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Perspective: Morning Commentary for September 25

By: Mike Castle, Market Intelligence - Fertilizer Analyst

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September 25 – The grains and oilseeds are taking the lack of breakthroughs from yesterday’s U.S. / China negotiations as bearish, and I’m not just talking about pandas. Although the overall tone of the summit was one of reconciliation and diplomacy, a welcomed development amid the environment of ongoing geopolitical tensions, there have been no concrete announcements of fresh Chinese purchase agreements for U.S. agricultural commodities as of the time of writing. It’s encouraging to see a two-month extension to the existing trade truce, now extended to January 10, as well as the plans for additional meetings between the two sides during this span, but some of the existing speculative length coming into the meeting is clearly reacting with disappointment to the duration of the extension and lack of a broader agreement. The fact that we’re continuing to see China purchase U.S. soybeans, as evidenced by yesterday’s fresh flash sale announcement, is an encouraging sign, but we still have not seen any evidence of actual progress on the alleged $17B in non-soy ag purchases—nor have we seen confirmation from China on this agreement.

Keep in mind that we’ve seen a similar pattern in the previous two summits between the U.S. and China. At both the October 2025 meetings in South Korea and Trump’s visit to China in May of this year, the market came in with high hopes for big announcements, only to be disappointed by the limited material takeaways from the spectacle itself. However, both were followed up with White House fact sheets carrying details of the agreements released two days later—during the weekend when the markets were closed, leading to a resurgence in speculative buying. There’s no guarantee that pattern will continue, but this is something worth keeping in mind as we head into this weekend. The official readout released by China overnight had Xi mentioning the two sides reaching a “new joint arrangement,” but did not provide any details on what this meant, nor include any specific purchase commitments. That’s common practice from China’s side, but the real key to watch will be what the U.S. side releases in the days ahead. To that end, U.S. Trade Representative Jamieson Greer said this morning that the two sides had reached agreements on a subset of goods that can be traded, with details to be released on Monday. I would still recommend keeping an eye on the potential for details to surface over the weekend ahead of that planned announcement.

This week has also produced a notable increase in mediation efforts for commodity movement through the Black Sea, with Turkey continuing to push for a resumption of something similar to the Black Sea Grain Initiative that they helped broker earlier in the war. Other major buyers of commodities from the Black Sea have joined in the push today as well, with India, Egypt, and other Middle Eastern countries backing proposals for reaching an agreement to resume commodity flow. What’s worth noting about this renewed push is that the focus is on Black Sea shipping itself, not making this part of a broader peace agreement. Ukraine has publicly signaled willingness to accept such a truce, but Russia remains the biggest unanswered variable. Moscow has not been willing to budge on their demands thus far, but after months of significant economic damage, they may be incentivized to accept a narrowed agreement. The U.S. has proposed trilateral negotiations to bring Russia and Ukraine back to the table directly, with the U.A.E. being the suggested host. As of right now, these are just words, and commodity markets care more about actions. We’ve yet to see recent mediation efforts result in any significant change on the ground, with both sides continuing to strike one another and ultimately cut off commodity flow through the Black Sea, but even the prospect of any improvement to said flow coming to fruition may trigger nerves for managed money traders holding big speculative length.  

Stock futures are pointing to a positive open amid the optimism regarding this week’s diplomacy blitz, looking to cap off a solid week of gains for both the Nasdaq and S&P 500. The VIX is reflecting this easing of nerves as well, cooling back to trade near 15.0 after touching a week-plus high near 16.6 yesterday. The dollar is giving back some of this week’s sharp gains to start the day, down 0.3% at the time of writing to trade back to slightly below the 101 level. Surging treasury yields do keep some jitters present on Wall Street, however, with new multi-year highs being put in across the curve this week. 2-year yields are starting the day off near 4.90%, 10-year yields are just below 5.19%, and 30-year yields are just below 5.48%. Crude oil is cautiously lower amid this week’s renewed talks between the U.S. and Iran, as well as the previously mentioned push for a Black Sea truce between Russia and Ukraine, with nearby WTI down 2% to trade near $92.90 and nearby Brent down 1.5% to trade near $98.70. The ags are sharply lower to start the day amid the lack of perceived material progress for additional commodity commitments from China and renewed push for diplomacy in the Black Sea, with corn, soybeans, and wheat all down double digits at the time of writing.

August durable goods orders beat expectations in this morning’s release, with the headline number holding flat month-on-month, a decline from the downwardly revised 0.9% rise in July but still much better than the average analyst estimate of a 0.4% drop. The softness at the headline level appears concentrated in transportation equipment, with orders excluding transportation rising 0.3%. Meanwhile, core capital goods orders excluding aircraft surged 1.6%, suggesting underlying business investment remained considerably stronger than the flat headline print implies. The underlying details reinforce the broader picture of a resilient U.S. economy, particularly with core capital spending showing considerably more strength than the flat headline durable-goods reading would suggest. Keep in mind we are back to “good news is bad news” to some extent, as this underlying strength is taken as supporting factors for the Fed to continue hiking rates.

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Related articles for Grains & Oilseeds

Perspective: Morning Commentary for September 25

September 25 – The grains and oilseeds are taking the lack of breakthroughs from yesterday’s U.S. / China negotiations as bearish, and I’m not just talking about pandas. Although the overall tone of the summit was one of reconciliation and diplomacy, a welcomed development amid the environment of ongoing geopolitical tensions, there have been no concrete announcements of fresh Chinese purchase agreements for U.S. agricultural commodities as of the time of writing. It’s encouraging to see a two-month extension to the existing trade truce, now extended to January 10, as well as the plans for additional meetings between the two sides during this span, but some of the existing speculative length coming into the meeting is clearly reacting with disappointment to the duration of the extension and lack of a broader agreement. The fact that we’re continuing to see China purchase U.S. soybeans, as evidenced by yesterday’s fresh flash sale announcement, is an encouraging sign, but we still have not seen any evidence of actual progress on the alleged $17B in non-soy ag purchases—nor have we seen confirmation from China on this agreement.

Mike Castle
Mike Castle
  • Grains & Oilseeds
  • Energy
  • Dairy
  • Renewable Fuels
  • Cocoa
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Perspective: Morning Commentary for September 24

September 24 – Angst in the bond market and increasing expectations of higher for longer interest rates has stock futures pointing to a lower open today, with trade likely to be volatile around headlines from today’s Trump/Xi meeting. Treasury yields yesterday rose to fresh multi-year highs across the curve, with the biggest moves seen in the long end. Most notably, 30-year yields made a new high not seen since 2004, 10-year yields made highs not seen since 2007, and 2-year yields made new highs not seen since early 2024. They do look to be coming off of these highs to start the day, with 2-year yields back down to 4.85%, 10-year yields at 5.10%, and 30-year yields at 5.40% at the time of writing. The VIX is pushing to its highest level of the week back above 16, but it’s worth noting this remains on the low-end of 2026’s trade. The dollar is continuing its surge higher as well amid the aforementioned rising rate expectations, posting another near two-month high above the 101.3 mark. Crude oil is bouncing from its recent bottom but remains notably lower than trade over the last two weeks, with nearby WTI trading at $93.70 and nearby Brent trading at $99.80 at the time of writing. The ags are largely mixed, with soybeans showing the most strength at the break with all eyes on today’s Trump/Xi meeting, with major implications for the sector.

Mike Castle
Mike Castle
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  • Energy
  • Dairy
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  • Cocoa
  • Coffee
  • Cotton
  • Sugar
  • Meats & Livestock
  • Forest Products

Perspective: Mid-Day Commentary for September 23

September 23 – Stocks remain in the red at midday, with the Nasdaq and S&P 500 appearing to be taking a bit of a breather after their sharp rally to start the week, with additional weakness hanging over the sector amid resurgent treasury yields, particularly in the long-end of the curve. 2-year yields are trading back above 4.89%, 10-year yields are trading near 5.106%, and 30-year yields are pushing near 5.40%. The VIX is modestly higher but still on the low side of recent history as it hovers near the 15-mark. The dollar has broken above the 101 level for the first time since late July on expectations of higher rates ahead, especially amid surging yields, adding to the sharp gains seen this week. Crude oil is continuing its bounce after the sharp drop seen since late last week, with nearby WTI up 2.75% on the day to trade at $92.30 and nearby Brent up 3.8% to trade near $103 at the time of writing. The grains and oilseeds finished the session widely lower, while the cattle market saw a solid rebound today, particularly in the forwards.

Mike Castle
Mike Castle
  • Grains & Oilseeds
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