Good morning!
Grain prices narrowly mixed ahead of USDA data… As of 6:00 a.m. CDT, December corn was up 1/4 cent, November soybeans down 1 1/2 cents and December winter wheat futures markets were steady to 1/2 cent lower. Trading in the grain futures markets may be more subdued early today, ahead of the midday monthly USDA supply and demand report. Corn and soybean traders are expecting big U.S. production numbers from USDA today, with the bulls hoping that bumper U.S. corn and soybean crops are already factored into futures prices. Grain market bulls might be able to declare a small victory if futures prices by the close today are not in the red. The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are firmer and trading around $62.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.05 percent.
USDA monthly supply and demand report on deck… Look for potentially higher grain futures markets price volatility in the immediate aftermath of today’s USDA monthly supply and demand report, out at 11:00 a.m. CDT. According to a Reuters survey of analysts, the agency will estimate U.S. corn production at 16.516 billion bushels and an average yield of 186.2 bushels per acre. That compares to USDA’s August production estimate of 16.472 billion bushels and an average yield of 188.8 bushels an acre. The average of the analysts surveyed by Reuters shows a U.S. soybean production estimate of 4.271 billion bushels and an average yield of 53.3 bushels an acre in the September report, compared to the August USDA production estimate of 4.292 billion bushels and an average yield of 53.6 bushels an acre.
Conab raises Brazil soybean, corn production estimates… Brazil’s farmers harvested a record 171.47 million MT of soybeans and a record 139.67 million MT of corn in the 2024/2025 season, Brazilian crop agency Conab said on Thursday in its final grain production report covering the period and as reported by Reuters. The final numbers represent a 1.82 million MT increase in soybean production and a 2.67 million MT rise in total corn production compared to Conab’s August forecast. Conab also revised soybean area and yields for all seasons between 2020/21 and 2024/25, resulting in a cumulative increase of 13.12 million MT in estimated production during the period. Conab also raised Brazil’s soybean export forecast for the 2024/25 season, saying the country will ship 400,000 MT more than it expected last month, or 106.65 million MT. Brazil sells most of its soybeans to China and continues to book sales due to stalled trade talks between the U.S. and China halfway through the prime of the U.S. soybean marketing season.
U.S.-China to hold trade talks next week… U.S. Treasury Secretary Bessent will meet with Chinese Vice Premier He Lifeng in Madrid, Spain next week to discuss trade, economic and national security issues in another sign that talks between the two sides are making progress. The discussions next week will also cover TikTok’s status and efforts to combat money laundering, according to a schedule released by the Treasury Department on Thursday. The economic talks next week come as Washington and Beijing have engaged in communications this week, smoothing the path for a potential summit meeting between Chinese Premier Xi Jinping and President Trump.
Trump aide says India-U.S. trade deal close… The U.S. and India are close to resolving differences over a trade deal, according to Sergio Gor, President Trump’s pick for ambassador to India. Gor’s comments were made at a U.S. Senate confirmation hearing Thursday. India’s purchases of Russian oil remain a key point of tension in the relationship, with the U.S. demanding that India stop buying Russian oil. The U.S. is pressuring India to stop buying Russian oil, which is helping Russian President Putin finance his war in Ukraine, and has slapped India with tariffs as a penalty.
U.S. mortgage rates dropping… Mortgage rates in the U.S. this week have fallen by the most in a year, fueling a surge in refinancing demand, according to a Bloomberg report. The average for 30-year fixed loans was 6.35%, down from 6.5% last week, according to Freddie Mac. Falling rates will also boost home purchases, according to Kevin Peranio, a partner with Paramount Residential Mortgage Group. Borrowing costs have been trending lower for months and took another leg down after a disappointing jobs report last Friday increased the likelihood of more rate cuts from the Federal Reserve. By Monday, consumers were able to lock in 30-year rates at 6.27%, the lowest in almost a year, according to data from Texas-based Optimal Blue, a mortgage technology provider and as reported by Bloomberg. On Tuesday, as rates ticked up a bit, the volume of refinancing rate locks surged to the highest level for any single day since 2022, the company said.
Gold price this week surpassed 1980 high in inflation-adjusted terms… Gold this week hit an all-time high of $3,674.27 an ounce, basis spot prices. The spot price of gold has eclipsed its inflation-adjusted peak set on Jan. 21, 1980, when prices topped out at $850.00, which equates to about $3,590 in today’s dollars, according to one valuation method. “Gold’s rally has been driven by growing anxiety about the U.S. economic trajectory, with investors seeking a hedge against rising prices and weakening currencies, and its price could vault higher if equity markets start to creak, said a Bloomberg report.
Calm hurricane season--so far… There isn’t a storm in sight in the Atlantic hurricane season, despite it being the statistical peak. Pre-season forecasts called for more than the average of 14 hurricanes to form but so far there have been six storms, with only one reaching hurricane strength. Despite the current lull, late-season systems can unleash widespread devastation, and water temperatures in the Gulf of Mexico are reaching record highs, amplifying the risk of rapid intensification, according to a Bloomberg report.
Malaysian palm oil futures prices end the week down… Malaysian palm oil futures Friday fell below MYR 4,450 per MT, reversing the prior session’s gains as a stronger ringgit and expectations of peak output in September–October amid favorable weather weighed on sentiment. For the week, palm oil contracts were down 0.2% so far. Cargo surveyors reported that Malaysia’s palm oil shipments during September 1–10 dropped between 1.2% and 8.4% from the same period in August, underscoring weak export momentum. At the same time, industry data earlier this week showed end-August stocks rose 4.2% from July to 2.2 million MT, adding supply pressure.
Cattle futures bulls once again showing resilience… October live cattle Thursday rose $1.125 to $232.275. September feeder cattle gained $2.025 to $355.225. The live and feeder cattle futures bulls again Thursday worked to stabilize their markets following Tuesday’s downdraft. Bulls are making headway and price gains to end the week today would be an early clue the downside price corrections have ended and the cattle markets can at least trade sideways in the near term. Still, the bulls have a steep hill to climb, especially after another downbeat piece of U.S. economic data Thursday in the form of a surprisingly large gain in weekly jobless claims that may erode consumer confidence and in turn reduce demand for beef at the meat counter. There was more active cash cattle trading reported by USDA Thursday at midday, with steers averaging $238.98 and heifers averaging $238.28. USDA said last week’s cash cattle trade averaged $242.55, which compares to $243.60 the week prior.
Lean hog futures market bulls are rolling, but… Chart-based buying from the speculators has been featured in lean hog futures this week as prices continue to trend higher. However, the futures market is now short-term overbought, technically, and due for a corrective pullback soon. Also supporting hog futures late this week, there are ideas consumers may be less reluctant to buy beef at the meat counter this fall following some downbeat U.S. economic data this week, including Thursday’s weekly jobless claims report that showed a surprising rise in claims. The latest CME lean hog index is up 6 cents to $105.93. Today’s projected cash hog index is up 10 cents to $106.04. Thursday’s national direct 5-day rolling average cash hog price quote was $106.04.
USDA reports today—Friday
--Cotton: World Markets and Trade
--Grains: Markets and Trade
--Oilseeds; World Markets and Trade
--World Agricultural Production
--Livestock: World Markets and Trade
--Cotton Ginnings
--Peanut Prices
-- CFTC: Commitments of Traders