Good morning!
Grain futures markets firmer overnight… As of 6:00 a.m. CST, March corn was up 1 1/4 cents, March soybeans were up 8 1/2 cents and March SRW and HRW wheat futures were 3 1/4 to 4 cents higher. The grain market bulls at mid-week appear to have stabilized prices. Last week’s lows in the grain markets are now important near-term technical support levels. More price gains to end the week would suggest last week’s lows are near-term price bottoms and that prices could then trade at least sideways, if not sideways-to-higher. The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are a bit lower early today and trading around $56.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.15 percent.
Rain coming for much of Midwest, Plains… The National Weather Service today said an upper wave will reach the Plains states overnight Wednesday, helping to organize a low-pressure/frontal system over the central/southern Plains. Increasing moist, southerly flow from the Gulf ahead of the system will lead to an expanding area of showers and thunderstorms from the central/southern Plains Thursday morning into the Midwest/Mississippi Valley throughout the day. Rainfall should generally remain modest. However, as the system moves into the lower Mississippi and Tennessee Valleys Friday, much heavier rainfall is expected, with scattered flash flooding possible, as well as a severe weather threat. Some wintry precipitation will be possible in the colder air to the northwest of the low track, generally from Nebraska northeast into the upper Midwest, though little to no accumulations are expected. The more impactful winter weather will be in the post-frontal upslope flow along the front range of the Rockies. Accumulations of several inches are possible Thursday into Friday for portions of southern Colorado into northeastern New Mexico, and possibly east into southwestern Kansas and the Oklahoma Panhandle as well. Meantime, above average temperatures are still in the forecast for much of the central to eastern U.S. this week. The trend will be for the greatest anomalies of 25-35 degrees as well as potential for a handful of record-tying/breaking daily highs to shift eastward from the Plains Wednesday to the Mississippi Valley/Midwest Thursday.
Venezuelan oil headed for the United States… President Trump late Tuesday said Venezuela would relinquish as much as 50 million barrels of oil to the US, worth roughly $2.8 billion at the current market price, announcing the cargoes would be sold with proceeds benefiting both countries. “The announcement late on Tuesday, which came with few details, marked a significant step up for the U.S. government as it seeks to extend its economic influence in Venezuela and beyond after the capture of leader Nicolas Maduro over the weekend. It’s also a blow to China, previously the top buyer of the country’s oil and a close partner,” reported Bloomberg. “I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” Trump wrote in a social media post. “This Oil will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States!” he added and as reported by Bloomberg. Chevron Corp. has a small fleet of ships sailing to Venezuela to export the country’s oil. Chevron is poised to export more Venezuelan oil this month, with at least 11 ships scheduled to arrive in Venezuelan government-controlled ports, according to preliminary data compiled by Bloomberg. The U.S. is enforcing a blockade on outgoing oil, with at least 12 vessels bound for Venezuela turning away under heavy U.S. military presence in the Caribbean.
White House says U.S. acquisition of Greenland a national security priority… “President Trump has made acquiring Greenland a national security priority of the United States,” according to White House Press Secretary Karoline Leavitt. “The president and his team are discussing a range of options to pursue this important foreign policy goal, and of course, utilizing the U.S. military is always an option at the commander in chief’s disposal,” she said Tuesday. Still, U.S. Secretary of State Marco Rubio downplayed the notion of any U.S. military action in a briefing with lawmakers on Monday, instead signaling that a U.S. invasion is not imminent and that the U.S. goal was to buy the island from Denmark. European leaders have issued a joint statement warning that the U.S. needs to respect the territorial integrity of Greenland and Denmark, and that security in the Arctic must be achieved collectively with NATO allies.
Marketplace watching increasing civil unrest in Iran… Iran is facing a new round of civilian protests challenging the country’s theocracy. Since the U.S. military captured Venezuelan dictator Nicolás Maduro, a longtime ally of Tehran, Iranian state media headlines and officials have condemned the operation. “In the streets and even in some official conversations, however, there’s a growing question over whether a similar mission could target Iran’s top officials including the supreme leader, 86-year-old Ayatollah Ali Khamenei. The paranoia feeds into wider worries among Iranians. Many fear that close U.S. ally Israel will target Iran again as it did during the 12-day war it launched against Tehran in June,” said a Bloomberg report. The U.S. for a long time has accused the Iranian-backed Hezbollah of running drug-smuggling operations to fund its operations, including in Latin America, which the group denies. Iran is roughly twice the size of Venezuela and has what analysts consider to be a much stronger military and robust security forces. “The memory of Operation Eagle Claw, a failed U.S. special forces mission to rescue hostages held after the 1979 U.S. Embassy takeover in Tehran, also haunts Washington, said Bloomberg. Israeli Prime Minister Benjamin Netanyahu did not directly link Venezuelan strongman Maduro’s detention to Iran but acknowledged the protests sweeping Tehran and other cities, saying: “It is very possible that we are standing at the moment when the Iranian people are taking their fate into their own hands.” Hours before the U.S. action in Venezuela, President Trump warned Iran that if Tehran “violently kills peaceful protesters” the U.S. “will come to their rescue.”
Eurozone inflation rate falls… Euro-area inflation has eased to the European Central Bank’s target, supporting the view of policymakers that EU interest rates can stay at current levels unless the economic outlook changes significantly. Eurozone consumer prices rose 2% from a year ago in December, down from 2.1% in the previous month and matching economists’ estimates. Core inflation, which strips out volatile food and energy costs, slowed to 2.3% annually, while closely watched services inflation also eased. Price growth has been hovering around the 2% goal for more than half a year, allowing the ECB to keep borrowing costs unchanged since June. “Economists and investors don’t envisage any further moves for the foreseeable future,” said a Bloomberg report.
China’s central bank continues stocking up on gold… China’s central bank extended its gold-buying streak to 14 months, underscoring sustained official demand for bullion as prices surge to record. Bullion held by the People’s Bank of China rose by 30,000 troy ounces last month, according to data released on Wednesday and as reported by Bloomberg. That brings total purchases since November 2024, when the current buying cycle started, to around 1.35 million ounces, or 42 tons. Gold has experienced a price-volatile run in the last few weeks, after surging to a record high last fall. Still, the metal delivered its best annual performance since 1979 on the back of central bank purchases, geopolitical angsts as well as debasement trades — a retreat from sovereign bonds and currencies for alternative stores of value.
Malaysian palm oil futures up a bit… Malaysian palm oil futures edged up to hover around MYR 4,000 per MT on Wednesday, rebounding from the prior session’s weakness. Prices found support from a softer ringgit and stronger rival edible oils in Dalian and Chicago markets, while demand expectations improved ahead of the Lunar New Year and Ramadan fasting month in February. Still, gains were capped by a sharp drop in crude oil prices following U.S. military action in Venezuela. Concerns over weaker purchases from top buyer India also lingered, after December palm oil imports fell to an eight-month low amid weaker winter consumption and higher purchases of competing oils. Meanwhile, cargo surveyors reported Malaysia’s palm oil shipments dropped 5.2%–5.8% month-over-month in the final month of 2025. Adding to caution, Reuters estimated Malaysia’s palm oil inventories likely rose to their highest in nearly seven years in December, ahead of the upcoming official monthly data.
Cattle futures markets at 10-week highs… February live cattle on Tuesday rose 75 cents to $236.625. March feeder cattle gained $3.20 to $362.175. Both markets closed at 10-week highs. The cattle futures markets saw feeders take the lead amid the New World Screwworm situation in Mexico that continues to keep Mexican cattle out of the U.S. Continued technical buying interest from the speculators is also supporting the cattle futures markets. The near-term chart postures for both live and feeder cattle futures remain firmly bullish. Higher cash cattle prices last week also supported futures prices Tuesday. USDA Tuesday reported very light cash cattle trading taking place this week at $232.00. USDA reported last week’s average cash cattle trade at $231.68—up $2.35 from the week prior.
Lean hog futures see mild profit taking… February lean hogs on Tuesday fell 47 1/2 cents to $85.675. The market saw some mild profit taking after prices on Monday hit a 2.5-month high. Hog futures bulls remain solid, however. The February lean hog futures contract is well above the latest CME lean hog index, which is bullish for futures and suggests futures traders expect the cash hog market to rally in the coming weeks. However, cash hog prices have begun to slip a bit lately. The latest CME lean hog index is down 23 cents to $81.62. Today’s projected cash index price is down 8 cents at $81.54. Tuesday’s national direct 5-day rolling average cash hog price quote is $69.40.