Good morning!
Grain futures mixed overnight… At 6:00 a.m. CT, December corn was up 1/2 cent. November soybeans were 6 cents higher. December soybean meal was up $7.20 and hit another 2.5-year high. December bean oil was 64 points lower. December SRW wheat was down 3 1/4 cents. December HRW was down 1/2 cent. The surging meal market is the feature in the grain markets this week and is keeping November soybeans near the recent contract high. On tap today is the weekly USDA export sales report. The key outside markets today see the U.S. dollar index slightly down. October Nymex WTI crude oil prices are lower and trading around $100.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.98%.
Heavy rain potential continues in upper Midwest; cooler temps… The National Weather Service today said a developing axis of heavy rainfall will occur along to support the threat of heavy rains and widely scattered flash flooding from the Northern Plains to the upper Midwest through Saturday. Cooler air from Canada is beginning to dip into the northern tier states, bringing cooler-than-normal temperatures into the Midwest. Meanwhile, the persistent heat dome remains strong across the South, resulting in a pronounced north-south temperature contrast. High temperatures in the low 70s and upper 60s can be expected north of the meandering front in the central Plains and Midwest, compared to upper 90s and triple-digit highs south of the front across the southern Plains and mid/lower Mississippi Valley.
Russia, Ukraine continue to attack the other’s infrastructure… Ukraine damaged a major Russian oil refinery less than 200 miles northeast of Moscow, while Russian forces attacked Ukrainian infrastructure overnight, a fresh indication the sides haven’t agreed to an energy truce despite claims by President Trump, Bloomberg reported. A fire broke out at the Yaroslavl oil refinery following the drone attack and was later extinguished, regional governor Mikhail Yevrayev said on Telegram. The refinery, which has a processing capacity of about 300,000 barrels a day, is co-owned by Rosneft PJSC and Gazprom Neft PJSC and was designed to supply oil products to Moscow and the surrounding regions, the country’s largest fuel-consumption market. Ukrainian President Volodymyr Zelenskyy confirmed the attack on the plant and said his country was responding to Russian aggression in a post on social media. Meantime, Russia’s Defense Ministry said it carried out multiple strikes on Ukraine’s civil and energy infrastructure, including a battery-storage park in Brovary near Kyiv and a power station feeding the Black Sea port of Izmail. Ukraine’s Air Force said Russia fired missiles and 157 drones targeting mainly the Kyiv, Zaporizhzhia and Odesa regions. Air defenses downed 131 targets, it said, without indicating whether any missiles were intercepted. “While both Moscow and Kyiv said they would welcome a potential energy truce, they made it clear there’s no agreement to stop attacks,” said the report.
Farm bill clears committee… The Republican-led Senate Agriculture Committee on Wednesday approved a farm bill in a 12-11 party-line vote, with the legislation now headed to the Senate floor. Agri-Pulse noted that friction erupted among Republicans as Sens. Joni Ernst and Charles Grassley, both of Iowa, objected to Chairman John Boozman’s, R-Ark., decision to keep the bill closed to new amendments following its early August markup. The committee in August had rejected the bill in a party-line vote, due in part to the absence of Sen. Mitch McConnell, R-Ky., who was out due to a fall. McConnell returned to the Senate this week. Ernst was unable to win consideration of a measure to nullify farm animal containment laws, such as California’s Proposition 12, while Grassley wanted to push for an amendment on competitiveness in the meatpacking industry, Agri-Pulse reported.
FOMC, Fed Chair Warsh calm the bond market… U.S. Treasuries prices advanced early today as the Federal Reserve’s interest rate hike and press conference from Chairman Kevin Warsh Wednesday afternoon reassured traders and investors that the U.S. central bank is determined to tame inflation. Yields on 10-year Treasuries fell four basis points to 4.98%, snapping an eight-day rising streak, as traders saw the first U.S. rate hike in three years as supporting the Fed’s credibility. The two-year yield fell three basis points to 4.70%and retreating from a 2024 high reached on Wednesday. “We expect interest rates to stabilize at these elevated levels, with the market already pricing more hikes than projected by the Fed,” said Olumide Owolabi, senior portfolio manager at Neuberger Berman and as reported by Bloomberg. While the increase in U.S. interest rates was fully priced in ahead of the Fed’s decision Wednesday, traders and investors had been nervous that a surprise hold on rates, or comments from Warsh at his presser, could trigger a surge in volatility and yields. President Trump did not like the Fed rate hike, saying U.S. interest rates should be at 1%. However, Trump did not lash out against Warsh and instead criticized the FOMC members.
USDA announces new American Biofuels Trade Outlook… The agency on Wednesday released the American Biofuels Trade Outlook, “a plan that builds upon 2025’s record U.S. ethanol export performance, removes restrictions to American biofuels, and secures new market opportunities for U.S. farmers,” said a USDA press release. The year 2025 marked “the strongest year for ethanol exports in the history of the U.S., supporting our great American farmers. This record-setting 2.2 billion gallons of U.S. ethanol shipped across the world this past year representing $4.7 billion is not by accident, it reflects the hard work of America’s farmers,” said USDA Secretary Brooke Rollins. “This milestone demonstrates how American innovation and rural investment can deliver prosperity for consumers and producers at home and around the globe. American farmers are fueling the future, and the American Biofuel Trade Outlook outlines the USDA’s exact plan to ensure that success continues, and America’s producers continue to prosper,” she said.
For more details, see the entire American Biofuels Outlook.
Indonesia pushing E20 biofuel… Indonesia is doubling its 2028 bioethanol-blending target to 20%, to reduce reliance on fuel imports under President Prabowo Subianto, according to Bloomberg. Authorities are preparing about 2 million hectares for sugarcane cultivation and sovereign wealth fund Danantara will develop ethanol-processing facilities, said the report. The planned expansion will require a significant increase in ethanol supply, with much of the additional fuel expected to come from sugarcane, despite Indonesia being the world’s second-largest sugar importer. The move would extend Indonesia’s aggressive biofuels drive after it raised the mandatory palm-based biodiesel blend to 50% in July. “Demand for crop-based fuels is also rising globally as governments seek to support agriculture, cut transport emissions and improve energy security, a trend given fresh impetus by disruption to oil exports through the Strait of Hormuz this year,” said Bloomberg.
USDA updating NASS data products, services… USDA’s National Agricultural Statistics Service (NASS) has launched AgInsights, “a new data dissemination tool that will serve as a key component of NASS’s ongoing modernization strategy. Designed to enhance currently used data products and services, the AgInsights application offers streamlined information dissemination, increased operational efficiency, and a more dynamic, interactive experience so producers have easier navigation and access to the latest agricultural data,” said a USDA press release on Wednesday. “NASS recognizes that producers, whether large or small, established or emerging, need timely, actionable information to make informed decisions. AgInsights will bridge the digital divide, ensuring equitable access to critical data for all producers, including those who have historically faced barriers to information.” NASS asked an initial group of agricultural data users to test the application and provide feedback. Their recommendations informed the development of the product to help meet industry expectations across commodity sectors. For more details on AgInsights, click here.
Malaysian palm oil futures rally… Malaysian palm oil futures today surged over 2-1/2% to around MYR 5,015 per MT, extending recent gains as trade resumed after a holiday Wednesday. A weaker ringgit and expectations of tighter supply underpinned sentiment, with Indonesia’s B50 biodiesel mandate set to divert more palm oil to domestic use and El Niño risks clouding output in Indonesia and Malaysia. Crude oil prices holding above USD 100 per barrel further boosted palm’s appeal as a biodiesel feedstock. In India, the world’s largest palm oil consumer, August imports rose 7% month-on-month to 782,761 MT, the highest since February, as refiners replenished stocks ahead of the festival season between August and November. Separately, Malaysia raised its October crude palm oil reference price, keeping the export duty at 10%. However, weaker exports tempered upside momentum, with cargo surveyors estimating shipments fell between 17.8–25.6% in the first half of September compared with the same period in August.
Cattle futures see more profit taking, corrective selling… October live cattle on Wednesday fell $2.25 to $218.45. November feeder cattle lost $5.80 to $323.10. The live and feeder cattle futures markets saw more profit-taking and corrective selling pressure from recent good gains. Selling across most of the raw commodity sector Wednesday, led by a big drop in crude oil prices, also pressured the cattle futures markets. Losses in cattle futures were more modest for most of the session, but selling interest picked up in late trading. Livestock heat stress relief is expected especially next week and some grazing conditions may improve in October after some timely rain falls in western Texas and areas northeast into a part of Kansas. More rain will still be needed, though, said World Weather. USDA at midday reported no cash cattle trading so far this week. The agency said cash cattle traded last week at higher money, averaging $222.82, up $3.76 from the week prior’s cash trade average of $219.06.
Lean hog futures hit another 15-month low… October lean hog futures on Wednesday fell $0.40 to $78.675 and hit another 15-month low. The hog futures market saw mild technical selling and weak long liquidation in a choppy trading session. The near-term chart posture is now firmly bearish. A weakening cash hog market is also negative for lean hog futures. The latest CME lean hog index is down 61 cents to $86.60. Today’s projected CME index price is down another 79 cents at $85.81. The national direct five-day rolling average cash hog price quote for Wednesday was $84.24.