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Perspective: Mid-Day Commentary for September 25

By: Mike Castle, Market Intelligence - Fertilizer Analyst

Guest Commentary by Matt Zeller

Market Intelligence – Senior Grains Analyst

September 25 – The Dow Jones continues to favor the high side of level-par through the morning hours but it is still set for a fourth straight losing week; the Nasdaq and S&P 500 are trading steady-to-lower at the time of this writing. Treasuries are slightly higher again today after hitting their highest levels in around two decades yesterday. WTI crude oil is trading lower but not materially so, below the $100 per barrel mark but almost $2/bbl off session lows as wars rage on on multiple fronts.

Iran indicated yesterday that it would like to make a deal to re-open the Strait of Hormuz before U.S. mid-term elections in November, proposing a seven-day plan to do so as well as restart wider peace talks; however, negotiations continue today without much news. Meanwhile, both Russia and Ukraine are suggesting a new round of peace talks, but three were killed in Kyiv today by a Russian drone strike, after Ukraine hit two Russian oil refineries overnight…

Very little news of note has come from the Trump-Xi meeting thus far, more pageantry and pandas than policy. The two leaders and their wives are currently having tea at the White House, then they will hit the National Archives before President Xi wraps up the trip. U.S. Trade Representative Jamieson Greer told the press today that the two sides have reached trade agreements on a few minor items, and that more details will be released Monday.

The University of Michigan reported its final September Consumer Sentiment Index figure at 48.1, above the prior 47.8 reading and the average trade estimate of 47.5, though indicating a second straight monthly decline and a four-month low in overall consumer sentiment. Inflation concerns continue to mount as fuel prices climb, with consumers becoming increasingly frustrated over the Iran war and its effects on the U.S. economy.

The grains will see a fundamental update next Wednesday in the form of the September 30th USDA Quarterly Stocks Report, along with the Small Grains Summary, though this particular version of the stocks report is not nearly as prone to surprises – the trade and USDA generally have the ending stocks figure narrowed down to a small range post-marketing year. This report hasn’t brought much volatility in the last decade-plus, though it has produced bearish soybean moves in each of the last five years. On the small grains side, the trade will be looking for yet another minor reduction in ‘26/27 U.S. wheat output, a trend that has persisted since the initial shockingly small number back in May. For now, the grain market is consolidating into the end of the week amid a lack of news from Trump-Xi and a more favorable longer-term pattern for harvest, as speculative funds clip off some of their massive net long positions across the complex.

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