Written Commentary
SOYBEANS
The bean market bounced back from post-report weakness late Friday but failed to follow through overnight, and the fundamentals and technicals lean weaker, in our opinion. The report offered nothing for the bulls beyond tighter bean oil supplies, but strength in meal on Friday gave beans a late boost. The harvest is speeding ahead over the weekend in areas west of the Mississippi River means plenty of beans are available for crushers, and meal tightness should begin to ease. Rains from the southern Plains into the lower Midwest will be seen this week, but a much drier trend moves in for all of the crop areas in the 6 to 10-day period.
SOYBEAN MEAL
Soybeans finished near the highs of the week on Friday, and its strength after the USDA report Friday morning lifted meal up off the initial post-report break. Cash meal tightness remains supportive, but those fears may ease as harvest speeds up, bean basis bids pull back, and processors have plenty of beans to throttle up through the fall. It’s a bit early to tell bean quality and how it compares to previous years.
CORN
A steady start for corn after the severe break on Friday, even touching limit-down after the significantly bearish report data. USDA bumped yields higher than expected, raising ending stocks to near the highest estimate and squashing ideas that the crop is struggling with recent weather. Carry-in jumped by 400 million bushels, and many are scratching their heads over the sharp increase in Nebraska yields, up 11 BPA from last month. Field reports suggest the increase may be overstated, but that’s what we have to work with.
WHEAT
The USDA report on wheat was slightly bearish on the higher US carryout, but a notably sharp break in corn amplified Friday’s weakness. USDA decreased harvested acres but increased wheat yield. Good planting conditions prevailed across the Plains over the weekend, and rains in the southern Plains are expected this week, ideal for early crop development. A drier trend will move in next week.
CATTLE
The cattle complex finished out last week on a very strong note, with December live cattle closing at a one-month high. Sharp weakness in feedgrains was a friendly factor, but technicals have been suggesting an upside breakout was coming. Daily trading volume was above average, and open interest rose more than 1,700 contracts, all signs of a strong breakout. The bulls have the clear edge.
HOGS
The week ended with a tough finish for the market on Friday, closing at new contract lows in December as a weak technical trend and weak cash index values kept the market under pressure. Open interest rose nearly 1,800 contracts on the break.
MILK CLASS III
November Class III milk finished last week with a sizable gain after reaching a 3-week high on Friday.
CRUDE OIL
December Crude Oil was lower early Tuesday but was inside the upper half of Monday’s range. The escalation of violence in the Middle East over the past week has undercut ideas that Iran and the Houthi’s ability to interrupt Mideast oil exports had been marginalized President Trump’s announcement of an energy cease-fire between Russian and Ukraine over the weekend has been undermined by reports of Russian attacks that the Ukrainian president claimed had hit six energy targets.
NATURAL GAS
December Natural Gas was near unchanged early Tuesday, as it continued to consolidate its gains from earlier this month. The drop in US production this month marks a significant change from recent trends and is likely the primary supportive factor for prices. LSEG estimates average gas output in the US Lower 48 states at 110.7 billion cubic feet per day so far in October, down from a record 113.3 bcfd in September. Output was on track to drop to a four-month low of around 108.9 bcfd on Monday due in part to shutdowns at offshore drilling facilities in the Gulf from Hurricane Isais, but keep in mind that the Gulf only represents about 2% of US production. Seasonally colder weather is coming, which should eventually boost demand.
DOLLAR INDEX
The USD index fell 0.34% to 102.24 as oil prices eased. Prospects for additional Russian diesel supplies and hopes that geopolitical tensions remain contained before the US midterm elections are reducing some energy-driven support. Wednesday’s CPI report is the principal catalyst, but the threshold for changing October policy expectations appears high.
PRECIOUS METALS
December gold are modestly higher, rising around 0.22% overnight to $4,200 as the dollar fell sharply and as treasury yields moved lower, though the front end of the curve was little changed. Mainly, the market is awaiting tomorrow’s CPI and Thursday’s PPI and retail sales, which will shape near-term direction of yields and the dollar, consequently shaping the environment for gold. Oil prices are offering some support today, though the bid on gold is modest, reinforcing that the market is largely on the sidelines ahead of tomorrow’s data.
December silver contracts are down 0.50% to $60.21.
Copper prices held steady overnight as mine supply concerns continued to offer support to prices. LME copper was little changed at $14,624, while US prices were little changed at $6.75. Chilean miner Codelco announced a partial suspension at their El Teniente mine after a landslide killed two workers on Sunday; workers at Antofagasta’s Centinela copper mine continued to strike as unions were set to resume talks on Tuesday. Copper mine disruptions for 2025-26 amount to 350,000-400,000 tons per year of contained copper, which equates to only 30%-50% of published disruption allowances.
EQUITIES
Equity index futures are mixed as renewed concerns about the AI trade weigh on technology, while the Dow advances ahead of major bank earnings. The weakness follows a sharp selloff in Asian semiconductor shares amid concerns about Chinese competition. South Korea’s Kospi fell 5.5% by the close after deeper intraday losses, with Samsung Electronics and SK Hynix among the hardest-hit stocks. The pressure has carried into US semiconductor shares, renewing questions about valuations and the durability of the AI-driven rally.
INTEREST RATES
Yields fell across the curve in a flattening move as the bond market resumed trading following Monday’s holiday, supported by lower oil prices and defensive demand amid the technology selloff. The 10-year yield is near 5.19%, approximately 5 bps below Friday’s close, while the two-year is around 4.78%. The two-year/10-year spread has narrowed to roughly 41 bps from 44 bps, representing a modest bull flattening. Markets assign an 81% probability to unchanged Fed policy this month.
COCOA
December Cocoa was high early Tuesday, taking out last week’s high and reaching its highest level since September 17. A lack of adequate rainfall in west Africa, particularly Ivory Coast and southwestern Ghana, suggests that the concerns about El Nino and its potential effect on production are being validated. Ivory Coast farmers told Reuters that rains were well below average last week and that they were worried about the size and the quality of the latter half of the main crop.
COFFEE
December Coffee edged higher early Tuesday after falling to their lowest level since October 1 on Monday. The
dominant story for this market has been the strong production and export pace out of Brazil. This was given
further immediacy when Cecafe reported on Friday that Brazil had exported 3.58 million bags of green coffee in September, up 3.2% from September 2025.
COTTON
December Cotton was near unchanged early Tuesday as the market traded inside Monday’s range, which was
inside and Friday’s range. The weekly US Crop Progress report was postponed due to the holiday on Monday
and will be released Tuesday. Friday’s USDA supply demand report was bearish against expectations but it did
not do significant damage to the market. The US and world stocks/use ratios were up from the September
estimates but were still down from year ago and below the five-year averages.
SUGAR
March Sugar edged higher early Tuesday following a rally on Monday that took prices back in the vicinity of the
contract high from earlier this month. Weather-related crop problems in Europe, India, and Brazil this year have
tightened the supply demand setup. Brazil has seen too much rain, which has interrupted harvest and lowered the sugar content in the cane. High energy prices have also encouraged crushers to focus more of their efforts
on ethanol.
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