Good morning!
Grain futures weaker overnight… As of 6:00 a.m. CST, March corn futures were down 3/4 cent, January soybeans down 5 1/4 cents and hit another five-week low, and March SRW and HRW wheat futures down 2 to 3 1/2 cents. After corn posted good gains Tuesday, bulls could not show any follow-through strength overnight. Thus, the choppy and sideways trading is likely to continue. If corn bulls can put together two sessions in a row of decent price gains, it would be one early clue the market might be able to sustain a price uptrend. Soybean and meal prices are trending down and the bears are in near-term technical control. However, Relative Strength Index readings in both markets are now into oversold territory.In past months, when RSI readings reached the levels they are presently, both markets put in near-term price bottoms. March SRW wheat is headed for its sixth straight losing session today as both SRW and HRW are in near-term price downtrends. The key outside markets early this morning see the U.S. dollar index slightly down. Nymex crude oil prices are up a bit and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.21 percent.
Howling winds, snow, freezing rain in Midwest, Plains… The National Weather Service today reported a strong clipper system located over the upper Midwest is forecast to pivot into the interior Northeast today, ushering wintry weather and gusty winds into the region. At the end of the work week, yet another clipper will follow on the heels of this system, bringing with it the chance for freezing rain and heavy snow from the northern High Plains into the Ohio Valley. In advance of this upcoming system, a handful of winter storm watches are posted for eastern Montana. Meanwhile, a prolonged atmospheric river continues to produce heavy rain in the Pacific Northwest and lower elevations of the northern Rockies. Temperatures over Midwest and Plains will be below average in the coming days. Yet another intrusion of frigid Arctic air into the Northern Plains will translate to daily high temperatures which struggle to break into the teens on Friday.
Federal Reserve interest rate decision this afternoon… The Federal Reserve’s Open Market Committee (FOMC) meeting that began Tuesday morning ends this afternoon with an FOMC statement and then a press conference from Fed Chair Jerome Powell. Markets have priced in a 90% chance of a 0.25% interest rate cut from the Fed. However, the FOMC statement’s and Powell’s guidance on the trajectory of Fed monetary policy are what the marketplace will be very closely watching today. Market expectations have grown that the FOMC and Powell will lean more hawkish on U.S. monetary policy due to worries about sticky inflation.
Rising global bond yields suggest end to central bank rate cuts… Global bond yields have risen to highs last seen in 2009, signaling concerns that interest-rate-cutting cycles from major central banks may be ending soon, according to a Bloomberg report. Yields on a Bloomberg gauge of long-dated government bonds have hit 16-year highs, with money market bets underscoring that sentiment and traders pricing virtually no more rate cuts from the European Central Bank. “Bond investors are now mulling the outlook for global growth, examining inflation risks amid trade tariffs and surging government debt. Even in the U.S., where the Fed is expected to cut rates today, the outlook is rapidly evolving,” said the report. “Yields on 30-year Treasuries have climbed back to multi-month highs as investors eye a less benign outlook for monetary policy, inflation and fiscal discipline. The market shift reflects growing conviction that the interest-rate-cutting cycle, introduced last year to spur economic growth and has in the process propelled global stocks to record highs and boosted bond prices, is ending soon.”
China’s consumer inflation rate hits 21-month high… China’s consumer inflation rate surged to 0.7% in November, month-on-month, the highest since February of 2024 and versus the 0.2% rise in October. Food prices increased for the first time in 10 months and non-food inflation also rose. In contrast, China’s producer prices fell 2.2%, year-on-year, steeper than the expected 2% drop and extending China’s deflationary price pressures for the 38th month. TradingEconomics.com
USDA’s October U.S. soybean crush data expected to be record-strong… The U.S. soybean crush in October likely hit a record 7.027 million short tons, or 234.2 million bushels, according to analysts surveyed ahead of today’s monthly NASS crush report for October, and as reported by Reuters. “If the average of estimates gathered from seven analysts is realized, the crush would be up 8.6% from the 215.8 million bushels processed in October 2024, according to USDA data. Crush estimates ranged from 229.9 million to 242.5 million bushels, with a median of 233.3 million bushels,” said the report. The monthly USDA Fats & Oils report is scheduled for release at 2 p.m. CST today. The report will include the October crush, as well as data for September that was not released due to a U.S. government shutdown. Analysts surveyed by Reuters had forecast the September crush at 6.163 million short tons, or 205.4 million bushels, which would be a record for the month of September. U.S. soyoil stocks as of October 31 are estimated at 1.717 billion pounds, based on the average of estimates from three analysts. Estimates ranged from 1.600 billion to 1.775 billion pounds, with a median of 1.775 billion pounds, said the Reuters report.
USDA Secretary Rollins, HHS Secretary Kennedy to make “major” MAHA agriculture announcement today… U.S. Secretary of Agriculture Brooke Rollins, U.S. Health and Human Services Secretary Robert F. Kennedy Jr., and the Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz will make an agriculture announcement in effort to Make America Healthy Again (MAHA), according to a USDA press release issued Tuesday afternoon. “Secretary Rollins, Secretary Kennedy, and Dr. Oz will deliver a major announcement tomorrow as part of the Administration’s ongoing commitment to the Make America Health initiative,” said the press release. Time of the announcement is 8:50 a.m. CST today.
CFTC to be caught up on COT reports by end of this month… The Commodity Futures Trading Commission said in a press release Tuesday it is accelerating the publication its Commitments of Traders reports that were interrupted during the U.S. government shutdown. The revised timeline will eliminate the report backlog by Dec. 29. The CFTC previously projected data to be current by January 23, 2026. “The reports will continue to be published in chronological order at an increased frequency while maintaining data integrity. This process is consistent with prior post-shutdown publishing,” said the press release. Click here for the latest revised publication schedule.
Malaysian palm oil futures weaker… Malaysian palm oil futures traded lower on Wednesday, hovering below MYR 4,100 per MT after a modest gain in the prior session. Pressure grew after monthly data from the Malaysian Palm Oil Board (MPOB) showed end-November stocks jumped 13.0% from October to 2.84 million MT, the highest level in 6-1/2 years and above Reuters’ forecast of 2.66 million MT. Weakness in rival soyoil in Chicago also weighed on sentiment, even as reports suggested Argentina may lower export taxes on grains, including soybeans and corn, potentially boosting competition. Still, losses were limited by a weaker ringgit and optimism over seasonal demand ahead of Lunar New Year and Ramadan. The MPOB report also indicated palm oil output fell 5.3% to 1.94 million MT in November, while exports slumped 28.1% to 1.21 million MT.
USDA forecasts lower cattle, hog prices… USDA in its monthly supply and demand report (WASDE) Tuesday forecast cattle prices “will be lower for 2025 and 2026 based on recent price data and the announcement of reduced slaughter plant capacity expected to occur in early 2026. Hog prices are reduced in the fourth quarter of 2025 and first quarter of 2026 based on recent prices, but outlying forecasts remain unchanged. Broiler price forecasts for 2025 and 2026 remain unchanged. The turkey price forecast for the fourth quarter of 2025 is raised on recent prices, with tightening supplies expected to support prices during the first quarter of 2026. Egg price forecasts for 2025 and 2026 are unchanged,” said USDA.
Cattle futures bulls in good shape at midweek… February live cattle on Wednesday rose 27 1/2 cents to $226.95 and hit a five-week high. January feeder cattle fell 15 cents to $335.50. The live cattle futures market on Tuesday saw light chart-based buying as the technicals have turned more positive. Feeders futures traders paused. Selling interest in cattle futures was limited by the solidly higher cash cattle trade last week. Also, very light trading so far this week sees cattle coming in at higher money. USDA at midday Tuesday reported very light cash cattle trading taking place at $222.00. The average cash cattle trade for last week was $221.21, which is up $9.68 from the prior week’s average of $211.53.
Mild profit taking in lean hog futures… February lean hogs on Tuesday fell 52 1/2 cents to $81.875 but closed near the daily high. Hog futures saw some mild profit taking following recent good gains. Bullish traders are thinking the cash hog market has put in a seasonal bottom, which is keeping a floor under futures prices. Also, lean hog futures prices are trending up on the daily bar chart, which is inviting chart-based speculators to play the long side. The latest CME lean hog index is up 3 cents to $81.84. Today’s projected cash index price is up 5 cents at $81.89. Tuesday’s national direct 5-day rolling average cash hog price quote is $70.66.