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Perspective: Morning Commentary for September 28

By: Mike Castle, Market Intelligence - Fertilizer Analyst

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September 28 – Stock futures are pointing to a lower open to start the week, with the Nasdaq and S&P 500 both remaining within shouting distance of their respective all-time highs, while the Dow Jones continues to be the laggard of the major indexes, holding in a clear downtrend after touching a three-plus month low last week. The VIX is elevated to start the week but remains on the low-end of 2026 trade, hovering just above 16 at the time of writing. The dollar is in the green again after big weekly gains but a lower close on Friday, trading at 101.16 to start the day. Treasury yields are looking to start the week in focus as they show signs of renewed upward momentum, as 2-year yields rise to 4.91%, 10-year yields rise to 5.215%, and 30-year yields pushing near 5.53%. Crude oil is higher but the grains and oilseeds are widely lower to start the week as speculative length expresses its disappointment regarding more concrete progress between the U.S. and China.

Last week’s diplomatic push between the U.S. and Iran reopened a pathway toward negotiations, but the two sides remain far apart on the concessions needed to translate renewed dialogue into a durable peace agreement. President Trump over the weekend said he had rejected the latest Iranian offer, but signaled expectations of talks continuing this week. This has crude oil prices pointing higher to start the week, with nearby WTI and Brent both up 2.3% at the time of writing to trade near $94.60 and $99.70, respectively. Ongoing escalations between Russia and Ukraine add additional risk premium as well, with Ukraine striking both a refinery and oil storage facilities in Krasnodar Krai over the weekend and into Monday, while Russia maintained heavy pressure on Ukrainian logistical and power infrastructure. That casts doubt on last week’s diplomacy, with the proposed restraint on targeting energy infrastructure clearly not taking hold at this point, though the grain markets will continue to watch for progress on Turkey’s push for renewal of something similar to the Black Sea Grain Initiative of 2022/23.

The U.S. and China have reached agreement on a $30B reciprocal tariff relief framework in each direction, with roughly 90% of covered products eventually returning to Most Favored Nation tariff levels once domestic procedures are completed. The weekend announcement is more substantive than Friday's summit readout, but it is primarily a market-access agreement rather than a new Chinese purchasing pledge. While this continues to point to an easing of tensions that could look to stabilize trade relations and work towards improving the competitiveness of U.S. ag products into China, the market is still expressing its disappointment regarding a lack of concrete purchase commitments, as evidenced by the broad selloff to start trade today. The White House release noted the creation of a dedicated agricultural market-access working group, with U.S. Trade Representative Jamieson Greer noting the administration would continue “ensuring compliance with commitments on agricultural and energy purchases.” China confirmed this working group in their own release, noting the first meeting planned before the end of 2026. That keeps open the possibility of seeing improved Chinese import demand for U.S. ag products down the road but stops short of providing a material increase today.

Interestingly, soybeans were left off the $30B list of products qualifying for tariff relief, with only seed beans being included—to me, this seems like a negotiating tactic. China is willing to use state-directed soybean purchases to meet the political commitment, already surpassing the halfway mark of the 25 million metric ton agreement with state buyers alone, but it is not yet willing to normalize the broader commercial soybean trade by eliminating the tariff to open this demand up to the country’s private crushers. Corn, wheat, sorghum, beef, and pork were all included, a potentially meaningful step in increasing trade down the road, but again being taken as a bit of a let down by the market which had priced in significant optimism coming in. As shown in the graphic below, the removal of this tariff makes U.S. corn look more competitive relative to the main competing origins this fall, namely South America due to Ukrainian shipments remaining largely cut off, though we’re still a bit overpriced in the immediate near-term given Argentina’s big export program following its record corn production.

Ultimately, the summit produced tangible progress, but it stopped short of resolving several of the most important structural disputes. Commercial soybean tariffs remain largely untouched, rare earths and critical-mineral export controls are still under negotiation, and implementation of the broader tariff reductions will depend on follow-through from both governments. With the current trade truce extended into January, those unresolved issues—along with the pace of Chinese agricultural purchases—will likely remain the biggest sources of uncertainty heading into the next round of negotiations. Skeptics may view this as China essentially buying time to see how things play out geopolitically in the months ahead before making any real concrete commitments, which likely keeps the headline trade in play. It’s also worth noting that China’s readout included an explicit focus on Taiwan, noting Xi urged the U.S. to oppose Taiwanese independence and handle the issue cautiously, while the U.S. did not mention the topic. There doesn’t appear to be any public release of discussion regarding the existing ~$14B arms sales package to Taiwan that has been authorized by Congress but not yet approved by Trump; this could be one of the more important unresolved sticking points to keep an eye on moving forward.

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Perspective: Morning Commentary for September 28

September 28 – Stock futures are pointing to a lower open to start the week, with the Nasdaq and S&P 500 both remaining within shouting distance of their respective all-time highs, while the Dow Jones continues to be the laggard of the major indexes, holding in a clear downtrend after touching a three-plus month low last week. The VIX is elevated to start the week but remains on the low-end of 2026 trade, hovering just above 16 at the time of writing. The dollar is in the green again after big weekly gains but a lower close on Friday, trading at 101.16 to start the day. Treasury yields are looking to start the week in focus as they show signs of renewed upward momentum, as 2-year yields rise to 4.91%, 10-year yields rise to 5.215%, and 30-year yields pushing near 5.53%. Crude oil is higher but the grains and oilseeds are widely lower to start the week as speculative length expresses its disappointment regarding more concrete progress between the U.S. and China.

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Perspective: Mid-Day Commentary for September 25

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.

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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
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