Check our advice monitor at ProFarmer.com for our marketing plan.
Oil futures, diesel prices and interest rates all moved higher Tuesday, while the Federal Reserve began a two-day policy meeting that’s widely expected to conclude with a rate hike.
The closure of a crucial Saudi pipeline that had been a valuable detour around the Strait of Hormuz continues to exert upside pressure on crude oil and product prices. Meanwhile, Russia and Ukraine continued to attack each other’s energy infrastructure, despite President Donald Trump’s declaration on Monday that both sides had agreed to an energy truce. Speculation the U.S. could move to ban exports of diesel fuel is mounting, a move that analysts warn could have mixed results.
Nearby West Texas Intermediate crude futures, the U.S. benchmark, rose 4.4% to $105.38 a barrel, while Brent crude futures jumped 2.9% to $108.75 a barrel – the highest closes for both grades since May 19, according to Dow Jones Market Data. U.S. retail diesel prices rose to a fresh record high around $6.27 a gallon Tuesday, according to the AAA. Diesel futures traded on the New York Mercantile Exchange rose 6.1% to a record high $5.262 a gallon.
Surging fuel prices and expectations they will feed through to other prices are seen pushing the Fed toward delivering a hike of 25 basis points, or a quarter of a percentage point. A hike could set Trump and new Fed Chairman Kevin Warsh on a collision course. Trump has resumed calls for lower interest rates, recently threatening to halt all trade with countries that run a trade surplus with the U.S. if the Fed refused to comply.
A rate hike is increasingly seen as necessary by bond-market participants to establish Warsh’s inflation-fighting credibility, which means that, despite Trump’s calls for cuts, a rate hike could diminish upside pressure on long-term bond yields. Failure to follow through with a hike and a sufficiently tough anti-inflation message could see long-term yields accelerate their push higher as investors seek more compensation for potential long-term inflation.
Market recap: The soy complex rally got revived Tuesday, with soybean meal stealing the show with the December contract surging $9.20 to $365.40, hitting a 2 ½-year high.
- November soybeans rose 14 ½ cents to $13.17 ¾ after finding support below the $13 level. December soybean oil rose 16 points to 70.35 cents.
- December corn rose 2 ½ cent to $5.53 ¾.
- December soft red winter wheat rose 6 ½ cents to $7.28 ½, as the wheat complex rebounded after recent selling pressure.
- December cotton fell 7 points to 84.48 cents, hitting a four-week low.
- October live cattle fell $1.55 to $220.70, after hitting a four-week high early on. November feeder cattle lost $3.875 to $328.90, after seeing a five-week high early on.
- October lean hog futures fell 52.5 cents to end at $79.075, hitting a 15-month low.
Farm bill’s next steps: Senate Agriculture Committee Chairman John Boozman, R-Ark., said the panel will meet Wednesday afternoon to resume consideration of a proposed farm bill, Agri-Pulse reported. The announcement comes after Sen. Mitch McConnell, R-Ky., returned to Capitol Hill after being out since June following a fall. McConnell’s presence on Wednesday would mean Republicans would be able to muster a majority in favor of the bill in the event of a party-line vote. The bill failed to advance out of committee in August.
Conab updates Brazil crop estimates: Conab forecast Brazil’s 2025-26 soybean crop at 180.4 million tons (MT), up 5.2% year over year, with soybean exports expected to hit a record 116.2 MT, according to UkrAgroConsult. Corn production was pegged at 144 MT, up 2% from the previous season. The second, or safrinha, corn corp is seen at 112.1 MT, just 1% below the previous record.
Bessent to meet with top China official: Treasury Secretary Scott Bessent confirmed Tuesday he will meet with Chinese Vice Premier He Lifeng this weekend for final preparatory talks ahead of Chinese President Xi Jinping’s visit to Washington later this month for a summit meeting with President Trump.
- “With China, we have had some very good private discussions, and I look forward to those continuing this weekend when I meet my Chinese counterpart Vice [Premier] He Lifeng,” Bessent said during a House Financial Services Committee hearing, the South China Morning Post noted.
Soybean futures have been underpinned by steady Chinese purchases the past several weeks – a move widely seen as a good will gesture ahead of the meeting. U.S. Trade Representative Jamieson Greer said earlier this month that both countries would make “some announcements on agriculture and non-tariff barriers” during the summit, without providing specifics.
UN accepts Trump nominee to lead World Food Program: United Nations Secretary-General accepted Trump nominee Luke Lindberg to head the World Food Program, Reuters reported, citing a document and confirmation from a U.N. official. The World Food Programme, established as a joint project of the U.N. and the FAO, is aimed at providing an emergency response to global food shortages and has traditionally led by an American.
Swine finishing costs: In a farmdoc daily paper, Michael Langemeier, professor of agricultural economics at Purdue, examines how rising corn prices impact swine finishing feed costs through 2027. Early September 2026 corn futures signal higher prices, with the December 2026 contract median expected at $5.33 per bushel and the July 2027 contract at $5.50 per bushel.
After averaging a swine finishing feed cost index of 101.5 for early 2026, costs are projected to rise to 103.8 for the full year 2026 and surge by 9.7% to 113.9 in 2027. Regression analysis reveals that each $0.10 per bushel increase in corn prices adds $0.43 per cwt. to feed costs, while each $10 per ton increase in soybean meal adds $0.37 per cwt, Langemeier wrote. Depending on market fluctuations, estimated feed costs for spring and summer 2027 range from $35.44 to $43.43 per cwt., making 2027 feed costs roughly 5% to 15% higher than 2026, he concluded.
BASF moves toward ag spinoff: BASF is taking another step toward potentially spinning off its Agricultural Solutions business as a standalone public company, reports AgWeb’s Rhonda Brooks, citing a company news release.
The company has selected Citi, Deutsche Bank, Goldman Sachs and J.P. Morgan as global coordinators to help prepare Agricultural Solutions for a potential initial public offering (IPO) on the Frankfurt Stock Exchange. BASF is targeting mid-2027 to have the business ready for an IPO. However, BASF has not yet made a final decision to move forward with the offering. Whether and when an IPO takes place will depend on several factors, including conditions in the capital markets.