AM Comments September 4 2025
Good morning. Thursday trade in the commodity space has started much the same way Wednesday ended, with most ag markets lower, crude oil futures lower, and the equity markets mostly in the green on not a lot of new overnight news. The slow creep towards the full onset of harvest across the Midwest has produced rather lifeless markets this week, and we would expect this theme to continue as there isn't really a lot on the horizon fundamentally until the September WASDE report a week from tomorrow. In the meantime, traders will continue to look for signs of improving relations between the US and China but following events in Beijing the last few days, we are not overly optimistic that such news will be found. Corn futures to start Thursday are trading 1-2 cents lower, soybean futures are trading 4-5 cents lower, and the Chicago wheat market is trading 6-8 cents lower. Products are lower, soybean meal is down around 50 cents/ton and soybean meal is down 20-30 points. Outside markets are mixed, crude oil futures are down around 60 cents/bbl, the Dow Jones index is unchanged, and the US$ index is up 10-20 points; the S&P500 is up 10 points and the NASDAQ is up 60 points.
Today's Reports: Weekly Jobless Claims; EIA Weekly Ethanol Production/Energy Stocks
- The CME Group for Thursday assigned 13 contracts of soybean meal for delivery, along with 82 contracts of soybean oil, 360 contracts of rough rice, 126 contracts of soybeans, and 8 contracts of Chicago wheat.
- This morning's weekly EIA ethanol report, delayed a day this week due to the Monday holiday, is expected to show average daily production in the week ending August 29th between 1.060-1.068 mil bbls/day, while stocks in the week are seen between 22.200-22.449 mil bbls.
- Dutch group Rabobank said in a report on Wednesday that they see Brazil's soybean crop in the 2025/26 season reaching roughly 175 MMTs, which would be a new record, but they see just modest expansions in planted area of around 1.5%; this would compare to more recent average increases of around 3.5%/year.
- Following news of work towards an agreement between China and Australia to trade canola earlier this week, Canadian PM Mark Carney said on Wednesday that he and other senior officials in his administration would be working with Beijing to resolve a dispute over new tariffs that China has imposed on Canadian canola imports. Speaking to reporters in Toronto, Carney said, "We're going to work hard to get that right," but did not go into further detail on plans or a timeline.
- Germany's Ag Ministry said on Wednesday that the country's winter wheat harvest this year would likely be up some 26% compared to last year at 22.45 MMTs despite repeated rains falling throughout the summer and just before harvest. The group added that total grain harvest in Germany this year was also expected to be up some 15% on the year to 44.7 MMTs.
- The absence of more than a million head of Mexican feeder cattle from US feedlots due to the screwworm virus outbreak has had interesting effects on US feed demand in recent months; while the cattle not being in the US means domestic feed use is likely falling, these cows are still being fed US corn on the other side of the border, which means the demand is mostly just shifting from the domestic demand category to the export category, potentially not having a lot of overall effect on ending stocks.
- Differing opinions on the outcome of this weekend's OPEC+ meeting have produced rather volatile trade in the crude oil market this week, with prices falling this morning for a second consecutive session on ideas that the 1.65 mil bbls/day in production that is currently being restricted could be put back online earlier than previously anticipated. That said, another camp sees production hikes as unlikely due to some members already being up against output limits.
- Following a ruling from an appeals court last week that President Trump couldn't impose wide-ranging import taxes by invoking a law designed for emergencies, the President on Wednesday appealed the ruling to the Supreme Court, seeking an expeditious decision on a case that could affect trillions of dollars in trade. Trump said that the US may have to "unwind trade deals" and would "suffer greatly" if the ruling is upheld.
- Other trade related news for Thursday includes reports from the Japanese government that the country's head trade negotiator would be heading to the US through Saturday for trade talks, and also that Trump and Canadian PM Mark Carney spoke on Monday and had "lengthy and good" conversations according to sources familiar with the matter.
- A slow-moving cold front produced light shower activity across the central and eastern Corn Belt on Wednesday, though totals were generally less than a quarter inch and coverage was rather spotty. Forecasts show additional cold fronts working through the region between now and the start of next week, but the models are continuing to put the best rain potential mostly south of the main Midwest growing areas.
- The fronts will obviously keep temperatures mostly below average into next week, but there have been notable changes in the 5-10 day temperature outlooks from both the GFS and the EU models overnight, with both now showing a return to above average warmth for the central US September 9th-14th. The GFS is comparatively warmer than the EU, but both are noticeably different from their solutions on Wednesday.