Good morning!

Grain futures prices weaker overnight… As of 6:00 a.m. CDT, December corn was down a penny, November soybeans down 8 cents and December HRW and SRW wheat futures markets were 1 to 1 3/4 cents lower. Grain markets, especially soybeans, are seeing some selling pressure following the overnight news China is slapping duties on U.S. ships coming into its ports and may sanction a U.S. chipmaker. (See item below) If the selling in grain futures persists into the day session today, then the markets are headed for technically bearish weekly low closes that would likely energize the speculative bears early next week. The key outside markets today see the U.S. dollar index weaker on a downside correction from this week’s good gains. Nymex crude oil prices are lower and trading around $60.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.14 percent.

Trump says China will resume buying U.S. soybeans… President Trump on Thursday predicted China would resume purchases of U.S. soybeans after meeting President Xi Jinping later this month, though USDA Secretary Brooke Rollins said federal relief for U.S. farmers will have to wait until the U.S. government reopens. Trump said the pressure he would bring on the Chinese president during their planned sit-down later this month would end Beijing’s months-long moratorium on U.S. soybean buys. “What happens with soybeans is we’re going to see more and more, I think, opening up,” Trump told reporters at the White House and as reported by Bloomberg. “He’s got things that he wants to discuss with me, and I have things that I want to discuss with him. And one of the things is soybeans.” The Trump administration for weeks has said there is a forthcoming aid program for farmers as a way to provide temporary assistance until market conditions improve. However, Rollins signaled that a package won’t be announced as long as the government funding lapse continues. “We’ve got to get the government reopened so that we can move forward on that, and once we do, we’ll be able to move out a significant program to help our farmers long term,” she said during a cabinet meeting at the White House.

However, U.S.-China trade tensions heating up… China will start levying special fees on U.S. ships docking at its ports, starting Oct. 14, in retaliation to a U.S. plan to charge port fees on Chinese ships. China’s fees on U.S. vessels will be 400 Chinese yuan ($56.00) per MT, increasing each year to reach 1,120 yuan by April 2028, according to a Ministry of Transport release and reported by Bloomberg. China’s move is in response to the U.S. plan to start charging port fees on Chinese-built, -operated, or -owned ships, which Beijing says seriously violated the principles of international trade and the U.S. and China Maritime Agreement. Meantime, China’s State Administration for Market Regulation (SAMR) has just opened an antitrust investigation of U.S. company Qualcomm Inc.’s acquisition of Autotalks, the regulator said on Friday. The U.S. chipmaker announced the takeover in June. SAMR will look into whether Qualcomm’s acquisition was in breach of China’s anti-monopoly law, according to the statement. Qualcomm’s shares fell 4% in pre-market trading in New York after the announcement. President Trump and Chinese leader Xi Jinping are scheduled to meet later this month. ”Taken together, the latest moves suggest both sides are lining up bargaining chips ahead of a leaders’ meeting this month on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea” said Bloomberg.

U.S. Labor Department calls back staff to prepare inflation report… The Bureau of Labor Statistics has recalled staff to prepare a key inflation report necessary to calculate the size of next year’s Social Security checks. The agency was directed by the White House Office of Management and Budget to bring back employees to assemble the September consumer price index report in time for publication by the end of this month. The Social Security Administration uses third-quarter CPI data to determine the annual cost-of-living adjustment for recipients for the following year. The CPI report may come out in time for the Federal Reserve’s Oct. 28-29 FOMC policy meeting. Investors expect officials to cut interest rates again, but several policymakers have expressed hesitancy in doing so given inflation is still running well above their target. The U.S. government shutdown has entered its second week, with no signs of a compromise between Republicans and Democrats that would reopen the government. It appears lawmakers won’t take up a vote on the matter until next week, at the earliest.

U.S. throws $20 billion lifeline to Argentina… The U.S. is offering $20 billion in financing to stabilize Argentina’s economy and has carried out a rare intervention in currency markets to prop up the Argentine peso. The U.S. Treasury has finalized a $20 billion currency swap framework with Argentina’s central bank and directly purchased pesos to help stabilize the exchange rate. “The goal of the U.S. intervention is to help President Javier Milei notch a win in upcoming midterm elections and calm markets unsettled by fears of his leftist rivals returning to power,” said a Bloomberg report.

U.S. dollar index set for its best week in a year… The U.S. dollar index today is on track to rise nearly 2% for the week, marking its strongest weekly advance in a year, supported by sharp weakness in the Japanese yen and Euro currency. The yen is poised to drop almost 4% against the dollar this week after fiscal dove Sanae Takaichi won Japan’s leadership race, reinforcing expectations of higher spending and loose monetary policy. Meanwhile, the Euro has fallen about 1.5% versus the dollar index amid political turmoil in France, where President Emmanuel Macron continues to search for his sixth prime minister in less than two years. TradingEconomics.com

Malaysian palm oil futures show solid weekly gains… Malaysian palm oil futures on Friday edged lower to below MYR 4,600 per MT, snapping a three-session winning streak as markets reacted to monthly data from the Malaysian Palm Oil Board. End-of-September stocks rose 7.2% from the prior month to a near two-year high of 2.36 million metric tons, while exports grew 7.69% to 1.43 million MT. In India, the world’s largest consumer, demand in October is expected to fall below 600,000 tons as festive buying peaks, after sinking nearly 16% in September. A further decline in crude oil prices and a prolonged U.S. government closure, now in its ninth day, also weighed on sentiment. Still, palm oil is set for a second straight weekly gain, up about 3%.

Feeder cattle futures on fire… November feeder cattle Thursday rose $5.225 to $374.05 and hit another contract/record high. Gains in feeders also prompted more modest gains in the live cattle futures Thursday. Historically tight supplies of cattle in the U.S. continue to drive upside price action in futures, despite some weakening in the cash cattle and beef markets the past couple weeks, although boxed beef prices have rebounded this week. USDA Thursday at midday reported very light cash cattle trade taking place at an average of $230.64 for steers and $228.00 for heifers. Cash cattle trading last week averaged $230.76. That’s down $1.89 from the prior week’s average.

Lean hog futures hit by more profit taking, weak long liquidation from speculators… December lean hog futures Thursday fell $1.75 to $84.35 and hit a six-week-low. Hog futures saw technical selling pressure as the near-term chart posture for the market continues to deteriorate. Cash hog and pork market fundamentals are also eroding. The latest CME lean hog index is down 72 cents at $100.70. Today’s projected cash hog index is down another 62 cents at $100.08. Thursday’s national direct 5-day rolling average cash hog price quote was $97.84.