Good morning!
Grain futures lower overnight… At 6:00 a.m. CDT, December corn was down 7 1/2 cents after hitting another contract and three-year high overnight. November soybeans were 13 1/4 cents lower after hitting another contract and 2.5-year high overnight. December soybean meal was down $4.70 after hitting a two-year high overnight. December bean oil was 21 points lower. December SRW and HRW wheat were 10 to 14 cents lower after December SRW poked to another contract and three-year high overnight. The grain futures markets are seeing what is so far just routine profit-taking pressure at mid-week. The Relative Strength Index (RSI) indicator on Tuesday was flashing well overbought markets that were due for corrective pullbacks in their price uptrends. The key outside markets today see the U.S. dollar index modestly up. October Nymex WTI crude oil prices are near steady and trading around $90.25 a barrel, hitting a six-week high overnight. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.8%.
U.S., Iran military strikes intensifying… Fighting between the U.S. and Iran over control of the Strait of Hormuz has escalated, with Tehran accusing American forces of bombing a residential area in a wave of overnight strikes. “The U.S. military carried out its second round of attacks in three days, which U.S. Central Command said targeted radar systems and mine-laying capabilities along Iran’s southern coast. This prompted the Islamic Republic to retaliate with drone and missile volleys on U.S. bases across the Middle East, in line with tactics used throughout the six-month war,” said a Bloomberg report. President Trump downplayed the chances of a peace deal, saying in a post on Truth Social that he’s “not trying to force Iran to the bargaining table. I couldn’t care less if they sign a worthless, to them, agreement,” he said. “I like our position now much better.”
Scattered thunderstorms over much of U.S.; heat expands in southern half… The National Weather Service today said showers and severe thunderstorms will develop over the northern Rockies/northern High Plains. The upper Midwest into the Great Lakes will see showers and thunderstorms will develop along a boundary over the Northeast westward into the Northern Plains. Showers and severe thunderstorms will develop in the upper Mississippi Valley on Thursday. Additionally, showers and severe thunderstorms will develop over parts of the Ohio Valley, central Appalachians, and mid-Atlantic on Thursday. Heat will build over parts of the middle Mississippi Valley, the Ohio/Tennessee Valleys, and the mid-Atlantic today into Friday. In response, heat advisories have been posted over the aforementioned regions. Meantime, monsoonal moisture will start to increase today over parts of the Southwest, producing showers and thunderstorms.By Thursday, the showers and thunderstorms will increase in areal coverage and intensity, producing heavy rain.
Russia suspends export duties on grains… “Russia suspended the floating export duty on wheat, barley and corn through the end of 2026 as Ukrainian attacks disrupted shipments through the Black and Azov seas, affecting routes for more than 70% of exports,” said a Bloomberg report overnight. The decision was made “given the need to restructure logistics,” the Economy Ministry said in an emailed statement on Wednesday. Russia will keep export duties on grain, including wheat, barley, and corn at zero until Dec. 31, while sunflower oil export duty will be frozen at August levels. “Russia and Ukraine, which together account for more than a quarter of global wheat exports, have stepped up attacks on commercial ships and ports in the Black Sea in the past month. Ukraine has also targeted Russian ports on the Sea of Azov. The strikes have sent wheat futures to the highest level in three years and threatened global food supplies” said the report. “For Russia, the attacks have practically idled the main export route for grain, just as farmers are harvesting this season’s crop. Russia exported less than half as much wheat in August as it did in the same month last year. Research firm SovEcon forecast that September exports would fall to the lowest level for that month since 2010.” Russia can use its Baltic ports for exports, but their limited capacity cannot accommodate the roughly 60 million metric tons of grain the country is capable of exporting in a season.
U.S. diesel prices on the rise again… U.S. diesel prices advanced to the highest since hitting a peak in April during the initial phase of the U.S.-Iran war, “highlighting the inflationary pressures menacing the global economy as the conflict drags on,” said a Bloomberg report. “The nationwide average retail price reached $5.688 a gallon on Tuesday, according to the American Automobile Association. That’s just a fraction below the April high, which was the costliest since mid-2022. Diesel is the lifeblood of the global economy, powering trucks, agriculture and construction, and spikes at the retail level affect industries as well as consumers. The fuel has been boosted this year by the conflict in the Middle East, as well as the Russia-Ukraine war. Moscow — typically a major supplier — has curbed exports following waves of attacks on its refineries,” said the report. Earlier this week, President Trump pressed U.S. oil refiners to boost domestic production of diesel and gasoline during a closed-door meeting, the report said.
USDA seeks better crop-forecasting methods… USDA on Tuesday said it is launching a pilot project aimed at improving its U.S. crop acreage and yield estimates, a move that will rely more on technology. The announcement by USDA Secretary Brooke Rollins discussed the modernization plan at the Farm Progress Show in Boone, Iowa, after a month-long series of listening sessions. “We will conduct a pilot to evaluate the use of improved satellite imagery, working with NASA and other federal government agencies across the country to figure out how we can make this reporting more accurate,” Rollins said during the farm conference, Reuters reported. Under the plan, the project will use geospatial tools and crop models alongside farmer polls to estimate crop acreage and yields, the report said. The department also said it would explore the use of artificial intelligence and machine learning.
Farmer sentiment on the upswing… Farmer sentiment in the U.S. improved for a second month in a row in August, according to the Purdue University-CME Group Ag Economy Barometer released Tuesday, rising from 126 points in July to 135 points. Both sub-indexes also rose, with the Index of Current Conditions up 1 point, while the Index of Future Expectations gained 11 points. Notably, for the first time since June 2025, a higher proportion of respondents expect their operation to be better off financially (28%) than worse off (24%) a year from now, noted Purdue ag economists Michael Langemeier and Joana Colussi. The survey also found more optimism over export prospects, while high input costs remained the top concern of 45% of respondents. The survey of 402 farmers across the U.S. ran from Aug. 10 to 14. Asked to rate U.S. farmland as an investment, 65% of respondents indicated that farmland was a good investment, 17% indicated that farmland was a medium investment, and 18% indicated that farmland was a poor investment.
Global bond market unrest continues… A fresh sell off in U.S. Treasuries has pushed the yield gap between U.S. and Chinese 10-year securities back toward an all-time high, raising the risk of capital outflow from China. “The widening spread reflects starkly contrasting monetary policy paths, with the Federal Reserve under pressure to raise interest rates and the People’s Bank of China keeping borrowing costs low. The widening U.S.-China yield gap has had little impact on the yuan, which traded little changed at 6.72 per U.S. dollar today, lingering near the strongest level since early 2023,” said a Bloomberg report. The benchmark 10-year U.S. Treasury yield inched as high as 4.81% in Asian trading overnight, its highest level in nearly three years, while Chinese yields of a similar security held steady at 1.69%. Meantime, bond traders are scrambling to shield their portfolios against further losses in Treasuries, as worries over the budget deficit and inflation push yields toward multiyear highs. Investors have shelled out millions of dollars in premium over recent sessions on Treasury options that would benefit if yields continued climbing. The global slide in bond prices is due in part to ongoing fiscal challenges and a war-fueled oil price surge that has further stoked inflation fears.
Malaysian palm oil futures weaker… Malaysian palm oil futures on Wednesday hovered below MYR 4,950 per MT, ending their recent rally as weaker edible oils on the Dalian and Chicago exchanges weighed on sentiment. Weak exports added pressure, with cargo surveyors estimating Malaysian palm oil shipments fell 6.5%–14.9% in August from the prior month. Ample supply also remained a concern, with inventories rising to a five-month high in July. Meanwhile, EU palm oil imports for the 2026/27 season, which began in July, plunged 21%, year-on-year, pointing to weaker demand from a key market. Demand from India could face headwinds as refiners favor cheaper soyoil, although expectations for strong August vegetable oil imports may provide some support. Losses were partly cushioned by a weaker ringgit, which makes palm oil cheaper for overseas buyers. Firmer oil prices provided further support amid concerns over supply disruptions, while rising El Niño risks raised worries about drier conditions and potential production losses across Southeast Asia.
Cattle futures see more chart-based selling from the specs…. October live cattle on Tuesday fell $0.60 to $212.075. November feeder cattle lost $1.90 to $308.525. Cattle futures saw more technical selling pressure. Both markets hit eight-month lows last week. Cash cattle trading last week at lower money is also limiting buying interest in futures. However, live cattle futures continue to trade at significant discounts to the cash cattle market, which could limit the downside in futures. USDA at midday Tuesday reported very light cash cattle trading so far this week, at $220.00. The agency said cash cattle trade last week averaged $219.25.
Lean hog futures pause but bulls have momentum… October lean hog futures on Tuesday fell $0.025 to $83.65 and hit a three-week high. The hog futures market paused Tuesday after recent good gains that suggest the futures market has bottomed out. A price downtrend on the daily bar chart was negated Monday. Stabilization in the cattle futures markets the past four sessions has also benefitted the lean hog futures bulls. However, the cash hog market continues to trend down. The latest CME lean hog index down 66 cents to $90.86. Today’s projected CME index price is down another 29 cents at $90.58. The national direct five-day rolling average cash hog price quote for Tuesday was $90.26.