Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, March corn was up 2 1/2 cents. March soybeans were 10 1/4 cent higher, while March SRW and HRW wheat futures were up 3 1/4 to 3 1/2 cents. Short covering was featured in the grain futures markets overnight. Grain bulls are also encouraged by U.S. and global stock markets that appear to have stabilized at mid-week. The key outside markets today see the U.S. dollar index slightly down following sharp losses Tuesday. Nymex crude oil futures prices are near steady and trading around $60.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.28 percent.
Dangerously cold Arctic air to spill over the Great Plains, Midwest starting tonight... The National Weather Service today said frigid temperatures will expand across the eastern 2/3 of the country behind an Arctic cold front. Sub-zero and single digit temperatures will expand from the Northern Plains Thursday into the mid-Mississippi Valley, Ohio Valley and Northeast by Sunday. This Arctic blast will be accompanied by gusty winds, leading to dangerous wind chills. The coldest wind chills may fall below -50 across the Northern Plains. Extreme cold warnings, extreme cold watches and cold weather advisories are in effect for parts of the Northern Plains and Upper Midwest beginning tonight. This extremely cold airmass, combined with a frontal zone to its south, will produce a major winter storm from the central/southern Plains to the East Coast beginning Friday and continuing through the weekend. Meantime, a pair of low-pressure systems through the Great Lakes region over the next couple of days will generate lake-effect snow for downwind areas of the Great Lakes through Friday.
Arctic blast this week could hurt U.S winter wheat crops… “Waves of arctic air continue to march through central and eastern parts of North America. The frequent succession of cold has dried out the atmosphere making it difficult for significant precipitation events to evolve in the northern and central Plains and portions of the Midwest,” reports World Weather Inc. “Two more surges of bitter cold are expected and many areas are snow free. Temperatures will drop near and below zero Fahrenheit later this week and during the weekend, raising a little concern over the fate of U.S. hard red and Midwest soft wheat as the coldest air arrives. Most likely the crop will handle the situation relatively well, but a layer of snow would certainly take the worry out of winterkill potentials,” said the forecaster.
Marketplace awaits Trump’s delayed speech in Davos today… U.S. stock futures staged a tentative recovery as traders and investors await President Trump’s address at Davos to see whether he will ratchet down days of tensions with Europe over U.S. ambitions to take Greenland. Selling pressure in U.S. and global markets eased after Trump struck a more conciliatory tone late Tuesday, ahead of his departure for the World Economic Forum in Davos, Switzerland, even as he continued to insist the U.S. should take control of the self-ruling territory. Trump was due to speak in Davos at 2:30 p.m. local time, but his appearance will be delayed after his aircraft developed technical issues. Treasury Secretary Scott Bessent said Trump was likely to be about three hours late, though the schedule had yet to be finalized. ”European leaders arriving at Davos this week are scrambling not just to manage Trump, but to manage one another. German Chancellor Friedrich Merz is seeking dialogue, French President Emmanuel Macron is openly pushing back, and smaller states are watching anxiously to see whether this crisis produces European solidarity — or exposes how it can fracture under pressure,” said Bloomberg, in a report. Meantime, Bessent cautioned European nations against increasing their military presence on Greenland. Bessent criticized Macron for calling to conduct a NATO exercise on Greenland, saying Macron should focus on France’s budget instead.
Global bond traders closely monitoring Japan’s government bond market… A sharp rise in volatility in Japan’s government bond market could spill over into other markets, forcing some investors to cut back risk across portfolios, Citigroup Inc. said and as reported by Bloomberg. “Risk parity funds may need to sell as much as one third of their current exposure, potentially triggering up to $130 billion of bond selling in the U.S. alone, according to Mohammed Apabhai. Volatility in Japan’s bond market has been picking up since early last year amid growing fiscal concerns, with meaningful spillover impact globally, and analysts now see Japan as a major exporter of global bond volatility,” said the report. Japanese Prime Minister Sanae Takaichi’s election pledge to cut food taxes has triggered a surge in long-end yields, with 30- and 40-year bond yields jumping more than 25 basis points to fresh highs on Tuesday. With a snap election in Japan coming on Feb. 8, traders and investors are worried there will be more volatility ahead.
Natural gas futures prices spike amid Arctic outbreak… U.S. natural gas futures prices have gained more than 50% in just two days, with freezing temperatures taking hold of swathes of the country and lifting demand for heating. Contracts are on track for their biggest weekly gain in over 35 years, Bloomberg reported. Cold weather is causing energy prices to surge across the globe. Japan’s power price rose to a three-month high on Wednesday and European gas futures are up 29% so far this month. “Markets are monitoring for potential weakening of the polar vortex winds that could bring more freezing temperatures,” said the report.
Gold, silver prices surge to more record highs amid strong safe-haven demand… Gold and silver prices this week have extended their record rallies as the crisis over Greenland and a meltdown in Japanese government debt support safe-haven demand. February Comex gold futures hit an all-time high of $4,891.10 an ounce overnight, with March Comex silver futures on Tuesday hitting a new peak of $95.78 an ounce. Gold is poised for more support from central banks, with the National Bank of Poland approving plans to purchase another 150 tons and Bolivia’s central bank resuming purchases for its foreign reserves, reports said.
Malaysian palm oil futures rally… Malaysian palm oil futures rose near 1% to above MYR 4,100 per MT on Wednesday, keeping gains from the prior session as a weaker ringgit boosted export competitiveness and edible oil prices firmed on the Dalian and Chicago exchanges. Prices were further lifted by expectations of a 15%–17% drop in January output, in line with seasonal demand ahead of the Lunar New Year and Ramadan. In India, the top buyer, imports are set to rebound after plunging 20% in December to the lowest since April 2025, due to softer year-end demand and increased purchases of rival oils. Meantime, export data showed Malaysian shipments during January 1–20 grew 8.64%–11.4% from the prior month. The Malaysian Palm Oil Council projected February prices to hold between MYR 4,000 and MYR 4,300, helped by seasonal falls in output. Gains, however, were capped after Indonesia scrapped plans for a B50 biodiesel mandate this year, while crude oil prices fell sharply on stock build expectations and easing supply risks.
Cattle futures markets stabilize amid NWS concerns… February live cattle on Tuesday rose 22 1/2 cents to $232.375. March feeder cattle rose $1.225 to $357.675. The cattle futures markets saw the bulls try to stabilize their markets following last Friday’s debacle with New World Screwworm that spooked cattle traders. A “risk-off” trading mentality in the general marketplace Tuesday worked to limit buying interest in cattle futures. USDA Tuesday reported cash cattle trading last week averaged $232.50, up 64 cents from the prior week average at $231.86. World Weather Inc. said livestock stress and travel delays are expected in southern production areas Friday through the weekend due to snow, sleet, freezing rain and bitter cold temperatures.
Mild profit taking in lean hog futures; bulls remain in control… February lean hog futures on Tuesday fell 42 1/2 cents to $87.85 and hit a three-month high early on. Hog futures saw some mild and routine profit-taking pressure from the shorter-term speculators following recent strong gains. A “risk-off” trading mentality in the general marketplace Tuesday worked to limit buying interest in hog futures. The premium futures hold to the cash hog and CME index suggest futures traders look for a rebounding cash hog market in the coming weeks. The latest CME lean hog index is up $1.26 at $81.76. Today’s projected cash index price is up another 27 cents at $82.03.