Written Commentary
SOYBEANS
The bulls remain in the driver’s seat as beans are rallying to start the week on comments from President Trump that he is confident a deal can get done with China. China did not purchase any US soybeans in September for the 1st time in 7 years. China bought $12.6 billion worth of US beans last year, half of total US bean exports. China may be signaling a slightly softer approach by removing one of their top negotiators from US talks after Treasury Secretary Bessent said the person was unhinged and inflexible. However, there is another reason beans have moved to their highest level in a month, and that is meal.
SOYBEAN MEAL
The soymeal market is showing signs of “changing its stripes”, with December futures moving up to a one-month high today. Support is coming from firming South American bean product premiums, which is opening the door for US meal exports in the short-term. This has resulted in higher US meal premiums, despite crush rates running at a record pace. US soy processors are looking for creative ways to get farmers to “open the bin door”, including deferred pricing and free storage, as much of the current harvest is heading into on-farm bins in hope of higher prices down the road. Optimism that President Trump and China’s President Xi can work some kind of arrangement to restart China’s US bean purchases at their meeting at the end of the month is also giving the soy complex a lift.
CORN
A steady start for corn this morning as weaker crude oil and a stronger dollar present headwinds to start the week. Over the weekend, President Trump called out the president of Colombia as an “illegal drug leader” and said any subsidies from the US to Colombia would cease. Colombia is consistently one of the top 5 US corn importers, and in retaliation Colombia could switch to South American origin.
WHEAT
Wheat closed with a weekly upside reversal on Friday and has started steady this morning. There was little major fundamental news over the weekend, but a short covering tone and a minor positive shift in the technical outlook across the grain complex keeps the bulls with the slight edge. There appears to be a subtle change going on with some countries around the world to ensure food supplies, as Pakistan now says they are going to develop a strategic reserve of 6.2 million tonnes of grains “just in case”. This comes on the heels of Sweden last week saying they will build a grain stockpile, which could encourage others to do the same. Even so, there is no shortage of wheat around the world as Australia’s crop is expected to be the 3rd largest on record and a strong crop is expected in the EU.
CATTLE
Futures prices across the cattle complex took a major dive on Friday, leaving some gaps on the daily chart, after President Trump mentioned the administration is working on a “deal” to bring down beef prices. Additionally, over the weekend Trump said beef imports from Argentina may be increased, which some have expected. Argentina already exports beef to the US, but volumes are capped by a quota limit, which could be raised to allow more product in.
HOGS
December hog prices opened on the highs Friday and inched lower to a new low for the move. Open interest dropped a substantial 10,558 contracts as speculative funds continue to liquidate. Hog open interest has now reached its lowest level since late August. Although there is no COT data to gauge the managed money long position, speculative fund liquidation may be close to running its course.
MILK CLASS III
November Class III milk finished with a sizable weekly gain after reaching a contract low on Monday.
ENERGIES
December Crude Oil has an outside day lower going today after opening higher overnight, as the market seems to be focusing on higher supply coming from OPEC+ and uncertain demand. The fact that President Trump decided not to provide Ukraine with Tomahawk missiles after meeting with Ukrainian President Zelenskiy on Friday suggests he is softening his stance against Russia, which lowers the threat of more sanctions. On the other hand, he reiterated on Sunday that Indian Prime Minister Narendra Modi told him India will stop buying Russian oil, while warning that New Delhi would continue paying “massive” tariffs if it did not do so. The Trump administration said last week that there was an agreement, but there was no confirmation from the Indian government. The Baker Hughes rig count showed US oil rigs in operation were unchanged at 418 rigs last week. This was down from 482 rigs a year ago and below the five-year average of 449. This is the lowest they have been for this point in the season since 2020.
December Natural Gas gapped higher this morning and reached its highest level since October 10. News that the European Union’s energy ministers today backed the bloc’s proposals to phase out Russian oil and gas imports by January 2028 bodes well for US LNG exports. The ministers also agreed to phase out Russian gas imports under new contracts starting in 2026 and existing short-term contracts starting in June. The market was oversold after the nearby contract fell to its lowest level since September last week and ripe for a bullish story. The Baker Hughes rig count showed US natural gas rigs in operation were up 1 last week to 121. This was up from 99 a year ago and above the five-year average of 109. This is the highest they have been for this point in the season since 2022.
DOLLAR INDEX
The USD index moved higher ahead of CPI inflation data out Friday and as President Trump softened his tone on China. Friday’s inflation data for September will grab market attention given the ongoing data blackout due to the shutdown. Inflation is expected to rise 0.3% in September to an annualized rate of 3.1%. Meanwhile, Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet this week in an effort to defuse tensions ahead of a possible Trump-Xi meeting later this month.
COCOA
Third quarter grind data were released last week from the three major regions (Europe, Asia, and North America) and on the whole, they were not as low as feared. Asia’s grind was down 17% from a year ago, a little worse than expected. North American grind rose to 112,784 metric tons, +3.2% from a year ago versus expectations for -5% to -8%. Two more plants contributed to the North American data this year, which partly explains the increase. Europe’s decline was smaller than expected at -4.8% from a year ago. Industry sources told Reuters last week that cocoa purchases in Ivory Coast have stalled, as buyers and exporters have been deterred by high farmgate prices and poor quality stocks. Apparently banks are reluctant to provide financing. This year’s main crop production is expected to be similar to the last year, pod counters and exporters told Reuters, but the first part of the harvest could be lower due to the dry conditions in August.
COFFEE
December Coffee gapped higher overnight, putting last week’s high at 418.50 in its sights. The slow, uneven start to the rainy season in Brazil and the resulting delays in flowering, pollination, and cherry setting continues to be a concern for the upcoming crop. World Weather Inc. says precipitation was erratic and light over the weekend as expected and that dry or mostly dry conditions will continue this week. A new front could move across the region next weekend and into first half of next week, which would leave some of the northern parts of the region dry until October 28 or 29.
COTTON
December Cotton extended last week’s recovery rally overnight and trade to its highest level since October 9. The market closed above the 9-day moving average on Friday for the first time since September 18, which likely sparked some additional short covering. President Trump said on Friday that his proposed 100% tariff on goods from China would not be sustainable, and he confirmed that he would meet with Chinese President Xi Jinping in two weeks in South Korea. There has been talk of a meeting, but this “confirmation’ was the most promising news so far that some sort of trade agreement could be reached.
SUGAR
March Sugar was higher overnight after a selloff on Friday that took the market to its lowest level since Tuesday, when it made a new contract low. The market has been consolidating since that date but has struggled to mark any type of short covering rally. Data over the weekend showed China imported 550,000 metric tons of sugar in September, up 36% from the same period last year. This brought cumulative imports for 2025 to 3.160 million, up 9.4% from last year. Last Thursday’s UNICA report showed Brazilian Center South sugar production for the second half of September at 3.137 million metric tons versus expectations of around 3.050 million
PRECIOUS METALS
Gold prices are sharply higher, with December contracts up nearly 3.0% as investors closely watch trade talks between the US and China this week following last week’s flare in tensions. Expectations of interest rate cuts out of the Fed have continued to provide support for gold’s rally, while the government shutdown in the US has drawn investors to increase demand for the safe haven.
Silver futures are up over 2% following a strong wave of profit-taking in the previous session. Large flows of silver from the US and China to London are helping ease a liquidity squeeze in London.
Copper prices moved higher following the release of stronger-than-expected industrial output data in China. Benchmark three-month copper on the London Metal Exchange was up 0.1% at $10,610 per ton, while US futures were up 0.7% to $5.004 a pound. Industrial output in China grew 6.5% on an annualized basis in September, beating expectations of 5.0% growth despite GDP growing at its slowest pace in a year during the third-quarter.
EQUITIES
Stock index futures are higher as earnings season moves on following volatile reactions to last week’s bank earnings and a packed earnings calendar this week. Tesla, Intel, Netflix, and Coca-Cola lead the earnings roster this week as markets will also gauge their guidance on retail consumption patterns in the absence of US data. Optimism over US-China trade talks also lifted the indexes higher this morning. Treasury Secretary Scott Bessent said relations with China have “de-escalated” and said US-China talks are set to resume this week in Malaysia.
INTEREST RATES
Futures are little changed across the curve as markets await Friday’s CPI inflation data for September, while the 10-year yield slipped below 4.0%. On the macro front, President Trump confirmed that he will meet with China’s President Xi Jinping later this month. Secretary Bessent suggested that moving the November deadline to reach a deal with China was possible. The Supreme Court’s ruling on the legality of President Trump’s tariffs, along with trade uncertainty and the government shutdown, has the potential to keep uncertainty high and lead to volatility in yields. On the central bank front, markets are nearly fully priced for a rate cut from the Fed later this month and for another cut following in December.
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