Malaysian palm oil makes new contract highs overnight.

Wheat and soybeans were higher overnight, with bean oil leading the way for soybeans. November Malaysian palm oil futures went to new contract highs overnight to 4,553 RM/MT, lifting beans higher for the 3rd session of the row since the new September low score Tuesday morning. Corn futures languished a few pennies, digesting yesterday's leaks rumors on the ethanol mandate. Overall, there continues to be reports of disappointing combine corn yields due to acute disease pressure, with soybean yields also disappointing but less so than corn. This is setting up for a lower national yield guess on the October 12 WASDA crop production data.

A leaked story from Reuters on the EPA proposals of 2020-2022 US biofuel mandates run the prospects of an official EPA mandate announcement would come before the end of the month. Most DC watchers suggest that OMB has yet to score the proposed EPA mandate proposal, which could delay an announcement until October. The unknown is how the Biden Administration will approach small refinery exemptions on ethanol, allowing struggling blenders to avoid economic harm. There are more questions than answers as big oil and the US biofuel industry continues to square off and battle over the 2007 US Energy Legislation.

World stock markets and energy markets continue recovering from the Monday sharp downturn as China's Central Bank pumped $17 billion of cash into its economy as a financial backstop to embattled property developer Evergrande. China's injection of fresh liquidity is the largest in 8 months. As a result, the share price of Evergrande soared 17%, while China's Hang Seng Index closed 1.2% while Shanghai was up .4%. News is awaited as to whether Evergrande paid the dollar-denominated debt on Thursday or defaulted. However, Evergrande has 30-day grace periods to remedy their payments before they're officially declared default.

In a new 5-year plan, China's ag ministry pegged China's sow herd at 41 Mil head with numbers not to fall below 37 Mil head. The prior target was 40-43 Mil head, but as China finishes hogs to heavier weights, the excessive sow numbers produced too much pork. China said it would keep records on farms that send more than 500 hogs to market per year to comply in different sow production zones–green, red, and yellow to help stabilize China's pork supply.

Weather models are coming back into alignment and suggesting a much warmer temperature profile than yesterday, with above too much above 70's to lower 90's prevailing. The warmth will extend the 2021 growing season. A Ridge of high pressure maintains its position across the Plains and pulses north and east from time to time. A fetch of Gulf moisture allows showers across Texas and the far Western Plains into the closing days of September. Any rain for the Plains is desperately needed amid deepening drought conditions. The E Midwest has the best chance of rain in the next two days with totals of .5-1.50″. The rain and wind will cause some crop damage, but harvest should resume during the weekend. Otherwise, the forecast is open for a rapid harvest with virtually no rainfall into October 3.

Cattle futures mounted a rally yesterday with higher closes offering a better outlook for early trade today. Yesterday's cash cattle trade was slow to develop, with sales in Kansas quartered at $123-124, which was steady with a week ago. Light trade in the Texas Panhandle was steady at $124, and sales in Nebraska were down $1 at $124. Beef values again plummeted at midweek. The choice-value fell $3.54, and select was $2.51 lower. The lower trend looks to continue into early October.

NASS will release the September Cattle on Feed report after the close on Friday. Ahead of the report, the average trade estimate calls for an August feedlot placement rate at 99% of last year, a marketing rate of 100%, with a September 1 feedlot inventory at 98% of a year ago. If realized, on feed figure will be the smallest in four years.