Good morning!
Grain futures higher overnight ahead of WASDE… At 6:00 a.m. CDT, December corn was up 4 3/4 cents. November soybeans were 5 3/4 cents higher. September soybean meal was up $2.70. September bean oil was 3 points lower. September SRW wheat was up 22 1/4 cents and September HRW wheat prices were 27 cents higher. Wheat prices rallied overnight on reports major Ukrainian drone attacks halted operations at grain terminals in Novorossiysk, Russia’s leading Black Sea wheat-export port. (See item below.) The highly anticipated USDA monthly supply and demand and crop production reports for August are out later this morning. Analysts surveyed by Reuters, on average, look for USDA to report a U.S. corn yield of 182.4 bushels per acre, down from the trendline 183-bushel estimate the government plugged into its July report and well below the record 186.5 bushels seen last year. The U.S. soybean yield is seen at 52.9 bushels an acre, just a shade below the trendline 53 bushels used by USDA last month and matching last year’s figure. Analysts peg corn production at 15.934 billion bushels versus USDA’s July estimate of 16 billion, down from last year’s 17.021 billion bushels. Soybean production is seen at 4.472 billion bushels, down a shade from the 4.475 billion bushels USDA penciled in last month and up from the 4.262 billion bushels produced last year. The key outside markets today see the U.S. dollar index near steady. September Nymex WTI crude oil prices are slightly higher and trading around $83.50 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.66%.
Major Ukraine drone strikes on Russia’s Black Sea grain terminals… Three grain terminals in Russia’s Black Sea port of Novorossiysk were damaged in a massive overnight drone attack, as Ukraine escalated strikes on key maritime infrastructure, said a Bloomberg report. “A loading gallery at United Grain Co.’s Novorossiysk Grain Plant crashed to the ground after the strikes, people familiar with the matter said. The gallery and truck unloading facility at Novorossiysk Grain Terminal, owned by Demetra, was also damaged, the people said, asking not to be identified discussing confidential information. The KSK grain terminal was also hit, the people said,” Bloomberg reported. “Russia and Ukraine have stepped up attacks on each other’s commercial ships and ports in the Black Sea, raising concerns about supplies and sending wheat prices to a two-year high in July. The two nations account for more than a quarter of global wheat exports, and the attacks come as farmers are in the middle of this year’s harvest. Representatives of KSK and Demetra-owned NZT declined to comment when contacted by Bloomberg News. United Grain Co.’s NKHP didn’t immediately respond to requests for comment. Satellite images from NASA’s Fire Information for Resource Management System showed heat anomalies — likely indicating fires — in Novorossiysk, home to major oil and grain terminals and a naval base. Local officials said Novorossiysk and the whole of the surrounding Krasnodar region were targeted by several hundred Ukrainian drones overnight,” said the report.
China’s pledge to purchase more U.S. soybeans complicated by lack of private buyer interest… China’s drive to buy large volumes of US soybeans — a commitment under last year’s trade truce — risks being complicated by a lack of participation from the country’s private traders, according to a Bloomberg report. “Purchases of soybeans have accelerated in recent weeks, ahead of an expected September summit between President Xi Jinping and President Donald Trump. But the buying splurge is being spearheaded by China’s giant state—owned agricultural traders, with the private sector largely sitting on the sidelines because the trade isn’t commercially viable,” said the report. China’s pledge to buy U.S. agricultural products, including soybeans, was a key plank of the trade truce struck by Xi and Trump last October to end an escalating dispute threatening the world’s top two economies. Progress on that agreement will be reviewed at their planned talks in Washington next month. “While the lack of private participation in soybean purchasing doesn’t mean China can’t meet a 25-million-ton annual target outlined by the White House, it makes for a trickier task given limited storage and crushing capacity in the state supply chain, traders said. Private crushers are largely waiting and playing by ear, and soybean meal supplies could tighten up domestically in the fourth quarter if more U.S. soybean supplies aren’t readily available, said Liu Haowen, analyst with Wuchan Zhongda Futures Co. Ltd. State-owned Chinese firms booked another flurry of U.S. soybean cargoes last week, bringing total purchases for the 2026-27 season to about 6 million tons,” said the report.
Trump claims total control over Hormuz… President Trump on Tuesday claimed the U.S. had “total control over the Hormuz Strait,” according to a Bloomberg report, as Washington and Tehran hardened their positions in deadlocked negotiations over the critical waterway. “We own it,” Trump told reporters at Joint Base Andrews outside Washington late Tuesday, an assertion Iran has dispelled via intermittent attacks on ships transiting the passage. “At some point, maybe they’ll do something, and then they get blown away.” Trump has oscillated for months between threatening to resume attacks on Iran and expressing confidence that talks to bring an end to America’s war with the Islamic Republic are progressing. His latest comments came after Pakistan’s defense minister, Khawaja Asif, told Bloomberg in Islamabad that the two sides are “close to some sort of arrangement” over Hormuz, a key sticking point.
Oppressive heat continues in southern Plains, Southeast … The National Weather Service today said oppressive heat will continue from the central Plains to the Southeast this week as an intense heat dome originating from the Southwest builds over the next few days. Many areas will see their hottest temperatures of the year so far as temperatures climb into the upper 90s and triple digits, leading to heat indices of 105 to 115 degrees when combined with the high humidity in place. Along the northern fringe of the heat, a wavy stationary front in the nation’s midsection will be the focus for daily showers and thunderstorms capable of widely scattered flash flooding and severe weather from the High Plains to the Ohio Valley. Over the West, a cooling trend is still on deck for much of the region beginning today, when many areas will see below normal highs for the first time in several days.
Key U.S. inflation report out this morning… The Labor Department will release the July U.S. consumer price index at 7:30 a.m. CDT. A dismal July jobs report released last Friday dented expectations for a Federal Reserve rate hike in September, but likely wasn’t the last word. Much will depend on whether the July CPI reading affirms the slowdown in inflation seen in June. Economists surveyed by the Wall Street Journal, on average, look for CPI to post a monthly rise of 0.1% in July after seeing its first monthly drop in six years in June. The year-over-year rate is expected to slow to 3.4% from 3.5%. Traders will pay more attention to the core rate, which strips out volatile food and energy prices. Core CPI is expected to show a 0.2% rise in July, with the year-over-year rate slowing to 2.5% from 2.6%. The problem is that core inflation, whether measured by the CPI or the Fed’s preferred PCE gauge, continues to run above the central bank’s 2% annual target.
Global oil supplies rapidly dwindling: IEA… Global oil inventories will tumble this quarter at more than twice the rate previously estimated as the Iran war flares again, even as the hit to demand from high prices deepens, the International Energy Agency said and as reported by Bloomberg. Oil markets face a shortfall of 1.8 million barrels a day as “renewed hostilities and maritime disruptions” undermine a production recovery, the IEA said in its monthly report. For 2026 as a whole, the deficit will likely be the widest in five years. Stockpiles are tightening again even as elevated fuel prices prompt the agency to deepen estimates for this year’s decline in global oil demand by almost 50% to 1.6 million barrels a day. That’s the biggest slump in annual average terms since the 2020 Covid pandemic. While a brief ceasefire between the U.S. and Iran in mid-June revived oil exports from the Persian Gulf, shipping and regional energy infrastructure are once again under fire. That’s pushing up the cost of fuels such as gasoline and diesel — the workhorse of the global economy — and squeezing consumers. U.S. Energy Secretary Chris Wright said Tuesday that 9 million barrels a day has escaped in the past week, almost half prewar volumes. The world’s depleted inventories ought to be replenished next year after oil markets tip back into oversupply, according to the Paris-based IEA.
USDA recalls Argentine beef imports into Texas, Florida… Nearly 30,000 pounds of Argentine beef that wasn’t fully inspected before being distributed in Texas and Florida are being recalled, the US Department of Agriculture said and as reported by Bloomberg. The USDA’s Food Safety and Inspection Service announced that Florida-based Corte Argentino LLC was recalling several cuts of beef that missed a “reinspection” step when they entered the U.S. No illness or injuries have been linked to the imports, but the USDA is concerned that some of the cuts may already be in fridges or freezers, and urged consumers to throw them out. The meat was produced in May and has September freeze-by dates. The USDA didn’t say how the batch had slipped through the import reinspection process. The recall comes not long after the U.S. expanded its annual tariff-free beef import quota from Argentina to 100,000 tons from 20,000 to help tackle inflation — part of a broader trade agreement that has yet to be fully ratified.
Total New World screwworm cases detected in U.S. remain at 45… The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is still reporting 45 total New World screwworm detected cases in the U.S. There are now three active cases, all in Texas.
Malaysian palm oil futures prices pull back… Malaysian palm oil futures eased Wednesday, slipping below MYR 4,720 per MT as profit-taking set in after a two-week high. Losses tracked declines in edible oils on the Dalian exchange and were compounded by signs of ample supply: July inventories rose 3.32% to 2.63 million MT, while output surged 9.41% to 1.79 million MT. Softer Chinese inflation data underscored weak demand in the world’s top edible oil importer, further weighing on sentiment. Still, downside was cushioned by a weaker ringgit and firmer soyoil prices on the Chicago exchange. In top buyer India, festive-season demand expectations lent support after July imports hit a ten-month peak. Export prospects brightened as cargo surveyors estimated shipments rose between 2.6% and 14.8% in the first ten days of August. Meanwhile, stronger crude oil prices added a tailwind, with Middle East supply concerns, heightened by attacks on two ships and uncertainty over a U.S.–Iran peace deal, bolstering the broader commodity complex.
Cattle futures markets still in near-term price uptrends… October live cattle on Tuesday fell $0.575 to $226.325. September feeder cattle rose $0.675 to $345.25. October live cattle and September feeder futures today saw more short covering and some perceived value-buying early in the session, but gains faded in feeders and were lost in live cattle by the close. Both markets remain in price uptrends on the daily bar charts. Higher cash cattle trading that occurred last week did limit selling interest in futures prices Tuesday. USDA at midday reported very light cash cattle taking place so far this week at $235.00. The agency on Monday reported cash trading last week took place at an average price of $235.21. The week prior’s average cash trading price was $233.06. In the southern Plains states, livestock heat stress will prevail during much of the next two weeks, making weight gains a challenge.
Lean hog futures see more technical selling… October lean hog futures on Tuesday fell $0.35 to $83.325. The lean hog futures market saw mild technical selling pressure as the October contract remains in a price downtrend on the daily bar chart. The cash hog market is still trending down, to keep the bears in control. The latest CME lean hog index down 21 cents to $96.09. Today’s projected CME index price is down 15 cents at $95.94. The national direct five-day rolling average cash hog price quote for Tuesday was $97.80.