Good morning!
Grain prices lower overnight… As of 6:00 a.m. CDT, December corn was down 2 1/4 cents, November soybeans down 9 3/4 cents and December winter wheat futures markets were 7 to 8 cents lower. The first trading day of the month of September finds risk aversion in the general marketplace. That’s keeping the speculative grain market bulls on the sidelines following a three-day holiday weekend. The key outside markets today see the U.S. dollar index solidly up. Nymex crude oil prices are higher and trading around $66.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.27 percent.
Frost potential this week in Midwest, Canada Prairies… World Weather Inc. Monday reported two shots of cold air will push through the Midwest and eastern Canada’s Prairies this week. Wednesday will be the first round of cooler-than-usual weather in the eastern Prairies, while Friday and Saturday will be cold again over some of the same areas. Portions of the upper U.S. Midwest will see some frost and a few freezes Thursday morning, with another opportunity for frost in the upper Midwest and Great Lakes region Sunday and Monday of next week. The first shot of cold weather is due Wednesday morning, at which time frost will impact central and northeastern Saskatchewan and a few locations in far northwestern Manitoba. A reinforcing shot of cold air is expected late this week into much of the same region in Canada with some of the coldest weather expected Friday and Saturday. The coldest temperatures in the upper U.S. Midwest will slip to the 30s, with a few readings of 29-32 on Thursday morning. The coldest air will be in northern Wisconsin, upper Michigan and Minnesota, where light freezes and frost are possible. Soft frost may impact a part of the eastern Dakotas, northern Iowa, northwestern Illinois and western and northern parts of lower Michigan. “Some crop damage is expected, although this summer’s dry biased weather in eastern Canada had many crops advanced a little further than usual. Corn, soybeans, flax and late-planted canola will run a risk of damage. Potential damage in the upper U.S. Midwest will mostly be to leaf mass, but if frost is widespread and significant enough it could change crop quality and for many soybeans that remain immature it could impact both yield and quality,” said the forecaster.
U.S. federal appeals court ruling says most U.S. tariffs are illegal, throwing uncertainty into marketplace… Last Friday’s U.S. appeals court ruling that said most U.S. tariffs are illegal has injected uncertainty into the marketplace to start the U.S. holiday-shortened trading week, and into President Trump’s authority to impose the import duties. The judges ruled 7-4 that sweeping U.S. global tariffs exceeded the authority granted under the 1977 International Emergency Economic Powers Act (IEEPA). The Federal Circuit said Congress never delegated the power to impose tariffs through IEEPA, calling the policy an “unheralded” and “transformative” overreach. The appeals judges let the levies stay in place while the case proceeds, but it threatens to freeze corporate investment decisions until the cost of tariffs are clearer. U.S. stock indexes were lower overnight, along with most global stock markets, while bond yields are on the rise early this week. September is historically the worst-performing month for the U.S. stock market.
First France, now U.K. as EU markets wobble… The yield on long-dated United Kingdom government bonds rose to the highest level since 1998 and the British pound dropped early this week, pressuring U.K. Prime Minister Keir Starmer’s government to regain the confidence of investors who remain concerned over the fiscal outlook. The rate on U.K. 30-year gilts rose five basis points to 5.69% today amid a global decline in government bonds. The British pound tumbled, falling as much as 1.3% to $1.3376 against the U.S. dollar and lagging all other major currencies. The FTSE 100 stock Index retreated by 0.5%. Rising debt costs threaten to worsen a bleak fiscal backdrop facing Chancellor of the Exchequer Rachel Reeves ahead of her autumn budget. “The situation in the U.K. is quite dangerous at the moment because of the return of the bond vigilantes,” said Ludovic Subran, Allianz chief investment officer, as reported by Bloomberg. “What is striking is that it took so long to factor in the return of inflation into gilts. Forward guidance on the fiscal side will be needed.”
China, Russia sign natural gas pipeline deal…Russia’s Gazprom has signed an agreement to build a natural gas pipeline to China via Mongolia. The Russian gas producer could ship as much as 50 billion cubic meters a year via the pipeline for 30 years, at a price lower than what Gazprom currently charges customers in Europe, said a Bloomberg report. Gazprom has also agreed to raise flows to China via the existing Power of Siberia route and the future Far Eastern link, with details on construction timeline, price negotiations, and financial terms yet to be disclosed.
U.S.-India keeping door open on trade talks… President Trump said India offered to cut tariffs on U.S. goods to zero, adding that “it’s getting late” and India should have made the offer “years ago.” Meantime, India’s Commerce Minister Piyush Goyal said both sides continue to engage to reach a trade agreement saying, “We are in dialog with the U.S. for a bilateral trade agreement.” There are no formal talks taking place between the trade negotiators at present but the two nations are keeping informal communication channels open, reported Bloomberg.
Gold hits record high, silver at 14-year high… Gold prices overnight hit a record high and silver prices a 14-year high, on safe-haven demand as the prospect of Federal Reserve rate cuts and growing concerns over the U.S. central bank’s independence propelled the two precious metals. Gold has risen more than 30% this year, making it one of the best-performing major commodities. Spot gold traded as high of $3,508.00 an ounce today. Nearby silver futures hit a high of $41.34 an ounce. Silver is up by more than 40% so far this year.
Malaysian palm oil futures rise… Malaysian palm oil futures rose by over 1% Tuesday to above MYR 4,400 per MT, snapping two sessions of losses as trading resumed after a long holiday weekend. The rebound was supported by a weaker ringgit and stronger rival oils in the Dalian and Chicago exchanges, while an extended rally in crude oil prices also lifted sentiment amid escalating Russia-Ukraine tensions. Indonesia, the world’s largest producer, reported crude and refined palm oil exports up about 11% year-on-year in the first seven months of 2025 to 13.64 million tons, underscoring resilient global demand.
Cattle bulls remain strong… October live cattle futures last Friday rose $2.725, a new contract high close and for the week up $1.775. The cattle futures markets last Friday bounced back from profit-taking pressure seen last Thursday. Trading today will be extra important. Keener risk aversion in the marketplace to start the Month of September may squelch the cattle market bulls. If the stock market continues under pressure this week, the cattle futures markets will be hard-pressed to muster fresh price strength at such already elevated price levels. Cash cattle trading became active late last week, with USDA at midday Friday reported steers fetching an average price of $243.44 and heifers averaging $243.55.
Hog bulls also in high gear… October lean hog futures prices last Friday hit a two-month high and for the week rose $3.825. Friday’s technically bullish weekly and monthly high closes in October hogs set the table for follow-through, chart-based buying in the hog futures early this week. Cash hog prices continue to decline but pork cutout late last week showed good gains. The latest CME lean hog index is down another 20 cents to $106.43 as of Aug. 27. Surging cattle markets to record highs have been bullish for hogs markets, too as traders look for a value buy and consumers may be doing more substitution-demand buying of pork. However, a fading cash hog index is worrisome to hog traders and producers, especially as outdoor grilling demand subsides as Labor Day marks the unofficial end to summer.
Today’s USDA reports—Tuesday
--Export Inspections 10 a.m. CDT
--Cotton System 1 p.m. CDT
--Fats & Oils 1 p.m. CDT
--Grain Crushings 1 p.m. CDT
--Grain Crushings 1 p.m. CDT
--Crop Progress 3 p.m. CDT