DeLong Commentary

CBOT Pricing:

Soybeans: November soybeans found resistance at $10.45 for the second day in a row due to farmer selling in areas of the country where harvest is still in progress. The Nov26 contract ended 3 cents down from the prior settle at $10.4175 but gained 22.25 cents on the week. The Jan26 contract ended down 1.5 cents at $10.6025. The Nov-Jan spread pushed back out to -19 cents as first notice day for the Nov25 contract approaches.

Corn gave back some of yesterday’s gains closing down 2-4 cents as farmer selling picked up over $4.25. The Dec25 contract finished the day 4 cents lower at $4.24, still up 3/4 of a cent for the week. The March contract finished 3.75 cents lower at $4.4625

Market Headlines:

President Trump and Chinese President Xi Jinping are set to meet next week:

President Trump will depart for Asia later this week, with planned stops in Malaysia, Japan, and South Korea. The meeting with President Xi is scheduled for next Thursday (10/30) in South Korea during the Asia-Pacific Economic Cooperation Summit. Notably, China’s potential resumption of U.S. soybean purchases is expected to be a key topic of discussion.

In the days leading up to the summit, US Treasury Secretary Scott Bessent will meet with Chinese negotiators in Malaysia over the next three days, signaling that both sides are working to establish common ground before the leaders convene.

US sanctions on Russian oil may curb Chinese oil imports from Russia:

Yesterday, the Trump administration imposed sanctions on two Russian oil companies in an effort to further restrict funding for Russia’s war in Ukraine. Currently, about 20% of China’s crude oil imports come from Russia, underscoring the potential impact of these measures.

Companies that continue doing business with the sanctioned firms now face severe penalties, including loss of access to Western banking systems and global oil markets.

The US will increase Argentine beef imports:

The Trump administration plans to quadruple beef imports by raising the tariff quota on Argentine beef. This move is part of a broader effort to lower retail beef prices for U.S. consumers and ease inflationary pressures. However, the proposal has sparked significant backlash from the domestic cattle industry, which argues that the policy could hurt US producers and threaten national food security.

US and Mexican Officials are scheduled to meet next week to discuss reopening the boarder to Mexican feeder cattle imports:

Next week, Mexico’s Agriculture Minister and US Agriculture Secretary Brooke Rollins will meet to discuss reopening the border to Mexican feeder cattle imports. The border has remained closed since May following an outbreak of New World screwworm. As recently as September, authorities confirmed a new case of the parasite just 70 miles south of the border, indicating that containment efforts have been unsuccessful. The suspension of trade has tightened the US feeder cattle supply, which in turn has driven cattle prices higher.

USDA Weekly Drought Monitor:

Drought conditions across most of the Corn Belt remained mostly unchanged last week. However, southern and western Kentucky and southern Illinois received substantial rainfall, leading to improved conditions. In contrast, northeast Iowa and eastern Illinois experienced a lack of rainfall, leading to worsening drought conditions. Meanwhile, central Nebraska saw notable improvement, while eastern Kansas, central Oklahoma, and northeast Nebraska recorded further deterioration.

US Areas Experiencing Drought:

Corn: 32%

Soybeans: 39%

Winter Wheat: 43%

Spring Wheat: 16%

Cattle: 27%

 

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