Good morning!
Grain prices mixed overnight… As of 6:00 a.m. CDT, December corn was down 3/4 cent, November soybeans were down 4 cents, and December winter wheat futures markets were 3/4 to 1 1/4 cents higher. The corn market bulls on Tuesday again showed resilience to keep alive a price uptrend on the daily chart for December futures. Now, this week’s low will be critical for the bulls to defend to keep the price uptrend alive. Soybean bulls are sputtering as December meal futures overnight hit a seven-week low and are back down close to the contract low. Winter wheat futures showed short-covering strength Tuesday but now need to show important follow-through buying today or Thursday, to begin to suggest market bottoms are finally in place. The key outside markets today see the U.S. dollar index solidly up. Nymex crude oil prices are firmer and trading around $64.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.10 percent.
Thunderstorms continue today and Thursday in the central and eastern U.S. … The National Weather Service today said widespread thunderstorms will continue in the central to eastern U.S. the next couple of days. Today, storms can be expected from the Northeast and lower great lakes southwest through the Appalachians, Ohio/Tennessee valleys, the middle/lower Mississippi valley, and the southern Plains. The greatest chance for heavier downpours and potential repeated rounds of storms will be across the upper Ohio valley southwest into the central Tennessee valley, where there is a slight risk of excessive rainfall and the threat of scattered flash flooding. More isolated instances of flash flooding can be expected broadly from the Ohio valley southwest through the lower Mississippi valley and to the western Gulf Coast/portions of Texas. Then on Thursday the front continues eastward and the focus for storms will stretch from the Northeast south along the East Coast and through the Appalachians into the Southeast, as well as southern Texas.
Recent rains bolster soil moisture in U.S. wheat regions… World Weather Inc. said today that frequent rain so far this month in the central United States has bolstered soil moisture and slowed early season planting in U.S. wheat production areas. “However, the moisture has set the stage for aggressive seeding, germination and emergence over the next couple of weeks as drier weather evolves over the region.” Aggressive planting early this year is prescribed to get crops in the ground and established well prior to the possible influence of La Nina’s drier bias that may evolve later this season. The moisture is also supporting improved livestock grazing conditions, said the forecaster.
Argentina’s debt problems remain in marketplace focus… Argentina expects financial assistance in the form of accelerated funding from international lenders, including the World Bank and Inter-American Development Bank, according to a Bloomberg report. The U.S. this week made a public commitment to help Argentina, with Treasury Secretary Bessent saying the U.S. would do whatever it took to help Argentina. The pledged support may help stabilize the Argentine peso, which has slumped in recent weeks, “but it is unclear if it will be enough to placate the market or support President Javier Milei’s economic reforms,” said Bloomberg. The international lender assistance is “a far cry from the more substantial boost hinted at by the U.S. to reverse the peso’s major slump.” The World Bank and Inter-American Development Bank announced on Tuesday they will free up money that had already been promised to Argentina, or send it more quickly, so President Javier Milei could put it to work faster. On Tuesday, President Trump did offer help, sitting next to Milei on the sidelines of the United Nations General Assembly in New York. Trump added he did not think Argentina’s government required a bailout. Neither Trump or Bessent have detailed whether more aid is on the way, leaving open the question of whether the World Bank and IDB moves will be enough to placate the market. The Argentine peso rallied nearly 4% Tuesday, following a steep fall last week on fears Milei is losing traction with his economic turnaround plan.
Fed’s Powell: No risk-free paths ahead… Federal Reserve Chair Jerome Powell said in a speech Tuesday the outlooks for the U.S. labor market and inflation face risks, calling it a “challenging situation.” Powell said “near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation” and that “two-sided risks mean that there is no risk-free path.” Powell denied the central bank has acted politically in its policy decisions, saying “we’re looking at what’s the best thing for the people that we serve."Powell offered no hints on whether he might support a rate cut at the Fed’s next FOMC meeting in October.
India-U.S. trade talks resume, with India wanting to purchase U.S. energy… India wants to increase purchases of oil and gas from the U.S., according to Commerce Minister Piyush Goyal and as reported by Bloomberg. The U.S. imposed 50% tariffs on Indian exports partly to penalize India for continuing to buy Russian oil. Stepping up oil and gas imports from the U.S. would help reduce the trade imbalance between the two countries and bolster the trade negotiations. “We expect to increase our trade with the U.S. on energy products in the years to come,” Goyal said at an event in New York. “And being close friends, natural partners, our energy security goals will have a very high element of U.S. involvement.” Relations between New Delhi and Washington seemed to be back on track after Trump called Prime Minister Narendra Modi on his birthday. “But it ran into rough weather again after Washington slapped a $100,000 fee on new H-1B visa used mainly by Indian tech workers,” said Bloomberg.
U.S. working on trade deals with southeastern Asia countries… The U.S. expects to finalize trade deals with some southeast Asian countries within weeks, Bloomberg reports. U.S. Trade Representative Jamieson Greer said President Trump and himself are proud of the work done on these deals and expect to finalize agreements in the coming months or weeks. Negotiations for lower tariff rates and less onerous trade conditions with the U.S. are ongoing for many countries, with details of agreements yet to be finalized. Greer made his comments ahead of meetings with Association of Southeast Asian Nations economic ministers in Kuala Lumpur today.
Malaysian palm oil futures up a bit… Malaysian palm oil futures were slightly up today, near MYR 4,350 per MT, after a 2% decline in the Tuesday session to a six-week low. The recovery was supported by bargain hunting, a weaker ringgit, and firmer crude oil prices amid tightening global supply. Market sentiment also benefited from reports that the European Union will postpone enforcement of its anti-deforestation law for another year, delaying restrictions on palm oil imports. Meantime, palm oil may climb to exceed 5,000 ringgit a ton by year-end, according to respected veteran trader Dorab Mistry. Mistry said palm oil production has become flat, with productivity growth slipping to zero or even negative. If Indonesia raises the biofuel mix in diesel to 50%, Mistry said there will be shortages of palm oil and prices will rocket.
Cattle futures bulls remain in the driver’s seat… The live cattle futures market Tuesday saw some corrective selling and chart consolidation following Monday’s good gains. Feeder cattle futures saw decent follow-through buying strength following Monday’s near-limit gains. Live and feeder cattle futures markets are now in positions to challenge or even exceed their recent contract/record highs. The cattle markets are seeing sellers scarce this week, following last Friday’s bullish USDA cattle-on-feed report and the weekend news that a NWS case was found in Mexico and just 70 miles from the U.S. border. There has been no cash cattle trading activity reported by USDA so far this week. Last week’s cash cattle trading average price was $237.51. That compares to prior week’s cash cattle trade averaged $239.33.
Lean hog futures prices continue to push higher… October lean hogs on Tuesday hit another contract high. The hog futures market has been boosted in part by the strong cattle futures markets and a rebound this week in fresh pork prices. Technical buying has been featured as lean hogs remain in a solid price uptrend on the daily bar chart, with no strong chart clues of a market top being close at hand. The latest CME lean hog index is down 36 cents at $104.98. Today’s projected cash hog index is down another 8 cents at $104.90. Tuesday’s national direct 5-day rolling average cash hog price quote was $105.86. Hog traders are awaiting Thursday’s USDA hogs and pigs report.
USDA reports today—Wednesday
--Broiler hatchery