Good morning!
Grain prices firmer overnight… As of 6:00 a.m. CDT, December corn was up 2 3/4 cents, November soybeans up 3 cents and December winter wheat futures markets were around 3 cents higher. Corn bulls have shown resilience this week and are maintaining a three-week-old price uptrend on the daily chart for December futures. However, the soybean bulls have broken down this week as a fledgling price downtrend is now in place for November beans. Meal saw some short-covering gains overnight and that market likely holds the key for beans’ fortunes in the near term. Winter wheat futures saw some short covering overnight after hitting contract lows Thursday but there are no early chart clues that market bottoms are close at hand. The key outside markets today see the U.S. dollar index lower. Nymex crude oil prices are lower and trading around $63.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.155 percent.
It’s jobs-report Friday… Traders and investors are bracing for the August U.S. jobs report from the Labor Department this morning, arguably one of the most important U.S. data points of the month. Analysts expect the report to extend the weakest stretch of U.S. jobs growth since the pandemic, likely locking in a Federal Reserve interest-rate cut this month. The key nonfarm payrolls number is seen up 75,000 in August, which would mark a fourth straight month of jobs growth below 100,000. The unemployment rate is seen rising to 4.3%, which would be the highest level since 2021. A big miss in today’s non-farm payrolls number, especially to the upside, could roil the marketplace. Much-stronger-than-expected U.S. jobs growth in August would throw into question the trajectory of Federal Reserve monetary policy, including future rate cuts.
Weekly USDA export sales out this morning… This morning’s weekly USDA export sales report (delayed one day due to the Labor Day holiday Monday) is expected to show U.S. corn sales of 700,000 to 2.2 million MT in all marketing years, according to a Dow Jones Newswires survey. U.S. soybean sales are seen at 300,000 to 1.6 million MT in all marketing years. U.S. wheat sales are expected to be between 300,000 and 700,000 MT in all marketing years, according to the Dow Jones Newswires survey of analysts.
China slaps duties on EU pork imports… China has imposed preliminary duties on pork imports from the European Union, a move set to disrupt shipments from one of the world’s biggest suppliers and further stoke trade tensions between Brussels and Beijing, reports Bloomberg. Major pork exporters Danish Crown A/S and some units of Vion Food Group face duties of 31.3% and 32.7% respectively, according to the ruling. It will be paid as a deposit until the duties are finalized. The duties come as China struggles with a domestic oversupply of pork and sluggish consumption amid a sustained economic downturn. China will impose preliminary levies ranging from 15.6% to 62.4% on cargoes of the meat, China’s Ministry of Commerce said in a statement. China accused European companies of dumping certain pork and pig by-products and said its domestic industry has “suffered material injury.” The EU is one of the world’s top pork exporters, second only to the U.S.
U.S.-Canada to hold more trade talks… Canada and the U.S. agreed to hold technical talks on sectoral tariffs after officials met with Commerce Secretary Howard Lutnick. The talks are focused on reaching common understandings about options that may form a series of small deals to put Canada in a better position, said Canadian cabinet minister Dominic LeBlanc. Canada is facing U.S. tariffs on its steel, aluminum, auto and lumber exports. On Wednesday, Canadian Prime Minister Mark Carney told reporters he had a “very constructive” conversation with President Trump earlier in the week and believes they can reach agreements on some tariff-affected industries.
U.S.-Japan reach trade deal… President Trump has signed an executive order implementing a U.S. trade agreement with Japan, with a maximum 15% tariff on most of Japan’s products. The deal includes a promise that Japan will create a $550 billion U.S. investment fund, and the U.S. will lift certain tariffs on aircraft and aircraft parts as well as generic pharmaceuticals. Relief for aerospace and automobile imports will become effective within seven days, according to the order. The news lifted market sentiment in Asia overnight.
OPEC-plus meeting in focus… Crude oil futures prices have fallen late this week ahead of an OPEC-plus meeting that begins Sept. 7. Energy analysts think the oil cartel may sign off on another crude oil supply hike. The alliance will hold a virtual meeting Sunday to decide its next move after completing the restart of 2.5 million barrels a day of idled crude oil supply at its previous gathering. “If the eight OPEC-plus countries were to agree on another production increase, we believe this would place significant downward pressure on oil prices,” Commerzbank analysts Barbara Lambrecht and Carsten Fritsch wrote in a note and as reported by Bloomberg. “After all, there is already a significant risk of a supply surplus.”
Global food prices remain elevated… The United Nations’ Food and Agriculture Organization (FAO) Food Price Index was at 130.1 in August, the highest since February 2023 and little changed from 130 in July. Vegetable oil prices went up 1.4% to the highest level since June 2022, driven by quotations for palm, sunflower and rapeseed oils, which more than offset a slight decline in soyoil values. Meat costs increased 0.6% to reach a new record high, driven by continuing higher bovine and ovine meat prices, which outweighed stable pig meat prices and lower poultry meat prices. Also, sugar prices edged up 0.2%, mostly driven by concerns over Brazil’s production outlook, amid reduced sugarcane yields and low sugar recovery rates in key southern growing regions. Conversely, dairy prices fell 1.3%, reflecting lower international prices for butter, cheese, and whole milk powder. Cereals cost fell 0.8% to the lowest since September 2020. Wheat prices declined amid ample global supplies and subdued import demand, especially from major buyers in Asia and North Africa.
More profit taking in cattle futures… The live and feeder cattle futures markets on Thursday saw more profit-taking pressure from the speculators, as well as some weak-long liquidation. The cattle market bulls need to step up and show some strength today, in order to avoid technically bearish weekly low closes that would be one chart clue that market tops are in place. Cash cattle trade had turned a bit more active as of midday Thursday, with USDA reporting steers averaging $242.48 and heifers averaging $242.42. Cash trade last week averaged $243.60.
Lean hog futures see more technical buying… The lean hog futures market Thursday saw more technical buying interest after prices Tuesday hit a nine-week high. The latest CME cash index price (Sept. 2) is unchanged at $105.92. Today’s projected index price is up 5 cents to $105.97. Thursday’s national direct 5-day rolling average cash hog price quote was $105.78.
Today’s USDA reports—Friday
--Weekly Export Sales 7:30 am CDT (Delayed one day due to Monday holiday)
--Livestock and Meat International Trade Data 10:00 am CDT
--Dairy Products 2:00 p.m. CDT
--Peanut Prices 2:00 p.m. CDT