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USDA’s crop production and world supply and demand reports will be center stage for the grain markets Friday, but before that global financial markets will take their cues from the August consumer price index due at 7:30 a.m. CT.
It comes as oil futures are surging, with both Brent and West Texas Intermediate crude pushing back above $100 a barrel, further stoking fears of resurgent inflation. Those fears are part of the reason why Treasury yields are soaring. Meanwhile, traders have upped bets on a rate hike by the Federal Reserve next week, with fed funds futures pricing in a 71.3% probability of a quarter-point increase, up from just under 50% a week ago.
That also has implications for the U.S. dollar, which affects how attractive dollar-priced commodities are to foreign buyers.
Producer prices rose 0.4% in August, the Labor Department said Thursday, after being largely flat the previous two months. The rise reflected, in part, surging energy and commodity prices. The year over year rate accelerated to 5.4% from 4.8%. Economists surveyed by the Wall Street Journal, on average, look for August CPI to rise 0.4% after a 0.1% increase in July, while the year-over-year rate is expected to be steady at 3.4%. The core rate, which strips out food and energy costs, is seen rising 0.2%, for a 2.4% year-over-year rise, down from 2.5% in July.
- Bond jitters: It’s the bond market that is the biggest worry. The Treasury Department beefed up a buyback program this week in an effort to bring down long-term yields (yields and Treasury prices move opposite each other). Instead, yields jumped because investors were disappointed that the $6 billion in planned repurchases wasn’t even bigger. In the end on Thursday, Treasury bought back just over $5 billion. Some bond market mavens fear that if the Fed doesn’t deliver a hike next week, the Treasury selloff could turn into a deeper rout, sending yields soaring on ideas the central bank has fallen behind the curve. Chaos in the Treasury market is never good, with investors typically fleeing to safety and dumping assets perceived as risky, while a dysfunctional bond market can lead to concerns about financial stability. The market isn’t there yet, but pressure is mounting.
Read: What to expect from USDA’s September Crop Report on Friday
Market recap: Position-squaring ahead of Friday’s USDA reports, more daily export news and surging crude and diesel prices helped the grain futures to gains Thursday. But the big overnight headline came from a report that China has purchased 1 million MT of soybeans this week.
- November soybeans rose 22 ¾ cents to $13.32 ¼ – a contract and 2.5 year high
- December corn rose 6 cents to $5.33 ¾
- December SRW wheat rose 12 ½ cents to $7.41 ¼
- December HRW wheat gained 12 ½ cents to $8.18 3/4
- December spring wheat gained 14 ½ cents to $7.625
- December cotton futures rose 94 points to 88.22 cents.
- October live cattle rose $1.975 to $217.825, near the daily high and hit a three-week high. November feeder cattle rose $1.425 to $322.775, nearer the daily high and hit a four-week high.
- October lean hog futures rose $0.075 to $83.15
Lawmakers seek sulfur relief: Soaring sulfur prices of sulfur are adding to inflation pressures faced by U.S. farmers and putting U.S. food security at risk, Rep. Scott Franklin and other Florida Republicans told President Donald Trump in a letter dated Sept. 9, Agri-Pulse reported. The letter said that global shipping disruptions have tightened supplies of the main component in phosphate fertilizers, pushing prices to historic levels. As a result, some U.S. phosphate producers have idled operations, according to the letter, which was sent to Trump and Commerce Secretary Howard Lutnick.
“American workers will soon face layoffs because of sulfur availability and affordability,” the lawmakers said. They urged that all available lawful measures be considered to increase availability of sulfur for domestic fertilizer production. Potential options include authority under the Defense Production Act; voluntary coordination with U.S. refiners and sulfur marketers; trade tools; and reaching out to suppliers,the report said. House members also suggested the appointment of a senior administration official to serve as a liaison with Congress on the issue.
Saudi oil output falls to lowest this year: Saudi Arabia’s oil production fell to 6.2 million barrels in August, the country told OPEC – its lowest figure of 2026 and down 23% from July, the Financial Times noted. The fall comes after Iran-backed Houthi rebels threatened shipments from the kingdom’s west coast. The rebels announced a “maritime embargo” against Saudi ports at the end of July, the report noted. Saudi Arabia has limited capacity to store oil, forcing it to reduce output.