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Meal Leads Soybeans Higher + Diesel Export BAN??
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Meal Leads Soybeans Higher + Diesel Export BAN??

5:24 AM Grain Market Update

Current Grain Market Status

  • December corn futures are up one cent at $536.75 per bushel.
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  • November soybeans have increased by 9.5 cents, reaching $1328.25 per bushel.
  • December Chicago wheat is up 1.25 cents, now priced at $729.75 per bushel.
  • December Kansas City wheat has risen by 1.75 cents to $798 per bushel.
  • December spring wheat shows a gain of 7.25 cents, settling at $755.75.

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Soybean Crush Report Insights

August Soybean Processing Data

  • NOPA reported an 11-month low in US soybean crush at 205.46 million bushels, down 5.2% from July.
  • Despite the decline, this figure represents an all-time record for August processing, up 8.2% year-over-year.
  • Illinois saw a notable increase in soybean crush by 46%, totaling 27 million bushels compared to last year.

Geographical Breakdown of Soybean Crush

Regional Performance Analysis

  • Indiana, Kentucky, Ohio, Michigan, and Pennsylvania crushed a combined total of 38 million bushels but experienced a decrease of 7% year-over-year.
  • Overall meal production rose nearly 9%, while oil production increased over 6% compared to the previous year.

Market Reactions and Future Outlook

Factors Influencing Soybean Prices

  • Strong crush margins are driving processors to operate at full capacity; cash crush margins range between $3.50 to $4 per bushel.
  • A rally in soybean prices was noted with November contracts gaining nearly 15 cents due to strong meal futures and rising crude oil prices.

Diesel Price Concerns and Legislative Discussions

Diesel Pricing Issues

  • Senate Majority Leader John Thune mentioned exploring a diesel export ban amid surging prices; current national average diesel price is $6.31 per gallon.
  • Critics argue that restricting exports may not effectively lower consumer prices; alternative suggestions include suspending federal diesel taxes.

US-China Trade Talks on Agricultural Goods

Tariff Reduction Discussions

  • The US and China are negotiating tariff reductions on agricultural shipments worth approximately $30 billion ahead of Xi's visit to Washington.
  • Lower tariffs could boost Chinese purchases of US soybeans significantly as they face tighter supplies in Q4.

10-Year Treasury Yield Trends

Economic Implications

  • The yield surpassed the critical threshold of 5%, marking its highest level since 2007 amidst global bond sell-off concerns linked to inflationary pressures from rising crude oil prices .
  • Higher yields indicate increasing borrowing costs across various sectors including mortgages , raising questions about the effectiveness of potential Fed rate hikes .

Canadian Wheat Harvest Challenges

Impact of Weather Conditions

  • Persistent rainfall has hindered Canadian wheat harvest progress , with Saskatchewan reporting only 27% completion against a five-year average of 58% .
  • Concerns regarding crop quality arise as Canada remains a key player in global wheat exports despite being the sixth largest producer .

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Joe's Premium Subscription: https://standardgrain.com/ Apple Podcasts https://podcasts.apple.com/us/podcast/grain-markets-and-other-stuff/id1494161095 Spotify https://open.spotify.com/show/4NJ9AZcSQBrLXFLCcPrGGG 0:00 PLEASE SUBSCRIBE 1:07 NOPA Crush Report 3:55 Price Action, Meal Leads 6:06 Diesel Export Ban? 8:42 China Talks, Scott "The House" Bessent 11:47 Ten Year Yield Hits 5% 13:56 Slow Canada Wheat Harvest 🌱 NOPA August Crush Data – US soybean crush hit an 11-month low of 205.456 million bushels, down 5.2% from July, but still an all-time record for August. Soybean oil stocks tumbled to their lowest since November 2024 at 1.201 billion pounds, missing trade estimates. 📉 📈 Grains Rally – Soybeans surged nearly 15 cents to $13.19/bushel as the smaller-than-expected crush lit a fire under meal futures, with corn and wheat riding the spillover higher. 🌽🌾 Wheat also got a boost from hopes of Black Sea de-escalation. ⛽ Diesel Export Ban Talk – Senate Majority Leader John Thune floated banning diesel exports as US prices hit a record $6.27/gallon, though the Trump administration hasn't signed on. 🚛 Critics doubt a ban would meaningfully lower prices, and some lawmakers are pushing a federal diesel tax suspension instead. 🇺🇸🇨🇳 US-China Tariff Talks – The US and China are negotiating tariff cuts on ~$30 billion in trade, including agricultural goods, just a week before Xi's visit to meet President Trump. 🤝 Lower tariffs could spark fresh Chinese soybean buying, a welcome boost as US crushers face tight Q4 supplies. 🌧️ Canadian Wheat Harvest Delays – Persistent rain has stalled what was shaping up to be a record Canadian wheat crop, with Saskatchewan only 27% harvested (vs. a 58% average) and Alberta at 21% (vs. 44%). ❄️ No freeze is expected until late November, but every wet day raises the risk of quality losses. 💹 Treasury Yields Spike – The 10-year Treasury yield broke above 5% for the first time since 2007, driven by surging oil prices and inflation fears tied to Middle East tensions. 🏦 AI-fueled corporate borrowing and rising government debt are adding extra upward pressure ahead of the Fed's rate decision.