Grain Markets and Other Stuff

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🤝 US-China Talks: Xi Jinping and President Trump met in Washington, but the meeting produced no major breakthroughs on tariffs, AI, or ag trade. Hopes for China dropping its 10% retaliatory soybean tariff or new details on its $17 billion ag purchase commitment went unmet, and grains are trading lower. 📉

🚢 Black Sea Shipping: Zelenskiy says India, Turkey, Egypt, and other Middle Eastern nations are joining talks to reopen Black Sea shipping, which has been near a standstill since July. Wheat futures slipped on the news as top buyers like Egypt and Indonesia shift purchases to France, Argentina, and Australia. 🌾

🌧️ Drought Monitor: Heavy rains improved drought conditions across much of the northern Corn Belt, though southern Missouri got drier. The High Plains saw some relief too, but winter wheat areas remain 58% in drought. 🏜️

📦 Export Sales: Soybean sales disappointed at just 21 million bushels, down 66% from the prior week, with China as the top buyer. Corn came in at 33 million bushels and wheat at 10 million, both below expectations. 📊

🇨🇳 Flash Sale: USDA confirmed a flash sale of 120,000mt of soybeans to China for 2026/27 delivery. It's a small but welcome sign of continued Chinese buying. 🫘

⛽ Diesel Exports: The Trump administration is exploring limits on diesel exports to bring down prices, with Energy Secretary Chris Wright sounding out refiners. The industry is pushing back hard, warning restrictions could force refiners to cut production of all fuels. 🏭

🛢️ US-Iran & Hormuz: The US and Iran are weighing a phased deal that could reopen the Strait of Hormuz within seven days if Iran's conditions are met. News of the potential agreement pushed WTI crude down about 1.7% to around $93 per barrel. 💰

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🤝 The US and China agreed to extend their trade-war truce by two months to January 10, giving both sides more time to reach a broader deal. 🇨🇳 Treasury Secretary Bessent said this week's Trump-Xi meeting could bring announcements on ag purchases, along with a plan to set aside $30 billion each in US and Chinese exports for tariff relief.

🌽 Grain and oilseed prices slipped ahead of Thursday's Trump-Xi summit, with Dec26 corn dropping nearly 8 cents and Dec26 HRW wheat hitting its lowest trade since late August. 🫘 China is likely more than halfway to its 25 million-ton US soybean pledge, but its separate $17 billion ag purchase commitment has largely stalled.

⛽ The Trump administration is reportedly preparing a 90-day ban on diesel exports as the national average hits $6.52 per gallon, up $2.83 from last year. ⚠️ Energy Secretary Chris Wright denied the plan, and critics warn a ban could force refiners to cut output and drive fuel prices even higher.

🚜 Some farmers are locking in diesel prices through year-end, with some expecting another $1 to $2 per gallon jump if the US-Iran war drags on. 💸 Higher fuel costs could also push fertilizer up another $100 to $200 per ton, prompting early spring fertilizer purchases.

🌾 Chicago wheat futures have surged 40% from June lows to a 3.5-year high as the Russia-Ukraine war brings Black Sea shipments to a near standstill. 🚢 Buyers are turning to Australia and Argentina, paying roughly 25% more than they did for Black Sea wheat.

💵 The US dollar climbed to its highest level since late July as markets bet on more Fed rate hikes. 📈 Money markets are pricing in a 55% chance of another quarter-point hike in October, with Brent crude back above $100 per barrel.

🏭 US ethanol production fell to a 20-week low of 1.028 million barrels per day, down 6.5% from the prior week. 📊 Stocks dipped to a 6-week low but remain a record for the week at 24.68 million barrels, while Corn Belt margins stay strong.

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🌽 Iowa's corn and soybean harvests are running well behind schedule, with just 4% of corn and 2% of soybeans harvested after persistent rain left farmers only two days suitable for fieldwork last week. 🌧️ The state averaged 3.6 inches of rain last week, and more is on the way, with the heaviest amounts forecast for western Iowa.

📉 Corn futures slipped about 6 cents to near $5.37 and soybeans fell about 3 cents to near $13.26 as traders awaited this week's Trump-Xi meeting and eyed drier forecasts that could speed up harvest. 🌾 Wheat also finished lower on hopes that a Russia-Ukraine truce could reopen Black Sea shipping.

🛢️ WTI crude fell 1.2% to $94.99 for its fifth straight daily decline, but fuel prices keep climbing, with gasoline at $4.48 and diesel hitting a record $6.53 per gallon. 🚫 President Trump voiced support for banning US diesel exports, though critics warn the move could disrupt supply chains and actually push pump prices higher.

🌱 A London-based think tank projects global biofuel production could jump roughly 70% by 2030, led by the US, Brazil, and Indonesia as countries raise blending mandates amid the energy crisis. 🌍 If all proposed mandates are implemented, feedstock production could require an additional 89 million acres, roughly the size of Germany.

📊 Kalshi has asked the CFTC for approval to offer leverage on its prediction-market event contracts in a bid to attract more institutional traders. ⚖️ Rival Polymarket is pursuing similar approval, while Kalshi plans to limit leveraged contracts to qualified self-clearing members if approved.

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🌽 Corn futures rallied Monday, with Dec26 gaining ~16¢ to close at $5.43/bu. The move was driven by hopes for stronger Chinese demand and rain slowing Corn Belt harvest.

🌱 Soybeans jumped ahead of Thursday's Trump-Xi meeting, with Nov26 up ~25¢ to $13.28/bu. Traders are betting the talks could lead China to drop its 10% tariff and let private buyers start purchasing again.

🌾 Wheat also closed higher as Russia and Ukraine traded drone strikes, cooling hopes for a de-escalation. US-China trade talks wrapped their second day Monday ahead of the big Trump-Xi sit-down.

🚜 Crop conditions held steady while harvest progress sped up nationwide. Corn crop rated 57% good/excellent (harvest 13% done) and soybeans held at 58% good/excellent (harvest 12% done), with winter wheat planting at 17%.

⛽ Diesel prices hit a record $6.51/gal, sparking calls from farm-state Republicans for an export ban. The White House says it's not considering restrictions yet, even as Ag Secretary Rollins hints at a fuel-cost relief plan soon.

🚗 California finally cleared the path for E15 sales after Gov. Newsom signed new legislation. The move could save drivers billions and add ~650 million gallons of annual ethanol demand in the state.

🚢 Russia is shifting grain exports to Baltic and Arctic ports as Black Sea shipping stays restricted. Exports were down 31% July-August y/y, even as USDA expects only a modest hit to Russia's overall grain trade.

📦 US corn and soybean export inspections came in strong last week, beating expectations and last year's pace. China made up 59% of corn inspections, while wheat shipments lagged, down 64% vs. the same week last year.

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⛽ Diesel Prices – National average diesel hit a record $6.51/gal on Sunday, up 76% year-over-year, with off-road diesel nearing $6.00/gal in many areas. Fuel costs are adding $11/acre to corn and $7/acre to soybean budgets, and USDA Secretary Rollins hints at coming relief announcements. 💸

🇺🇸🇨🇳 Trump-Xi Meeting – Trump and Xi meet in Washington Thursday to tackle AI, trade, Taiwan, and the Iran war, with ag trade a key focus. China has crossed the halfway mark on its 25mmt soybean commitment, and weekend talks between Bessent and Li Chenggang were called "very successful." 🤝

🌧️ Corn Belt Rainfall – Heavy rain soaked eastern Iowa, southern Wisconsin, and northern Illinois over the weekend, with some spots topping 4 inches and flash-flooding concerns Sunday morning. Saturated fields could delay harvest, though a drier week is expected ahead. 🌽

📉 Grain Markets – Soybeans dropped ~16 cents Friday to $13.04, pressured by profit-taking, weaker crude, and advancing harvest, while corn slid 3 cents to $5.28. Wheat also finished lower as traders eye a possible Black Sea de-escalation and this week's Trump-Xi summit. 📊

💰 CFTC Fund Positioning – Managed money's corn net-long hit a fresh record at 414,460 contracts, edging out last week's mark by a single contract. Funds trimmed soybean longs by 16k (still 2nd-largest on record) and sold 9k SRW wheat contracts. 📈

🚢 Soybean Flash Sale – USDA confirmed a fresh flash sale of 111,000mt (4 million bushels) of soybeans to China for 2026/2027 delivery. It's another sign of steady, if incremental, progress toward China's purchase commitment. 🌱

🐄 Cattle on Feed – September 1 inventory rose 1% YOY to 11.16 million head, while August placements fell to a record-low 1.62 million and marketings hit a record-low 1.52 million. The report looks bullish on the surface, but shrinking marketings raise questions about the cattle pipeline down the road — though the market's real focus stays on Thursday's Santa Teresa port reopening for Mexican feeder cattle. 🥩