Good morning.
Grain and soy markets are higher to sharply higher coming out of what was a busy weekend on the US-China front, as representatives from both sides have indicated success on several of the items that were in discussion at the end of the week last week, including soybeans. We will get into details below, but notable so far in the last several hours of trade to start Monday is that one) a sizeable chart gap now exists on the November bean futures chart which is just days away from going into delivery; two) markets have stayed near their highs for almost the whole of the overnight session on relatively good volume; and three) despite the overall optimism, bean futures to this point have still not traded above their highs from earlier this summer. We would expect more choppy trade to emerge as the day goes on today and more details come out regarding the weekend happenings, but for now, it seems at least round one of this saga in US-China trade negotiations has been a success. Corn futures to start Monday morning trade are 7-8 cents higher, soybean futures are 18-24 cents higher, and the Chicago wheat market is 11-13 cents higher. Products are higher, soybean meal is up $3-4/ton and soybean oil is up 40-60 points. Outside markets are mixed, crude oil futures are down 10 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is down 10-15 points; the S&P500 is up 50 points, and the NASDAQ is up 310 points. All three of the stock index futures gapped to new all-time highs on the open last night. Gold futures are lower.
Obviously all kinds of headlines coming out of weekend talks between trade delegations from the US and China in Malaysia over the last couple days, but first as it pertains to agriculture, Treasury Secretary Bessent said on a Sunday news program that farmers “would feel very good about this season and upcoming season for several years” when Trump and Xi finalize plans later this week. Bessent added he expected the Chinese to resume “substantial” purchases of US soybeans for a number of years.
Other notable developments from the weekend talks included reports that Trump’s threats of 100% tariff increases on November 1st were now off the table, and also that Beijing had agreed to delay its new rare earth export restrictions for a year. The previously reached agreement on popular social media app TikTok will also be part of the framework agreement that is expected to be signed between the two presidents later this week. New port fee measures and fentanyl enforcement were also allegedly items that received significant attention during the talks.
Weekend trade headlines not regarding China included comments from Trump that he was moving towards finalizing trade deals with both Brazil and South Korea, and also news that agreements had been reached with Vietnam, Thailand, Cambodia, and Malaysia. On the other side of the fence, Trump also announced an immediate 10% increase on Canadian tariffs as part of the ongoing fallout from the fake Regan political ad that was aired last week.
We continue to reiterate that these estimates are very likely inaccurate, but it is estimated that managed money traders as of Friday are net-short somewhere around 96,000 contracts of corn, net-long somewhere around 26,000 contracts of soybeans, and net-short somewhere around 93,000 contracts of Chicago wheat. The last actual update from the CFTC came on September 26th.
A weekend press release from the Russian Ag Ministry showed forecasts for total grain exports in the 2025/26 season remained at 50 MMTs, which if accurate, would be down from the 53 MMTs of grain exported in the 2024/25 season. Other Russian grain news from the weekend included reports that the country would be raising its wheat export duty 70% to 167.7 rubles beginning on October 29th.
Analysts say drier weather across much Europe’s ag regions throughout the first part of October has led to good planting progress of winter grains, which should keep year-to-year acreage adjustments minimal. The favorable conditions come in contrast to the previous two seasons, where wet weather limited the seeding of additional area.
Following a slightly higher than expected inflation reading to end the week last week, traders, according to the CME’s FedWatch tool, still see the odds at another quarter-point rate cut at this week’s FOMC meeting at nearly 97%, signaling the small blip in the numbers last week wasn’t enough to get economists overly concerned. Following the meeting’s meeting on Wednesday, the big question will then become whether one more additional cut will then be seen at the Fed’s December meeting, which the odds currently also see a nearly 97% chance of happening.
It’s been a bit of a tale of two sides situation in the livestock markets in recent days, as volatility data from the CME Group shows implied volatility in feeder cattle and live cattle futures at their highest levels in the past year, while implied volatility in the hog market has, at the same time, fallen to its lowest level in the past year. The data reflects ongoing uncertainty and active hedging amid record high price levels in the cattle markets, while hog traders see more relative price stability following what has mostly been a year of adjustments in production and export flows.
In non-crop related news out of South America over the weekend, Argentine President Javier Milei scored a decisive midterm victory in Buenos Aires province, which allows him to preserve some powers in Congress and keeps his austerity and deregulation agenda in place. The outcome is not only a positive for Milei’s political standing in Argentina but is also a positive for relations between Argentina and the US, which Trump has recently said are almost entirely predicated on Milei remaining in office.
Satellite-based rainfall data from the last 72 hours shows mostly dry conditions across the US Midwest and most of the Corn Belt, while rains through the mid-south and south-central US totaled anywhere from 1-4″ generally speaking, with lighter amounts to the periphery and some locally heavier amounts through areas along the Gulf. Meanwhile, data from South America shows Argentina’s growing regions in the south and central parts of the country picked up anywhere from a few tenths to an inch, while areas further north saw a heavier 2-3″. Brazil saw up to 1.5″ through areas in the southwest, but other areas further north did not see any precipitation.
Forecasts for this week see this moisture mostly remaining in southern Brazil for the next several days, though it slowly starts to work north by the weekend and into next week, while Argentina will see several days of limited rainfall potential following the passage of a cold front this past weekend. The cool weather in Argentina is a more of a concern for the wheat crop than the dry spell is, with their being little in the way threats for the Brazil forecast on the whole through the first part of November,
US forecasts for this week feature additional rains in the southeast today into tomorrow, while models also see a frontal boundary providing precipitation potential to the northwestern part of the Corn Belt and parts of MO/IA/MN Tuesday into Wednesday. The northeast all the way up the East Coast looks to stay wet this week also, though there is a noticeable hole in the expected precipitation across IL/WI/IN/MI and the surrounding Great Lakes area, where moisture will continue to be mostly limited.
Have a great day.
Grain Comments: 10-27-2025
Good morning.
Grain and soy markets are higher to sharply higher coming out of what was a busy weekend on the US-China front, as representatives from both sides have indicated success on several of the items that were in discussion at the end of the week last week, including soybeans. We will get into details below, but notable so far in the last several hours of trade to start Monday is that one) a sizeable chart gap now exists on the November bean futures chart which is just days away from going into delivery; two) markets have stayed near their highs for almost the whole of the overnight session on relatively good volume; and three) despite the overall optimism, bean futures to this point have still not traded above their highs from earlier this summer. We would expect more choppy trade to emerge as the day goes on today and more details come out regarding the weekend happenings, but for now, it seems at least round one of this saga in US-China trade negotiations has been a success. Corn futures to start Monday morning trade are 7-8 cents higher, soybean futures are 18-24 cents higher, and the Chicago wheat market is 11-13 cents higher. Products are higher, soybean meal is up $3-4/ton and soybean oil is up 40-60 points. Outside markets are mixed, crude oil futures are down 10 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is down 10-15 points; the S&P500 is up 50 points, and the NASDAQ is up 310 points. All three of the stock index futures gapped to new all-time highs on the open last night. Gold futures are lower.
Obviously all kinds of headlines coming out of weekend talks between trade delegations from the US and China in Malaysia over the last couple days, but first as it pertains to agriculture, Treasury Secretary Bessent said on a Sunday news program that farmers “would feel very good about this season and upcoming season for several years” when Trump and Xi finalize plans later this week. Bessent added he expected the Chinese to resume “substantial” purchases of US soybeans for a number of years.
Other notable developments from the weekend talks included reports that Trump’s threats of 100% tariff increases on November 1st were now off the table, and also that Beijing had agreed to delay its new rare earth export restrictions for a year. The previously reached agreement on popular social media app TikTok will also be part of the framework agreement that is expected to be signed between the two presidents later this week. New port fee measures and fentanyl enforcement were also allegedly items that received significant attention during the talks.
Weekend trade headlines not regarding China included comments from Trump that he was moving towards finalizing trade deals with both Brazil and South Korea, and also news that agreements had been reached with Vietnam, Thailand, Cambodia, and Malaysia. On the other side of the fence, Trump also announced an immediate 10% increase on Canadian tariffs as part of the ongoing fallout from the fake Regan political ad that was aired last week.
We continue to reiterate that these estimates are very likely inaccurate, but it is estimated that managed money traders as of Friday are net-short somewhere around 96,000 contracts of corn, net-long somewhere around 26,000 contracts of soybeans, and net-short somewhere around 93,000 contracts of Chicago wheat. The last actual update from the CFTC came on September 26th.
A weekend press release from the Russian Ag Ministry showed forecasts for total grain exports in the 2025/26 season remained at 50 MMTs, which if accurate, would be down from the 53 MMTs of grain exported in the 2024/25 season. Other Russian grain news from the weekend included reports that the country would be raising its wheat export duty 70% to 167.7 rubles beginning on October 29th.
Analysts say drier weather across much Europe’s ag regions throughout the first part of October has led to good planting progress of winter grains, which should keep year-to-year acreage adjustments minimal. The favorable conditions come in contrast to the previous two seasons, where wet weather limited the seeding of additional area.
Following a slightly higher than expected inflation reading to end the week last week, traders, according to the CME’s FedWatch tool, still see the odds at another quarter-point rate cut at this week’s FOMC meeting at nearly 97%, signaling the small blip in the numbers last week wasn’t enough to get economists overly concerned. Following the meeting’s meeting on Wednesday, the big question will then become whether one more additional cut will then be seen at the Fed’s December meeting, which the odds currently also see a nearly 97% chance of happening.
It’s been a bit of a tale of two sides situation in the livestock markets in recent days, as volatility data from the CME Group shows implied volatility in feeder cattle and live cattle futures at their highest levels in the past year, while implied volatility in the hog market has, at the same time, fallen to its lowest level in the past year. The data reflects ongoing uncertainty and active hedging amid record high price levels in the cattle markets, while hog traders see more relative price stability following what has mostly been a year of adjustments in production and export flows.
In non-crop related news out of South America over the weekend, Argentine President Javier Milei scored a decisive midterm victory in Buenos Aires province, which allows him to preserve some powers in Congress and keeps his austerity and deregulation agenda in place. The outcome is not only a positive for Milei’s political standing in Argentina but is also a positive for relations between Argentina and the US, which Trump has recently said are almost entirely predicated on Milei remaining in office.
Satellite-based rainfall data from the last 72 hours shows mostly dry conditions across the US Midwest and most of the Corn Belt, while rains through the mid-south and south-central US totaled anywhere from 1-4″ generally speaking, with lighter amounts to the periphery and some locally heavier amounts through areas along the Gulf. Meanwhile, data from South America shows Argentina’s growing regions in the south and central parts of the country picked up anywhere from a few tenths to an inch, while areas further north saw a heavier 2-3″. Brazil saw up to 1.5″ through areas in the southwest, but other areas further north did not see any precipitation.
Forecasts for this week see this moisture mostly remaining in southern Brazil for the next several days, though it slowly starts to work north by the weekend and into next week, while Argentina will see several days of limited rainfall potential following the passage of a cold front this past weekend. The cool weather in Argentina is a more of a concern for the wheat crop than the dry spell is, with their being little in the way threats for the Brazil forecast on the whole through the first part of November,
US forecasts for this week feature additional rains in the southeast today into tomorrow, while models also see a frontal boundary providing precipitation potential to the northwestern part of the Corn Belt and parts of MO/IA/MN Tuesday into Wednesday. The northeast all the way up the East Coast looks to stay wet this week also, though there is a noticeable hole in the expected precipitation across IL/WI/IN/MI and the surrounding Great Lakes area, where moisture will continue to be mostly limited.
Have a great day.
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