Good morning!
Grain futures markets rally overnight… As of 6:00 a.m. CST, March corn was up 2 cents, March soybeans were up 4 1/4 cents and March SRW and HRW wheat futures were up 6 1/2 to 7 3/4 cents. The grain futures markets saw some short covering and position evening overnight, ahead of today’s USDA supply and demand data dump, which will likely be the event of the week for the grains. Don’t be surprised to see a couple of surprises in today’s batch of USDA numbers, which could move the grain futures markets. (See analysts’ estimates below.) The key outside markets today see the U.S. dollar index lower. Nymex crude oil futures prices are weaker and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.19 percent.
Keen risk aversion in markets as Federal Reserve served grand jury subpoenas… Federal Reserve Chair Jerome Powell said Sunday the U.S. Department of Justice has served the Federal Reserve with subpoenas and threatened it with a criminal indictment over Powell’s testimony last summer about the Fed’s building renovations. “The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as sharply as he prefers,” said the Associated Press. The subpoenas relate to Powell’s testimony before the U.S. Senate Banking Committee in June, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump has criticized as excessive. “Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement in which he bluntly characterized the threat of criminal charges as simple ‘pretexts’ to undermine the Fed’s independence when it comes to setting interest rates,” said the AP report. In a brief interview with NBC News Sunday, Trump insisted he didn’t know about the investigation into Powell. When asked if the investigation is intended to pressure Powell on rates, Trump said, “No. I wouldn’t even think of doing it that way,” the AP report said. Stock and financial markets were roiled overnight on the surprise Powell/Fed news. European stocks sold off overnight. The U.S. stock indexes are set to open sharply lower and the U.S. dollar index under pressure. Gold prices shot up over $100 an ounce and hit a record high overnight, with silver up nearly $5 an ounce and also hitting a new high.
Iran’s civilian protests growing, hundreds killed… Iran’s foreign minister said security forces have “full control” of the country after two weeks of ongoing upheaval, accusing Israel and the U.S. of fomenting the nationwide protests in which hundreds of people have been killed. Abbas Araghchi repeated claims by the Iranian government that “rioters and terrorists” had killed police and civilians and destroyed public property using “Daesh-style violence,” referring to the Arabic acronym for Islamic State, Bloomberg reported. The demonstrations continued into Monday. “We have many pieces of evidence which show interference by the U.S. and Israel in this terrorist war,” Araghchi said in an interview to state TV, adding “Israel is directly responsible, and also Americans through their remarks by promoting violence.” Protests in Iran erupted on Dec. 28 after a sudden collapse in the value of the Iranian currency. They broadened into the biggest and most violent challenge to the rule of Ayatollah Ali Khamenei and the Islamic Republic since it was established after the 1979 revolution that ousted a pro-U.S. monarch. More than 540 have been killed in the protests and over 10,000 arrested, according to the Human Rights Activist News Agency, which is tracking demonstrations in 186 cities across Iran’s 31 provinces. Communications remain largely cut off, which has made it difficult to track the full scope of the movement, Bloomberg reported. President Donald Trump said Sunday that Washington is mulling potential options in response to reports of deadly crackdowns in Iran, but added that Tehran’s leadership has reached out to seek talks. “We’re looking at it very seriously. The military is looking at it, and we’re looking at some very strong options,” Trump told reporters on Air Force One as he returned to Washington from his Mar-a-Lago home in Florida. “We’ll make a determination,” said Trump and as reported by Bloomberg.
Rapid warm-up forecast across much of the lower 48 today and tomorrow... The National Weather Service reports expansive high pressure will drive calm weather across much of the nation to open the work week, with most notable precipitation relegated to the western face of the Olympic Range from a weakening atmospheric river. Temperature-wise, unseasonably mild weather is in store for much of the lower 48 today and tomorrow as a zonal jet stream scours out lingering polar air over the continental U.S. While much of the nation will feel above-average highs today and tomorrow, warm weather fans across the heartland. Some highs in in the southern Midwest will reach the 50’s and 60’s -- nearly 25-30 degrees above average. The lone exception to this warm stretch will fall along the Gulf Coast, which could experience marginally freezing overnight temperatures beneath the high-pressure center. Cold air should eventually return east of the Continental Divide beyond Tuesday behind a series of cold fronts. A deepening low-pressure center along these fronts also will support additional wintry weather over the upper Midwest and Northeast later this week.
China selling its soybean stocks… China is restarting soybean auctions, after a three-week pause, in an apparent attempt to clear storage space as it keeps buying from the U.S. following the trade truce between the two countries, Bloomberg reported. Sinograin will put 1.13 million tons of soybeans up for sale on Tuesday, according to a statement published on the website of the National Grain Trade Center late Friday. The state-run grain stockpiler held several auctions in December, the first such sales since Beijing and Washington reached an agreement at a meeting in South Korea in late October. China has stepped up purchases of U.S. soybeans, and committed to buy at least 12 million tons by the end of February, according to officials in Washington. State firms returned to buying from the U.S. from late October, and have booked a flurry of cargoes since then, putting the world’s biggest importer on track to meet the apparent target. “The unusually large offer on Tuesday comes after feed producers and crushers secured about 900,000 tons of soybeans in the past three auction rounds, out of a total of nearly 1.58 million tons put up for sale,” according to Bloomberg and based on data from China-based commodities consultancy Mysteel.
Grain traders await today’s USDA S&D data… Trading in the grain futures markets may be more subdued this morning, ahead of the midday USDA final 2025 crop production report, quarterly grain stocks, South American corn and soybean production, and U.S. wheat seedings data. The following are averages of analysts’ estimates, compiled by Reuters, ahead of today’s report that comes out at 11:00 a.m. CST.
--2025 U.S. corn production: 16.552 billion bu. (16.752 billion in the November report) and an average yield of 184.00 bu. an acre (186.0 in the November report).
--2025 U.S. soybean production: 4.229 billion bu. (4.253 billion in the November report) and an average yield of 52.7 bu. an acre (53.0 in the November report).
--U.S. quarterly corn stocks as of Dec. 1 are estimated at 12.962 billion bu. (12.075 billion bu. on Dec. 1, 2024). U.S. quarterly soybean stocks as of Dec. 1 are 3.25 billion bu. (3.10 billion on Dec. 1, 2024). U.S. wheat stocks as of Dec. 1 are seen at 1.636 billion bu. (1.573 billion on Dec. 1, 2024).
--2025-26 marketing year ending stocks for U.S. wheat are seen at 896 million bu. (901 million in the December report). U.S. corn stocks are seen at 1.972 billion bu. (2.029 billion bu. in the December report). U.S. soybean stocks are seen at 292 million bu. (290 million in the December report).
--The 2025-26 Argentine corn crop is seen at 53.63 million MT (53.0 million MT in the December report). Argentina’s 2025-26 soybean crop is seen at 48.53 million MT (48.50 million MT in the December report).
--The 2025-26 Brazilian corn crop is seen at 132.46 million MT (131.00 million MT in the December report). Brazil’s 2025-26 soybean crop is seen at 176.35 million MT (175.0 million MT in the December report).
--2025-26 global ending stocks for wheat are seen at 275.95 million MT (274.87 million MT in the December report). 2025-26 global ending stocks for corn are seen at 279.62 million MT (279.15 million MT in the December report). 2025-26 global ending stocks for soybeans are seen at 123.07 million MT (122.37 million MT in the December report).
--U.S. all wheat planted acres for harvest in 2026 is seen at 32.413 million (33.153 million in 2025).
U.S. may lift sanctions against Venezuela as early as this week… U.S. Treasury Secretary Scott Bessent told Reuters that additional U.S. sanctions on Venezuela could be lifted as soon as this week to facilitate crude oil sales, and that he will also meet this week with the heads of the International Monetary Fund and World Bank on their re-engagement with Venezuela. Bessent said in an interview late on Friday that almost $5 billion worth of Venezuela’s currently frozen IMF special drawing rights monetary assets could be deployed to help rebuild the country’s economy. “We’re de-sanctioning the oil that’s going to be sold,” Bessent said during a visit to a Winnebago Industries engineering facility, Reuters said. The U.S. Treasury is examining changes that would facilitate the repatriation of sale proceeds of the oil stored largely on ships back to Venezuela. “How can we help that get back into Venezuela, to run the government, run the security services and get it to the Venezuelan people?” he said of the Treasury’s sanctions analysis. Asked when more sanctions could be removed from Venezuela, Bessent said, “It could be as soon as next week,” but did not identify which ones. The moves are part of the Trump administration’s effort to stabilize Venezuela and encourage the return of U.S. oil producers to the country a week after U.S. forces captured Venezuelan leader Nicolas Maduro in Caracas and brought him to New York to face drug trafficking charges.
Malaysian palm oil futures rally… Malaysian palm oil futures gained 1.4% on Monday to around MYR 4,090 per MT, rebounding from a modest decline in the prior session. The recovery was supported by fresh data from the Malaysian Palm Oil Board (MPOB) showing December output fell 5.5% month-on-month to 1.83 million MT, easing supply concerns. Shipments also improved, climbing 8.5% to 1.32 million MT after earlier weakness. Adding to the upbeat tone, cargo surveyor Intertek Testing Services reported exports of Malaysian palm oil products for January 1–10 surged 29.2% from the same period in December. Demand prospects brightened in India, the world’s largest importer, where purchases are expected to rebound in January after dropping to an eight-month low in December. Still, gains were capped by a stronger ringgit, which weighs on export competitiveness, and softness in edible oils on China’s Dalian exchange. Traders also remained cautious ahead of key Chinese data this week, including December trade and Q4 GDP.
Technically bearish weekly low closes in cattle futures markets on Friday… February live cattle futures on Friday fell $1.55 to $233.725 and for the week lost $2.275. March feeder cattle futures lost $3.025 to $354.70 and on the week gained $1.75. The technically bearish weekly low closes in February live cattle and March feeders set the table for some follow-through, chart-based selling pressure early this week. More active cash cattle trading late last week saw USDA today reporting steers averaging $231.42 and heifers averaging $231.96. Those numbers are close to the prior week’s average cash cattle trade reported by USDA at $231.68. While cash cattle trade has notched a series of gains in recent weeks, packer margins have suffered as boxed beef values have eroded a bit.
Lean hog futures see mild profit taking Friday… February lean hog futures on Friday fell 57 1/2 cents to $85.30 and for the week were down 85 cents. The hog futures market saw mild end-of-the-week profit taking from the shorter-term traders after posting good gains Thursday. A weakening CME lean hog index and a dip in cash hog prices also weighed on futures Friday. Still, the bullish near-term chart posture for lean hog futures should support some more speculator buying interest this week. Lean hog futures’ premium to the CME lean hog index remains a positive element for the futures market. The latest CME lean hog index is down 27 cents to $80.98. Today’s projected cash index price is down 13 cents to $80.85. The national direct five-day rolling average cash price Friday was $68.56.