Written Commentary
SOYBEANS
The US harvest advanced rapidly over the weekend, resulting in some hedge pressure to start the week and keeping the bears in control. Commitments of Traders data showed that Managed Money traders sold beans, meal, and bean oil heavily, and it’s the first time in four months that speculative funds have been net short all three markets simultaneously.
SOYBEAN MEAL
US soymeal prices were lower last week, pressured by large export sales out of Argentina following their export tax holiday, which turned US meal export prices uncompetitive. The tax holiday was short-lived, as Argentina reached its $7 billion cap in just three days which ended the incentive program. Export taxes have now been reinstated. The heavy sales in a condensed timeframe pressured South American meal values, which are now well under US prices, limiting rally potential for meal futures.
CORN
Corn is starting the week under pressure after a strong harvest weekend and another week of ideal weather to bring the crop home. The USDA will release its September Quarterly Stocks report tomorrow, and the pre-report estimate for corn is 1.337 billion bushels, down from 1.763 billion bushels in September a year ago. The USDA has a history of coming in below the average estimate, doing so in six of the last seven years.
WHEAT
Wheat is under light pressure to start the week, with little fresh market-moving news over the weekend. Tomorrow’s September Quarterly Stocks report will also feature a wheat production update, however. Quarterly Stocks are expected at 2.043 billion bushels, up from 1.992 billion in September of last year, and All Wheat production is expected at 1.925 billion, slightly below the August estimate of 1.927 billion. HRW and SRW production are expected to be near unchanged from August. SovEcon expects Russia’s September wheat exports to reach 4.3 million tonnes, down from 4.4 million in August.
CATTLE
Live cattle prices ended last week with a steady close on Friday, but feeders settled higher. December live cattle tested key support, and Friday’s low may be an important pivot point for the broader uptrend. Worries about government intervention into the cattle market pressured prices last week. US beef exports to China have dropped sharply, while China’s imports of Australian beef have risen significantly due to tariffs.
HOGS
December hogs closed out last week with a new contract high close, following Thursday’s bullish Hog and Pig report. The report focuses on a shrinking hog herd, which has reinvigorated the bull camp. Open interest rose by nearly 5,500 contracts on Friday, also a good sign for the bulls. COT data showed funds added slightly to their already record net long position. US pork in cold storage in August dropped 2.7% from July, but is down 13.5% year-over-year.
MILK CLASS III
November Class III milk finished with a moderate weekly loss after after recrovering from a 1 1/2-week low on Tuesday.
ENERGIES
December Crude Oil gapped lower today after reaching its highest level since August 1 on Friday. The Kurdistan-Turkey pipeline restarted over the weekend after several delays and after being stopped for two years. Initial flows are expected to add 180,000 to 190,000 barrels per day of crude to flow to Turkey’s Ceyhan port and is ultimately expected to bring up to 230,000 bpd. There are report that OPEC+ is expected to approve another crude production hike of at least 137,000 bpd at its meeting on Sunday.
November RBOB and November ULSD are lower this morning and have given back their gains from Friday. Product prices drew support last week from reports of Russia restricting exports in the wake of Ukrainian drone attacks that damaged Russian oil infrastructure and caused fuel shortages.
The 6-10 day forecast has some cooler than normal temperatures showing up in portions of the western US, which is a little less bearish than recent forecasts. However, both the 6-10 and 8-14 day show above normal temperatures east of the Rockies, which suggests heating demand will trend low out through October 12 and keep US supply gaining at an above-normal rate.
DOLLAR INDEX
While the US dollar reached its highest level since the middle of August last week, the greenback looks to have made an interim peak and is likely to fall back below 97.00 as the global trade expects the US to fail to control its debt and deficits.
COCOA
December Cocoa was higher overnight and traded right up to the 9-day moving average. The market fell to its lowest level since mid-July last week on the return of seasonal rains in West Africa and perhaps renewed concerns about demand. The 3rd quarter grind numbers for Asia, Europe, and North America are due to be released on October 16. The weather maps over the weekend showed a little rain in Ivory Coast but substantial amounts in Ghana and some in central Nigeria and Cameroon.
COFFEE
December Coffee extended last week’s recovery rally overnight and traded to its highest level since September 17. It also achieved the 50% retracement of the selloff from the September 16 contract high to last week’s low. The market is awaiting a meeting this week between President Trump and Brazilian President Luiz Inácio Lula da Silva to see if some sort of compromise agreement can be worked regarding the 50% tariffs on Brazilian exports to the US. So far the tariffs have led to a squeeze on US supplies and a sharp drawdown in exchange stocks that inspired a rally to contract highs.
COTTON
December Cotton is higher this morning having found support at last week’s lows. The slow pace of US exports remains a concern, with last week’s export sales report coming in at their lowest level since the 2025/26 marketing year began. Cumulative sales have only reached 36% of the USDA’s forecast for the marketing year versus a five-year average of 53% for this point in the season. President Trump unveiled new import tariffs last week, including 100% duties on branded drugs and 25% levies on heavy-duty trucks, and this development could keep US export prospects poor, especially if it effects some of the US’ biggest buyers such as Vietnam or Pakistan or China.
SUGAR
The UNICA report on the Brazilian Center-South sugar crop for the first half of September is expected to be released this week, perhaps tomorrow, and a survey of analysts by S&P Global expects sugar production for the period to be around 3.6 million metric tons, up 15% from the same period a year ago. This would put cumulative production for the 2025/26 marketing year (which began April 1) down just 0.2% from a year ago after being down 14.7% in mid-June.
PRECIOUS METALS
While the uptrend in gold is entrenched, bullish sentiment is and should continue to ratchet upward as uncertainty from US budget politics is likely to reach a crescendo later this week. In fact, the dollar has reversed downward and treasury prices have firmed, which typically signals fiscal concern toward the US. Certainly, the ever present expectation for a US rate cut in October is also a primary bull force despite that influence tempered slightly by last week’s favorable US economic data.
The silver market continues to rocket toward all-time highs. While silver ETF holdings backed down at the end of last week they did reach the highest level since June 2022 last week. However, hedge fund managers raised their bullish positioning to a 3-week high last week and the net spec and fund long in silver is only 69,639 contracts which is below the 2025 high net long of 84,385 contracts.
With last week’s trading range in December copper $0.34 and supply and demand geometrically opposed, traders should expect more volatility. In fact, overnight news suggests that the Grasberg mine shutdown has not only impacted supply but has impacted demand.
EQUITIES
Apparently, the equity markets continue to “whistle by the graveyard” with their primary focus on the prospects of an October rate cut. However, between the lines there are positive views toward the consumer sector, big tech and surprisingly, growth-stocks. It should be noted that the most recent COT positioning report showed the small spec and fund positioning in the S&P net short 141,705 contracts with that net short generally building since the beginning of April! Therefore, the S&P retains speculative buying capacity. On the other hand, uptrend channel action in September was very uniform with only two modest corrections against the trend, both of which were quickly rejected.
INTEREST RATES
The US treasury market faces monthly unemployment figures at the end of the week (if the US government is operating) and the usual series of nongovernmental jobs related data released throughout the week as usual. However, street expectations for the nonfarm payroll reading for September paint a clear picture of slowing with estimates pegging payrolls at a mere 39,000. With a payroll reading of 39,000 the US will post the softest four month jobs tally in decades.
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