Good morning!
Soybeans tick higher overnight… Good morning, as of 6 a.m. CT, January soybeans were up 4 ½ cents, while December soybean meal rose $1.40 and December soybean oil lost 35 points. December corn fell 3/4 cent. December soft red winter wheat was unchanged, with December hard red winter wheat down 1 ½ cents. Soybeans found their footing after coming under heavy pressure Monday as the Brazilian real saw its steepest one-day plunge since 1999 following President Luis Inacio Lula da Silva’s surprise runoff victory in the country’s presidential election (read more here.) Brazilian real futures steadied overnight. A lack of fresh demand news kept corn and wheat futures on the defensive overnight.
In outside markets, the dollar was firmer overall against major rivals (see item below). Nymex WTI oil futures fell 0.5% to trade around $101.30 a barrel. The yield on the 10-year Treasury note stood at 4.977%. U.S. stock-index futures pointed to a slightly higher start.
Some Brazil weather worries surface… After a better-than-expected start to planting season, a few weather concerns are starting to emerge in Brazil, said Dr. Michael Cordonnier, Pro Farmer crop consultant. Too much rain in southern Brazil has been accompanied by cooler-than-normal temperatures and localized frosts, he said. The pattern for several months has seen heavy rain in Parana, Rio Grande do Sul and Santa Catarina. The other concern is dryness in parts of central and northeastern Brazil. Southern Brazil has seen a slowdown in soybean planting, while the immediate impact has been on wheat and other small grain production, which will force Brazil to import more high quality wheat from Argentina, he said. Meanwhile, persistent wet conditions in southern Brazil have started to take a toll on the early planted summer crops in Parana.
- Cordonnier, however, left his soybean production estimate for Brazil unchanged at 182 million tons with a neutral bias. Soybean production will depend on November and December weather, he said. He left his Brazil corn production estimate unchanged at 140 MT with a neutral bias. He also left his Argentine soybean and corn estimates unchanged at 54 MT and 60 MT, respectively, both with a neutral bias.
Watch the dollar ahead of Fed decision… A firmer tone for the U.S. dollar adds another headwind for ag commodities this week. The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, was on track for a third straight gain Tuesday and trading not far off an 18-month high. Stabilizing sentiment around the AI trade “has allowed markets to reconnect with the broader supportive backdrop of a hawkish Federal Reserve and high energy prices,” said Francesco Pesole, currency strategist at ING, in a note. While the Fed is expected to leave interest rates unchanged on Wednesday, pre-meeting positioning may also be kicking in, Pesole wrote, “with the forward-looking FX market viewing Chair Kevin Warsh’s reiteration of inflation commitments as reinforcing the structural floor for the dollar.”
Rains over the Plains… A wave of low pressure over the Northern Plains/Upper Mississippi Valley will slowly dissipate by Tuesday evening, while producing rain over parts of the Upper Mississippi Valley and Central/Southern Plains on Tuesday morning into early afternoon, the National Weather Service said. A second wave of low pressure over the Northern High Plains will produce rain over parts of the Northern/Central Plains and the Upper/Middle Mississippi Valley on Wednesday morning. Showers and thunderstorms will develop over the Upper Mississippi Valley and Upper Great Lakes on Wednesday evening, the forecast said. By Thursday morning, rain will develop along and ahead of the boundary over parts of the Great Lakes and into the Middle Mississippi Valley.
Lula victory disappoints Brazil’s ‘farm caucus’... Sunday’s surprise re-election victory by President Luis Inacio Lula da Silva in Brazil’s presidential election runoff was a major disappointment for Brazil’s agribusiness leaders who had looked to a win by challenger Flavio Bolsonaro, Bloomberg reported. The report noted that the so-called farm caucus has frequently accused Lula of favoring small farmers at the expense of larger commercial producers. Tensions with Lula also reflect ideological and policy differences over land rights, environmental regulation, taxes and government support for agriculture, including farm credit and crop insurance, the report said. The group had expected Bolsonaro to move quickly to bring down interest rates by shoring up public finances and cutting spending.
- Bolsonaro’s party concedes… Bolsonaro’s political party on Monday said it accepted the result of the presidential election after the candidate had initially called for the results to be annulled after chaos at some polling stations Sunday night after a Supreme Court judge – at the request of both candidates – had extended voting hours due to weather and transportation disruptions. “We recognize the presidential result” announced Sunday, the Liberal Party, the biggest party in Brazil’s Congress said, according to the Financial Times.
Corn harvest still lags… USDA’s weekly crop progress data shows soybean harvest moving ahead of the average pace for this time of year while corn continued to lag behind despite a big leap in the past week. USDA said 60% of the corn crop was harvested as of Sunday, up from 44% a week earlier but behind the five-year average of 66%. Analysts surveyed by Bloomberg, on average, were expecting a 59% harvest figure. Iowa, at 47% complete, was 20 percentage points behind the average pace, while Nebraska was nine percentage points behind its average at 55%. USDA said 56% of the U.S. corn crop was rated “good” or “excellent,” unchanged from the previous week and matching expectations. USDA will discontinue crop ratings now that harvest is more than 50% complete. The final Pro Farmer Crop Conditions Index for corn (0 to 500 scale, 500 equals perfect) edged up 0.02 point to close the season at 349.26.
USDA data also showed:
- 79% of the soybean crop was harvested, up from 64% a week ago and two percentage points ahead of the five-year average and the average guess.
- 76% of the winter wheat crop was planted, one percentage point behind the five-year average and one percentage point ahead of the average estimate. Emergence is also just one point behind the five-year average at 53% after lagging early, as intermittent rains in the Plains over recent weeks helped germination.
- 33% of the cotton crop was rated in good to excellent condition compared to the five-year average of 40% in the final rating of the season.
Finland, Norway hold call with Putin... Finland’s President Alexander Stubb and Norway’s Prime Minister Jonas Gahr Store held a phone call with Russian President Vladimir Putin to talk about prospects for a peace deal with Ukraine, Bloomberg reported. “The discussion was frank and substantive,” Stubb said. “Ending the war requires direct discussions.” The Kremlin said that Putin “emphasized that achieving a just and long-term peace is possible only if the legitimate interests of the Russian Federation are fully and unconditionally taken into account,” Bloomberg reported. Diplomatic efforts and prospects for talks have been seen as a weight on wheat and, to some degree, corn futures, though few analysts see prospects for an imminent breakthrough. Store and Stubb said the call related to trilateral talks involving Russia, Ukraine and the U.S. planned for Abu Dhabi next month.
Food and fuel impact of Russia-Ukraine war… Bloomberg’s Tom Fevrier and Hayley Warren tallied up the damage to food and fuel trade resulting from the Russia-Ukraine war. Citing data from grain consultancy ProZerno, Bloomberg reports Russian wheat exports fell 52% year-on-year in September to 2.2 million tons. As of Oct. 20, Russia had exported 1.06 million tons, with the full-month total also expected to be well below the 5.24 million tons shipped in October 2025. Meanwhile, Ukraine is exporting only about a half of its forecast agricultural volumes, the report said, citing Ukraine officials. Globally, Kpler data shows Russian diesel exports dropped by 467,000 barrels per day year-over-year, the report said, contributing to an overall global diesel drop from 7.1 million to 6.1 million barrels per day.
GOP pushback on Russia cooperation… Agri-Pulse notes mounting criticism of President Donald Trump’s decision to allow Russia to sell diesel to the U.S., including from within the Republican Party. Republican Reps. Don Bacon of Nebraska and Brian Fitzpatrick of Pennsylvania, along with Democratic Rep. Marie Gluesenkamp Perez of Washington, introduced a bill that would prevent the Treasury Department from waiving a prohibition on Russia energy imports, the report said. Meanwhile, Sen. Mitch McConnell, R-Ky., wrote in a Wall Street Journal guest column that Trump’s approach to ending the war with Ukraine was more likely to prolong the conflict than shorten it. “And when Russia’s limited supply of diesel has changed hands, it will have done little to bring down prices at the pump,” McConnell wrote.
Palm oil slips… Malaysian palm oil futures remained under pressure, dropping more than 1.5% to trade near MYR 4,700 a tone and slipping toward a two-week low, noted Trading Economics. Weakness in Dalian and Chicago edible oils pressured sentiment, along with record-high September supplies. Easing crude prices also undercut support, the report said.
COF numbers, firm cash buoy cattle… December live cattle rose $0.075 to close at $231.20, finishing near the daily low after hitting a 3.5-month high early on. November feeders rose $0.425 to $348.55. Both were lifted in early trade by Friday’s friendly Cattle on Feed Report but trimmed gains on profit taking. USDA at midday today reported cash cattle trading last week averaged $227.06, which is up nearly $3 from the week prior’s average of $224.19.
Hogs hit another low… December lean hog futures fell $0.90 Monday to close at $64.675, hitting another contract low. Cash fundamentals continue to trend lower. Tuesday’s projected CME index price is down $1.10 at $70.08. The USDA noon pork report Monday showed cutout value was up $1.31 at $75.40, led by gains in ribs.