Good morning!
Grain futures weaker on “Turnaround Tuesday”… At 6:00 a.m. CT, December corn was down 5 cents. November soybeans were 8 cents lower. December soybean meal was down $1.80. December bean oil was 91 points lower. December SRW wheat was down 9 3/4 cents. December HRW was down 12 1/4 cents. Bears overnight took back much of Monday’s decent gains in the grains, save for soybeans and meal, which had more modest selling pressure overnight. The key outside markets today see the U.S. dollar index slightly down. October Nymex WTI crude oil prices are solidly lower, hit a two-week low and are trading around $93.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.94%.
U.S.-China trade talks continue ahead of Trump-Xi summit… Chinese and U.S. officials wrapped up their second day of talks in New York on Monday to discuss artificial intelligence, investment and trade as they sought to advance negotiations ahead of President Xi Jinping’s visit to the U.S. this week. “Talks on Monday focused on delivering on what’s been agreed by the U.S. and Chinese lead negotiators, China’s Vice Finance Minister Liao Min said in brief remarks outside the JPMorgan Chase & Co.’s headquarters in New York, where the meetings took place. Liao didn’t comment when asked about discussions over any possible extension of the trade truce, and no other senior officials from either country were seen at the venue,” said a Bloomberg report. U.S. Treasury Secretary Scott Bessent, China’s top trade negotiator Li Chenggang and Vice Premier He Lifeng held a full day of talks on Sunday, before Xi’s expected Wednesday arrival in the U.S. After the Sunday talks, Li said the meeting was conducted in a “good atmosphere” while Bessent described it as “very successful.” With the trade truce set to expire in November, all eyes are on whether China and the U.S. can agree on an extension and, if an agreement can be reached, how long it will last. Speaking on Bloomberg TV on Monday, U.S. Trade Representative Jamieson Greer said a three to six-month extension is possible, adding that there was still time to talk about the terms.
Iran wants blockade lifted: report… Japan’s Kyodo News Agency has cited an unnamed senior Iranian official as saying that Tehran has proposed reopening the Strait of Hormuz in seven days if a U.S. blockade is lifted, as the basis for talks with mediating countries at the UN. Iran’s Revolutionary Guard also said it must negotiate if it’s in the national interest to do so. President Trump is set to address the UN General Assembly in New York later today and may meet with his Iranian counterpart, Masoud Pezeshkian, on the sidelines, said a Bloomberg report. However, “there have been multiple efforts to end the war that has roiled energy markets for over six months. So far, all have proved to be fruitless, including an interim peace deal that was in effect for a short period over the summer. Since then, the U.S. has been blockading Iranian ports, limiting vital energy export revenues,” said the report.
Saudi Aramco says it will soon be able to load oil from Red Sea… Several Asian refiners have been told informally by Saudi Aramco they will soon be able to pick up oil from the Red Sea port of Yanbu, Bloomberg reported, citing traders familiar with the matter. “At least three fuel processors have been given informal assurances about the loadings from executives at the state-run company, rather than official notices, the traders said, asking not to be named as they’re not authorized to speak to media. No timelines were given, they said.” Loadings from Yanbu have been all-but-halted since the East-West pipeline, which was carrying about 4 million barrels of oil a day to the port, was closed after being attacked by drones launched from Iraq on Sept. 10. Saudi Arabia was seeking to return about half the capacity within days, a person familiar told Bloomberg late last week, although there have been no recent updates from Aramco.
Rain persists from Plains to upper Midwest… The National Weather Service today said there is a risk for excessive rainfall to expand into the central Plains. The southwest moisture will gradually move northeastward along a slow-moving boundary, bringing showers and thunderstorms across the northern/central Plains into the Upper Midwest by late Wednesday into early Thursday. There are also showers and thunderstorms forecast across portions of the Four Corners, southern and central Plains/Rockies and the Great Basin. Temperature-wise, a strong surface high will bring colder-than-average temperatures across the northern/central Plains into the Mid-Atlantic and Northeast behind the frontal boundary, while the southern Plains into the Southeast will remain warm and humid.
Weekly USDA crop progress reports: Corn condition holds steady… Monday’s USDA weekly crop progress reports showed the U.S. corn crop was 17% very poor to poor, 26% fair, and 57% good to excellent. The national level ratings were unchanged from week-ago levels for the second consecutive week. Still, the Pro Farmer Crop Condition Index saw a 1.69 point decline, led by a drop in Nebraska (down 1.29 points) as well as deteriorations in the Corn Belt states of Illinois (down 0.44 points) and Iowa (down 0.17 points). USDA pegged the U.S. soybean crop as 14% very poor to poor, 28% fair, and 58% good to excellent. The very poor to poor category increased by 1% this week, with the fair category falling 1%. The changes saw the CCI drop 2.86 points to 357.55. Condition changes were sporadic geographically, though most states in the Midwest noted minor declines. Ohio served as the main exception to that, increasing 0.49 points from last week. Click here to read more.
Pro Farmer crop consultant keeps U.S. corn, soybean yield forecasts unchanged… Our longtime crop consultant, Dr. Michael Cordonnier, in his report this week said the 2026 U.S. corn yield was left unchanged at 177.0 bu/ac, with a neutral-to-lower bias.
“Wet weather was the story across the central Midwest last week and over the weekend. The rainfall increased wetness and flooding and maintained slow corn and soybean dry-down. Rainfall this week should favor northwestern and eastern areas of the Corn Belt. The central Corn Belt should dry out enough later this week allowing early harvest activity,” he said. ”I am estimating the final corn yield in the range of 175 to 177 bu/ac. The final corn harvested acreage may decline 300-500,000 acres due to extra corn being harvested for silage.” Meantime, Cordonnier’s 2026 U.S. soybean yield was left unchanged this week at 51.5 bu/ac, with a neutral bias. “Wet weather last week in the central Midwest slowed soybean maturation and early harvest activity. Continued wet weather could start to be a concern for seed quality,” he said.
Western Europe drought continues…. France, southern parts of the U. K. and a few neighboring areas were once again dry during the past week, World Weather said. “Production for the summer crops has already been slashed due to the poor growing conditions this year. Planting prospects for the winter grains and oilseeds are also poor, and abundant rain is needed to break the dryness,” said the forecaster. “Moisture shortages are also persisting in southeastern Europe and portions of Ukraine. These areas are also in need of rain to improve planting prospects for winter crops.” A large section of western Europe will trend drier than usual this week, “favoring a good environment for aggressive harvesting and fieldwork. However, conditions will remain poor for the planting, emergence and establishment of winter crops – not only in Western Europe, but in the southeast as well. Significant moisture is needed immediately and may not materialize until next month.”
“Canada Seeks to Wrap India Trade Talks Soon as U.S. Ties Fray”… That’s a Bloomberg headline overnight. Canada’s trade minister said trade talks with India are “moving along really well” and could conclude in the coming months. The push to deepen economic ties with India comes as Canada faces rising trade tensions with the U.S. following the breakdown of negotiations between the two countries late last month. Canada is looking to India for new markets for its goods, including nuclear capacity, liquefied natural gas, and fertilizer, and has sought tariff concessions from India for potash, said the report.
Malaysian palm oil futures prices hold near steady… Malaysian palm oil futures on Tuesday hovered above MYR 4,850 per MT, holding their gains since mid-August on strong demand for vegetable oils. Biofuel feedstock costs saw a broad increase from palm oil and soy oil, with persistent risks of an escalation in the Middle East and concerns of lower crude oil output from Saudi Arabia lifting demand for biofuel alternatives. On top of that, Indonesia’s B50 biodiesel mandate is set to divert more palm oil to domestic use. Likewise, imports from top consumer India rose 7% from July to 782,761 MT in August, the highest since February, as refiners replenished stocks ahead of the festival season. Separately, Malaysia raised its October crude palm oil reference price while keeping the export duty at 10%. In turn, the forecast of one of the most aggressive El Ninos in history continued to threaten supply from major producers Malaysia and Indonesia.
Cattle feedlot “house of cards” … Last Friday’s monthly USDA Cattle on Feed Report shows a “house of cards” that’s allowed feedlot inventories to run high despite a shrinking calf crop that is on the verge of collapse, says Oklahoma State University livestock extension marketing specialist Derrell Peel. In Monday’s OSU Extension “Cow-Calf Corner” newsletter, Peel writes that while Sept. 1 inventories held at 11.163 million head, up 0.7% year over year, the figure is the result of a record-low marketing rate, which has been accomplished entirely by extending the number of days on feed. That’s resulted in carcass weights rising by a massive 75 pounds over three years. By comparison, from 1960-2022 the average annual increase in steer carcass weights was 4.0 pounds/year, Peel noted. In other words, the roughly 75-pound increase in steer carcass weights in the last three years is equivalent to the increase over the previous 18 years. With August placements plunging 9.2% and the calf crop down 3.79 million head from its 2018 peak, Peel asserts this low marketing rate cannot continue dropping. As a result, lower placements will force feedlot inventories lower in the coming months, with feeder supplies expected to tighten further into 2027.
Cattle futures markets post strong price rebounds… October live cattle on Monday rose $5.025 to $220.95. November feeder cattle gained $8.10 to $326.10. The cattle futures markets saw solid buying interest following last Friday afternoon’s bullish USDA monthly cattle-on-feed report that showed record-low placements and marketings. Solid gains in boxed beef prices at midday also supported buying interest in futures. Short covering and perceived bargain hunting from the speculators were featured. USDA at midday Monday reported cash cattle trading last week averaged $221.87 down 95 cents from $222.82 the week prior.
Lean hog futures see tepid short covering… October lean hog futures on Monday rose $0.05 to $78.15. The lean hog futures market saw tepid short covering for much of the session, following the recent steep price downdraft that saw prices hit a 15-month low Friday. Bulls are still on shaky technical ground, as evidenced by Monday’s low-range close that saw most of the early gains given up. The near-term chart posture remains firmly bearish. A weakening cash hog market also is negative for lean hog futures. The latest CME lean hog index is down $1.00 at $84.02. Today’s projected CME index price is down another 60 cents at $83.42. The national direct five-day rolling average cash hog price quote for Monday was $83.37.