Good morning!
China purchases lift soybeans overnight… As of 6 a.m. CT, December corn was down ¾ cent. November soybeans rose 6 ¼ cents, while December soybean meal gained $1.20 and December soybean oil rose 9 points. December soft red winter wheat fell 3 cents, while December hard red winter wheat declined 4 1/4 cents. Soybeans were lifted overnight after a news report said China had bought several cargoes of soybeans (see item below). Corn and wheat futures drifted lower. Harvest pressure remains a weight on corn and may limit soybean upside. A lack of fresh demand news has weighed on both corn and wheat.
In key outside markets, Nymex WTI crude oil futures rose 1.3% to $94.39 a barrel. The U.S. dollar was higher versus most major rivals. The yield on the 10-year Treasury stood at 5.211%. U.S. index futures pointed to a flat to lower start for the stock market as investors await a key inflation reading (see item below).
China renews U.S. soybean purchases after hiatus… Chinese state buyers bought 8 to 10 Panamax cargoes of U.S. soybeans this week, Reuters reported early Wednesday, marking the first such deals since last month’s summit meeting between U.S. President Donald Trump and Chinese leader Xi Jinping in Washington. Reuters, citing three trade sources, said the cargoes are for shipment from December onwards. The purchases mark a round of renewed Chinese buying after a pause of several weeks tied in part to weak demand during the country’s week-long National Day holiday in early October. The report says the purchases were made by state-owned trading firms, paying premiums of $3.10 to $3.20 a bushel over January Chicago soybean futures. Each Panamax cargo carries around 65,000 metric tons, or around 2.39 million bushels, of soybeans.
CPI data on deck… The consumer price index for September is set for release at 7:30 a.m. CT. The monthly reading is expected to accelerate to 0.6% from 0.4% in August, with the 12-month reading rising to 3.6% from 3.4%. Core CPI, which strips out food and energy costs, is expected to show a year-over-year rise of 2.5%. The reading will go a long way toward setting expectations for the Federal Reserve’s next policy meeting later this month. Traders are currently penciling in a hold for October but have priced in another quarter-point hike by year-end.
- Fedspeak… New York Fed President John Williams told Bloomberg in an interview that he still sees one more rate hike this year as appropriate, but doesn’t at the moment believe the central bank will need to raise rates again in 2027. He said signs remain that inflation will slow “quite a bit” and move nearer the Fed’s 2% target next year as the impacts of tariffs and an energy price shock fade. Unlike other regional Fed bank presidents, the New York Fed chief is a permanent member of the rate-setting Federal Open Market Committee.
Southern Plains braces for more severe weather… Heavy rain and widely scattered severe storms capable of large hail, damaging winds, and possibly a tornado are expected over portions of the central and southern Plains into the Lower Missouri Valley, the National Weather Service said early Wednesday. Unseasonable warmth will continue for a few more days across the Midwest and Southeast where several daily record highs could fall. The forecast says that a consolidating low pressure system will maintain wet and unsettled weather over the Plains and Lower Ohio Valley, expanding eastward ahead of strong high pressure Thursday. The main impacts from this initial system include widespread heavy rainfall and scattered severe thunderstorms along the front in the Southern Plains today and tomorrow. Over the next 48 hours, 2-4 inches of rain is possible across a wide swath from south-central Kansas to the Texas Big Bend.
Harvest progresses, but still behind… Dry weather allowed producers to make up ground on corn and soybean harvest last week, though both remain behind the average pace for this time of year, USDA said in its weekly crop progress report released Tuesday afternoon. The report was released a day later than usual due to Monday’s federal holiday. USDA said corn harvest was 33% complete as of Sunday, up from 23% the previous week but behind the 37% average analyst estimate and the five-year average for this time of year at 39%. Iowa, which saw historic rains in September, was 14% complete, up from 7% a week earlier but well behind the five-year average of 34%. Nebraska was 27% complete, up from 15% but lagging the average of 35%.
The percentage of the U.S. corn crop rated good or excellent rose to 56% as of Oct. 11, up from 54% the previous week, which was the lowest of the crop season. Analysts surveyed by Bloomberg had expected unchanged conditions. The Pro Farmer Crop Condition Index (0 to 500 scale, 500 equals perfect) for corn rose to 348.16 from 347.28.
USDA said the soybean crop was 46% harvested, ahead of the 43% average guess but behind the five-year average of 50%. USDA said 57% of the soybean crop was rated good or excellent, unchanged from the previous week and matching expectations. The Pro Farmer soybean CCI rose to 355.18 from 352.77.
Winter wheat plantings were pegged at 51% complete, up from 36% a week ago and just ahead of expectations for 50%. The five-year average is 58%.
EPA proposes full reallocation of refinery exemptions… EPA Administrator Lee Zeldin on Tuesday announced a proposed Renewable Fuel Standard rule to fully reallocate 1.76 billion RINs in 2025 small refinery exemptions (SREs) back to large refiners. The EPA is seeking public comment through Dec. 4 on two options:
- Option 1: Divide waived 2025 volumes evenly between 2026 and 2027 compliance years.
- Option 2: Reallocate all waived volumes into 2027.
The rule may also extend the 2026 reporting deadline beyond March 31, 2027. Major agricultural groups, including the National Corn Growers Association and American Soybean Association, praised the proposal for keeping biofuel demand whole.
Diesel squeeze to continue into 2027… The International Energy Agency on Wednesday said diesel supply will remain tight well into next year. “Falling inventories, soaring cracks, and steepening levels of backwardation have signalled the need for additional supplies,” the Paris-based agency said in its monthly report for October. “However, even with a rapid recovery expected in refinery throughputs into year-end, gasoil supply falls short of meeting demand in 4Q26, suggesting that the replenishment of lost inventories, outside of typical seasonal fluctuations, is unlikely before 2H27.” (The IEA uses “gasoil” as an overarching term covering diesel, heating oil, and other middle distillates.)
Chinese exports soar… China’ exports rose 36.3% in September from a year ago, accelerating after a 25% rise in August, according to data from the General Administration of Customs. The Wall Street Journal said the figure topped the 25% increase forecast by economists in a survey. The surge threatens to raise trade tensions with major partners, the report noted. The export boost widened China’s trade surplus to $133.5 billion in September from $119.1 billion in August, and exceeded the $111.4 billion forecast by economists. Imports also grew rapidly, rising 31.0% from a year earlier. The Journal noted the data comes amid rising trade friction with the European Union, which is pressing Beijing to address a widening trade imbalance.
Malaysian palm oil futures firm… Malaysian palm oil futures remained firm above MYR 4,700 per ton, continuing their upside momentum as strength in China’s Dalian edible oils and higher crude prices enhance palm’s competitiveness in biodiesel, TradingEconomics reported. The report said export signals were also positive, with cargo surveyors estimating Oct. 1-10 exports jumped 33.5% to 37.7% versus the same period in September, with festive purchases by top buyer India and firmer trading activity in China last month offering additional support.
Profit-taking weighs on cattle… December live cattle fell $0.225 to end at $226.375 Tuesday, after poking to a two-month high in early trade. November feeders lost $0.075 to finish at $341.025, after hitting a three-month high. Cattle markets saw corrective price pullbacks and some modest profit taking. Cash cattle trade has yet to develop this week. Boxed beef prices rose on Tuesday.
Hogs remain under seasonal pressure… December lean hog futures fell $0.35 Tuesday to end at $68.025 on continued technical selling and weak cash fundamentals. The projected CME lean hog index for Wednesday is projected to fall $0.57 to $75.94.