Good morning!
Grain prices steady-slightly firmer overnight… As of 6:00 a.m. CDT, December corn was unchanged, November soybeans unchanged and December HRW and SRW wheat futures markets a penny higher. Soybeans are so far today not seeing any follow-through strength from a late price pop Wednesday following an upbeat social media post on soybeans from President Trump. (See his entire post below.) The near-term technical postures for corn, soybeans and winter wheat futures have deteriorated this week, which still has the chart-based speculative bears energized. Corn and soybean harvest pressure, and the related commercial hedge selling, are also likely to keep any grain market rallies constrained for the near term. The key outside markets today see the U.S. dollar index slightly weaker. Nymex crude oil prices are near steady and trading around $61.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11 percent.
Trump tries to reassure U.S. soybean farmers… President Trump early Wednesday afternoon posted on social media: “The Soybean Farmers of our Country are being hurt because China is, for “negotiating” reasons only, not buying. We’ve made so much money on Tariffs, that we are going to take a small portion of that money, and help our Farmers. I WILL NEVER LET OUR FARMERS DOWN! Sleepy Joe Biden didn’t enforce our Agreement with China, where they were going to purchase Billions of Dollars of our Farm Product, but Soybeans, in particular. It’s all going to work out very well. I LOVE OUR PATRIOTS, AND EVERY FARMER IS EXACTLY THAT! I’ll be meeting with President Xi, of China, in four weeks, and Soybeans will be a major topic of discussion. MAKE SOYBEANS, AND OTHER ROW CROPS, GREAT AGAIN!” Following Trump’s post and in late trading Wednesday, soybean futures rallied from modest losses to close with double-digit gains. As the world’s top soybean buyer, China wields enormous influence over global markets. China is reviving a familiar tactic of holding back on U.S. purchases — deployed during the first trade war under Trump — as the two countries try to reach a trade deal.
High-pressure ridge to bring high heat to eastern half of U.S. … The National Weather Service today said there is an upper-level ridge that will grow larger over the central and later the eastern U.S. the next few days. This ridge of high pressure will continue to support an extended period of unseasonably hot weather across the Plains and Midwest before expanding eastward through the end of the week and into the weekend. The hottest weather relative to normal will be confined to the northern Plains and Upper Midwest, where high temperatures will soar to between 10 and 20 degrees above normal today, and to between 20 and 30 degrees above normal Friday and Saturday. High temperatures for many places will likely challenge records Friday and Saturday as highs climb well into the upper 80s to the low/mid 90s. Record-high low temperatures Saturday morning are also likely for many places as well given temperatures forecast to only bottom out in the 60s to near 70. “Despite the calendar saying it’s October, it sure will be feeling much more summer-like than fall-like the next few days,” said the NWS.
U.S. government remains shut down… The U.S. government shutdown is into its second day and the Trump administration is raising the stakes by halting $18 billion in infrastructure funding and signaling a willingness to fire thousands of federal workers. “The administration’s moves have suggested a hardening of positions, which could require one side to make bigger concessions to get the federal government back to work, and some Republicans have expressed concerns that the strategy could backfire,” said a Bloomberg report. The shutdown could have significant economic impacts, with the Congressional Budget Office estimating a cost of $400 million per day in lost compensation, and some economists warning that mass firings could sap corporate confidence and reduce capital investments, said Bloomberg.
USDA confirms suspension of its data releases during shutdown… The United States Department of Agriculture confirmed it will halt all new data and reports during the U.S. government shutdown. “All reports and data releases will cease,” a spokesperson told the Wall Street Journal. According to the agency’s contingency plan, most USDA employees will be furloughed, with limited exceptions. The government shutdown disrupts the release of key USDA publications, including the weekly export sales report due today and the October supply and demand (WASDE) report scheduled for next week.
More signs of a global crude oil glut… Unsold Middle Eastern crude oil cargoes from the recently wrapped-up trading cycle are pointing to early signs that an expected global oil surplus could be starting, according to a Bloomberg report. The volume of unsold oil set to be loaded in November ranged from 6 million barrels to 12 million barrels, according to estimates from traders. Weaker-than-expected Chinese demand and OPEC+'s push to continue returning idled output are weighing on the market, traders said. As the monthly spot trading cycle ends, shipments are usually discounted to move them, and price-sensitive buyers in China and India are the typical purchasers. However, there’s no indication that these unsold cargoes have been snapped up yet, according to the traders.
Corteva to split seed, pesticide units… Global agriculture technology giant Corteva Wednesday announced plans to separate into two independent, publicly traded entities: “new” Corteva, which will continue to sell crop protection products – herbicides, fungicides, insecticides and biologicals – and SpinCo, which will focus on the seed genetics business. SpinCo will include Pioneer, the company’s legacy seed brand established in 1926, as well as Brevant and regional seed brands, including Dairyland Seed. Upon separation of the companies, Greg Page, current Corteva chairman will lead new Corteva, while Chuck Magro, current Corteva CEO, will become CEO of SpinCo.
Malaysian palm oil futures rally… Malaysian palm oil futures on Thursday rose around 1% to above MYR 4,400 per MT, up for the second day amid stronger Chicago soyoil prices. Signs of higher exports also lifted sentiment, with cargo surveyor AmSpec Agri noting a 7.3% increase in September shipments. Meantime, the Malaysian Palm Oil Board projected year-end stocks could fall to 1.7 million MT, citing seasonal production dips and stronger festive demand. In top buyer India, authorities raised base import prices for all vegetable oils to reflect higher global benchmarks, with imports expected to reach a record 17.1 million MT in 2025/26. Indonesia, the leading producer, exported 16.2 million MT of crude and refined palm oil from January to August, a 13.6% jump, year-on-year. However, further strength was capped by a stronger ringgit. In China, the Dalian Exchange remains closed for the Golden Week break, with activity resuming on Oct. 9.
Risk aversion nips cattle futures markets… The live and feeder cattle futures markets on Wednesday saw modest selling pressure amid keener risk aversion in the general marketplace as the U.S. government has shut down. A downbeat monthly U.S. ADP employment report Wednesday morning also limited buying interest in the cattle futures markets. The cattle and fresh beef market fundamentals have weakened. That’s keeping the cattle futures bulls tentative. USDA reported cash cattle trading last week averaged $232.65, down $4.86 from the week prior. Very light cash cattle trading has been reported so far this week, with USDA at midday Wednesday reporting steers and heifers are averaging $233.00. Separately, the FDA has conditionally approved Dectomax-CA1 (doramectin injection) injectable solution for the prevention and treatment of New World screwworm larval infestations, and prevention of NWS for 21 days. The conditional approval is for use in cattle only.
Lean hog futures bulls fading… More profit-taking pressure from the shorter-term speculative traders was featured in lean hog futures trading Wednesday, which marked the third straight session of price losses and suggests the bulls are now exhausted and that a market top may be in place. Risk aversion was keener in the general marketplace Wednesday amid the U.S. government shutdown and following a very weak monthly ADP jobs report. Still, futures’ discounts to the cash hog index may limit further selling pressure in hog futures. Cash and fresh pork fundamentals are weakening. The latest CME lean hog index is down 5 cents at $104.73. Today’s projected cash hog index is down 47 cents at $104.26. Wednesday’s national direct 5-day rolling average cash hog price quote was $102.43.