For the soybean crop, the dryer conditions in the eastern and southern locations are a concern, especially now with warmer temperatures. These conditions should force the soybeans to mature quickly,” said Cordonnier.
U.S. pledges support for troubled Argentine government, financial system… The U.S. has pledged financial support for Argentine President Javier Milei ahead of midterm elections next month. U.S. Treasury Secretary Scott Bessent has vowed to provide “all options for stabilization,” and the U.S. is ready for a large, forceful intervention in Argentina. The news offered a much needed respite to Argentina’s battered assets, with bonds jumping, stocks leaping 8%, and the currency set for the biggest advance since May on Monday, according to Bloomberg. Bearish news for the grains and soy complex futures markets came Monday as Argentina said it will remove export duties on all grains for over a month to boost the supply of dollars during that period, according to a government source. It will expire on Oct. 31, or once Argentine farmers have sold $7 billion worth of exports, reports said. The country’s markets had been in free-fall ever since Milei’s party landslide loss in the Buenos Aires’ provincial election earlier this month, which raised the prospect of his free-market reform agenda stalling after the midterms. The central bank spent $1 billion in just two days last week to keep the peso from plunging as it fell almost every single session this month.
U.S. government shutdown looms… With just days until the Oct. 1 deadline, the U.S. Congress faces another standoff over government funding. The Republican-led House of Representatives passed a stopgap bill that would extend funding through Nov. 21, but to pass in the Senate, the bill needs the support of at least some Democrats. Democratic leaders are insisting on the inclusion of health care provisions that are absent from the Republican-led bill. They also want new restrictions on President Trump’s ability to refuse to spend money appropriated by Congress. Trump has signaled he is unwilling to grant Democrats concessions, raising the risk that the standoff could tip into a shutdown that could be difficult to resolve.
President Trump addresses United Nations General Assembly today… This will be President Trump’s first speech to the body since 2020. Trump has been skeptical of multilateral institutions such as the UN. He has criticized what he views as unequal burdens placed on the U.S. and has questioned the effectiveness of international bodies. In previous addresses to the U.N. Trump has defended his “America First” stance and U.S. departures from treaties such as the Paris Climate Agreement and focused heavily on transactional diplomacy.
USDA soon to release a “significant plan” to help rebuild the U.S. cattle supply… USDA said in a press release Sunday that is will soon be “incentivizing our great ranchers and driving a full-scale revitalization of the American beef industry. This is only the beginning, with many more announcements coming this week as USDA restores American strength, protects food security, and supports America’s ranchers and farmers.” USDA’s strategy includes the following immediate actions: Investing $100 million in breakthrough technologies through the NWS Grand Challenge, which will solicit ideas to enhance sterile fly production and develop new tools such as advanced traps, lures, and therapeutics. USDA is also exploring and validating technologies like e-beam and x-ray sterilization, genetically engineered flies, and modular sterilization facilities through public listening sessions and ongoing evaluations. USDA has begun construction on a domestic sterile fly dispersal facility at Moore Air Force Base in Edinburg, Texas. This $8.5 million facility, expected to be substantially complete by the end of 2025, will be capable of dispersing up to 100 million sterile flies per week. Planning is also underway with the U.S. Army Corps of Engineers for construction of a domestic sterile fly production facility in Southern Texas, with a projected capacity of 300 million sterile flies per week. Following detections in Oaxaca and Veracruz, USDA closed southern ports of entry to livestock trade after a case was reported 370 miles from the U.S. border. USDA is conducting monthly audits of Mexico’s NWS response and is helping Mexico develop a more risk-based trapping plan, especially in Veracruz and along the border.
Malaysian palm oil futures slump on Argentina duty-free grain export news… Palm oil headed for its biggest one-day drop since March as prices of rival soybean oil slipped after Argentina temporarily scrapped export duties on all of its crop exports. Soy oil, palm’s closest substitute for food and fuel, fell for a fifth day in Chicago Monday as the measure by Argentina, a major soybean grower, put pressure on U.S. soybean prices already weighed down by poor demand from China.
“Never-say-die” cattle market bulls… October live cattle on Monday rose $3.575 to $237.15 and hit a three-week high. November feeder cattle rose $8.975 to $359.90 and hit a three-week high. November feeders traded limit up for a time Monday. Live and feeder cattle futures trading limits will be expanded today due to the limit-up close in January feeders Monday. Cattle traders were reminded in last Friday’s USDA Cattle-on-Feed Report that tight cattle supplies persist. Feeder cattle futures were lifted sharply Monday as USDA over the weekend confirmed a new case of New World screwworm (NWS) in northern Mexico-- just 70 miles from the U.S.-Mexico border and is now the northernmost detection of NWS during the outbreak. Last week’s cash cattle trading average price was $237.51, USDA reported at midday. The prior week’s cash cattle trade averaged $239.33.
Lean hog futures bulls keep their foot on the gas… October lean hogs Monday rose 82 1/2 cents to $98.80 and hit a contract high. The lean hog futures market was boosted Monday by strong gains in the cattle futures and a rebound in fresh pork prices. Technical buying was featured as lean hogs remain in a solid price uptrend on the daily bar chart, with no strong chart clues of a market top being close at hand. The latest CME lean hog index is down 36 cents at $105.34. Tuesday’s projected cash hog index is down another 36 cents at $104.98. Monday’s national direct 5-day rolling average cash hog price quote is $105.80.