Good morning!
Grain futures weaker overnight… As of 6:00 a.m. CST, March corn futures were down 1 1/4 cents, January soybeans off 3 1/2 cents and March SRW and HRW wheat futures down 1 1/2 to 3 1/4 cents. The corn futures market remains choppy as prices are right in the middle of a well-defined trading range—suggesting more of the same. Soybean meal futures hit a five-week low overnight and meal prices are starting to trend lower. That’s a bearish technical development for soybeans, as prices hover just above key chart support. Winter wheat futures continue to languish amid price downtrends still in place on the daily bar charts. The key outside markets early this morning see the U.S. dollar index slightly up. Nymex crude oil prices are slightly lower and trading around $59.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11 percent.
More snow and cold coming this weekend for Northern Plains, Midwest… The National Weather Service today said winter weather will continue to make headlines across multiple regions of the country going into the upcoming weekend. A storm system that will be producing widespread snowfall will be a Pacific low that moves inland across the Northwest U.S. and interacts with an arctic frontal boundary that will be situated across the northern Rockies through Saturday. The snowfall will be much heavier than what is expected for the Eastern U.S., with one to two feet of accumulation likely for the higher terrain of northern Idaho to western Montana and then extending to the Wasatch Range and western Wyoming, and the Colorado Rockies. There should be some abatement in the snowfall by Saturday night as the lift and moisture exit the region. Snowfall becomes more likely from the Dakotas to Iowa and southern Minnesota by Saturday afternoon into early Sunday as the low-pressure system reaches the Midwest states. Elsewhere across the Continental U.S., dry conditions are expected to continue from California to the southern Plains and extending eastward to the Mid-South and Ohio Valley. It will be quite cold from the Northern Plains to the Northeast with a big dip in the jet stream and multiple cold frontal passages heralding the arrival of arctic air masses. Some subzero overnight lows are likely across portions of the Dakotas and into Minnesota, especially by Sunday morning in the wake of the next arctic front.
FDA conditionally approves drug to treat/prevent New World Screwworm in cattle… Thursday the U.S. Food and Drug Administration said in a press release it has conditionally approved Exzolt Cattle-CA1 (fluralaner) topical solution for the prevention and treatment of New World screwworm (NWS) larval infestations, and the treatment and control of cattle fever tick in beef cattle two months of age and older and replacement dairy heifers less than 20 months of age. “This conditional approval gives cattle producers a new tool to combat two parasites threatening the well-being of cattle in the U.S.,” said FDA Commissioner Marty Makary. “Although NWS has not been detected in the U.S., cattle fever tick is here. This is the first drug conditionally approved by the FDA specifically for the control and treatment of cattle fever tick.” This conditional approval means the FDA has determined Exzolt Cattle-CA1 is safe and has a reasonable expectation of effectiveness for its intended use. The sponsor, Intervet, Inc. of Rahway, New Jersey, has up to five years to generate the additional effectiveness data needed to support a full FDA approval, said the press release.
India’s central bank cuts its key interest rate… India’s central bank today lowered its benchmark interest rate for the first time in six months and signaled it is open to further easing, predicting inflation will remain relatively low. The Reserve Bank of India’s six-member monetary policy committee voted unanimously to cut the repurchase rate by 25 basis points to 5.25% and retained the policy stance at neutral. Governor Sanjay Malhotra said the growth-inflation balance continues to provide policy space to support the growth momentum, and the RBI has kept the door open for more policy action. India’s rate cut comes ahead of an expected interest rate reduction from the U.S. Federal Reserve next week and follows weaker economic data from China that suggests Chinese economic officials will also further ease their monetary policy. Easier monetary policies and interest rate cuts from major global economies are potentially bullish for raw commodity markets, including grains and livestock, because they suggest better demand for goods and services due to lower borrowing costs and improved consumer and business confidence.
China expected to keep its monetary policy “loose” at important upcoming meetings… China’s leaders are expected to stick with its manufacturing-led growth strategy in key policy meetings this month, reports Bloomberg. “The country’s domestic demand is showing significant weakness, but authorities have tried to boost consumption with incremental measures like childcare subsidies. Economists expect policymakers to maintain the current more proactive fiscal stance and a moderately loose monetary stance for 2026, with a focus on advanced manufacturing and technology,” said the report. However, there are also calls growing at home and abroad for a more urgent shift toward consumption. The Communist Party’s decision-making Politburo typically convenes in early December, followed within days by the Central Economic Work Conference. While the meeting statements won’t contain specific policy measures, they serve as a useful guide to understand policymakers’ priorities. “This year’s gatherings come amid signs of significant weakness in domestic demand. Authorities have tried to boost consumption with incremental measures like childcare subsidies but are probably not facing enough pressure yet to make major moves such as expanding the social safety net,” said the report.
Australian beef exports hit record amid strong demand from United States… Australia’s beef exports hit a record high this year on strong demand from the U.S., according to Meat & Livestock Australia and as reported by Bloomberg, with no sign of a rebuild in the American cattle herd. Shipments were at 1.4 million tons in the first 11 months, 15% higher than at the same point last year, the industry group said in a statement. That’s ahead of the previous full-year high of 1.34 million in 2024. The U.S. remained the biggest export market, taking almost a third of Australia’s beef, despite the Trump administration imposing a 10% tariff on the country’s meat that’s since been removed. “American beef imports have surged in recent years as domestic herd numbers shrunk to 70-year lows and red meat prices in supermarkets jumped. President Donald Trump said in November that he would cut levies on beef imports,” said the report.
Malaysian palm oil futures up to end the week… Malaysian palm oil futures rose to around MYR 4,140 per MT, reversing losses from the previous two sessions, supported by strength in Dalian and Chicago vegetable oils. The market is on track for a second consecutive weekly increase, up roughly 0.7%, driven by expectations of renewed Indian palm oil buying after refiners reportedly cancelled about 70,000 tons of crude soyoil scheduled for delivery between December and January. Rising global prices and a weaker rupee made imported soyoil less competitive, prompting Indian buyers to favor palm oil and supporting demand. Seasonal demand expectations ahead of the Lunar New Year and Ramadan 2026 further underpinned risk appetite. Gains, however, were capped by Reuters’s projections of higher Malaysian palm oil inventories, potentially reaching a 6-1/2-year high by November-end, alongside lower Indonesian export taxes for December and weak shipments, with Intertek reporting a 19.7% mom drop in November exports.
Cattle futures markets remain in rally mode… February live cattle on Thursday rose $2.10 to $224.00 and hit a three-week high. January feeder cattle gained $4.725 to $336.575 and hit a four-week high. The cattle futures markets rallied again Thursday on more short covering and higher cash cattle trading so far this week in a light test. The much-improved near-term technical postures for live and feeder cattle futures markets are also inviting the chart-based speculators to more actively play the long sides. USDA at midday Thursday reported light cash cattle taking place so far this week at solidly higher prices, with steers and heifers averaging $216.64. USDA reported last week’s average cash cattle trading price was $211.53.
Lean hog futures bulls also shifting into higher gear… February lean hogs on Thursday rose 85 cents to $81.85 and closed at a three-week high close. Lean hog futures Thursday saw more short covering following losses on Monday and Tuesday. Traders are now thinking the cash hog market has put in a seasonal bottom. And while the overall chart posture for the hog futures market is not overtly bullish, recent gains suggest a market bottom is in place and that prices can at least work sideways in the near term. More gains in the cattle futures markets Thursday also supported buying in the hog futures. The latest CME lean hog index is up 6 cents to $81.67. Today’s projected cash index price is up 16 cents at $81.83. Thursday’s national direct 5-day rolling average cash hog price quote was $69.89.