Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn futures were down 1/2 cent after hitting a two-week low Friday. January soybeans were up 3/4 cent and hit a six-week low overnight. March SRW and HRW wheat futures were down 3 1/4 cents, with HRW hitting a seven-week low overnight. All of these markets on Friday closed at technically bearish weekly low closes. That suggests the speculative, chart-based bears have a head of steam early this week, to continue to more aggressively play the short sides of the grain markets. The key outside markets early this morning see the U.S. dollar index slightly down. Nymex crude oil prices are slightly lower and are trading around $57.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.17 percent.
Warm-up this week in the Plains, Midwest… The National Weather Service today said a warm-up is in store for much of the central U.S. this week, following a frigid, snowy weekend over much of the region. Meantime, a low-pressure system will bring heavy rainfall to portions of the Pacific Northwest and northern Rockies today. Lake effect snow should begin to wrap up across the upper Great Lakes this afternoon, and then the lower Great Lakes this evening. The eastern U.S. will see below-average temperatures for much of the region through tonight, before beginning to moderate on Tuesday. Surface high pressure over the Southeast will generate freezing temperatures across the Gulf Coast. Freeze warnings are in effect from southeastern Texas to southern Georgia/northern Florida. Elsewhere, upper ridging in the West will expand east over the coming days. Several temperature records may be tied or broken across the West due to the unusually warm conditions.
U.S., Ukraine, EU officials holding more peace talks in Berlin… Ukraine and the U.S. are due to hold a second day of talks in Berlin, Germany on a plan aimed at ending Russia’s war, with allied security guarantees for Kyiv a central focus of the negotiations, reports Bloomberg. About 10 European leaders are also expected to attend a summit today, together with NATO Secretary General Mark Rutte and European Commission President Ursula von der Leyen. Ukraine President Volodymyr Zelenskiy and his team held more than five hours of talks at Germany’s Federal Chancellery on Sunday with U.S. officials led by special envoy Steve Witkoff and Jared Kushner, President Donald Trump’s son-in-law. The sides discussed Ukraine’s territory as the U.S. is backing a Russian demand for Kyiv to withdraw from areas of its eastern Donetsk region that Moscow’s forces have failed to seize since 2014, a person familiar with the matter said. Zelenskiy repeatedly rejected the demand and together with European allies is insisting on a ceasefire along the current line of contact, the person said, asking not to be identified discussing sensitive issues and as reported by Bloomberg. The Ukrainian president signaled that Kyiv could step back from its long-term goal of joining NATO if it reached bilateral security agreements with the US, European and other states, potentially including Canada and Japan. Those agreements would function similarly to NATO’s Article 5 mutual-defense commitment to prevent “another coming of Russian aggression,” Zelenskiy told reporters on Sunday.
U.S. to remove Belarus potash sanctions… The U.S. will remove sanctions on Belarusian potash fertilizers, the key source of foreign-currency revenue for the Russia-aligned nation before Western restrictions stifled their flow, Bloomberg reported. President Trump ordered the sanctions lifted, effective immediately, the Belarusian state-owned news agency Belta cited his special envoy, John Coale, as saying in Minsk on Saturday and as reported by Bloomberg.
“This is a very good step by the United States for Belarus,” Belta cited Coale as saying following two days of talks in the Belarusian capital. “We are lifting them now.” The U.S. may ease more restrictions as its relations with Belarus normalize, potentially reaching the point where no sanctions will remain, Coale said, according to Belta. The announcement follows Trump’s push to rebuild ties with authoritarian Belarusian President Alexander Lukashenko, a close ally of Russian President Vladimir Putin. “Washington’s move to lift sanctions may do little to weaken that link unless the European Union lifts its own ban. EU restrictions forbid the flow of Belarus-made potash through Lithuania — once the key export hub for the fertilizers — to the Baltic Sea port of Klaipeda,” said Bloomberg.
Warsh, Hassett are top Trump choices for Fed Chair…President Trump said Kevin Hassett and Kevin Warsh are his top choices to lead the Federal Reserve and that he expects the next chair of the central bank to consult with him on interest rates, Bloomberg reports. Trump, in an interview with the Wall Street Journal Friday, indicated that Warsh, a former Fed governor, has climbed up the short list of contenders to challenge Hassett, the White House National Economic Council head whom many had seen as the frontrunner for the job. “I think the two Kevins are great,” he said. “I think there are a couple of other people that are great.” Trump previously signaled that he already made up his mind, saying Monday he had a “a pretty good idea” of who to nominate. The president last month also said he knew who he would pick for the job. The latest comments suggest that the selection process remains in flux.
More signs of a global crude oil glut… The Middle Eastern crude oil market has weakened on concerns that regional supplies will outstrip demand, adding to signs of a softening global picture, Bloomberg said in a report. The premium of Abu Dhabi’s flagship Murban over Brent has declined to the narrowest since early October, signaling concern that too much crude is being offered in the Middle East. The International Energy Agency forecasts there will be a record global crude glut next year, with the surplus in the oil market set to grow further in 2026.
China’s industrial output growth hits 15-month low… China’s industrial production rose 4.8%, year-on-year, in November, easing from 4.9% growth in October and missing forecasts of 5.0% growth. It marked the slowest yearly increase since August of 2024 amid softer manufacturing and utility output. Meanwhile, China’s retail sales grew by 1.3%, below estimates of 2.9% growth and the weakest gain since December of 2022, despite ongoing consumer subsidy programs. TradingEconomics.com
NOPA monthly crush report out today… The National Oilseed Processors Association monthly crush report for November is due out late this morning.A Bloomberg survey of analysts expects, on average, the monthly U.S. soybean crush to be at 220.7 million bushels, which compares to 227.6 million bushels in the October NOPA report and 193.2 million bushels one year ago. Soybean oil stocks are seen at 1.363 billion pounds in November versus 1.305 billion pounds in the October report and 1.084 billion pounds one year ago.
Malaysian palm oil futures trade near steady… Malaysian palm oil futures were little changed Monday, hovering near MYR 4,020 per MT following a sharp drop in the prior session as bargain hunting emerged after prices slid to a two-week low. Traders continued to assess confirmation from the U.S. Department of Agriculture regarding private export sales of 132,000 metric tons of U.S. soybeans to China for delivery in the 2025/26 marketing year, a factor that could influence competing vegetable oil markets. Investors also digested weak activity data from China, a key buyer, where November industrial output and retail sales growth fell short of forecasts amid persistent domestic and external headwinds. Meanwhile, data released last week by the Malaysian Palm Oil Board showed November crude palm oil production fell 5.3% mom to 1.94 million MT. However, end-November stocks jumped 13% to 2.84 million MT, the highest in 6-1/2 years, on robust full-year output that is on track to top 20 million MT for the first time ever.
Cattle bulls looking good to start trading week… February live cattle futures on Friday fell $1.40 to $229.55 but for the week rose $2.40. January feeder cattle futures closed down $4.30 at $339.10 and the week were up 45 cents. The cattle futures markets Friday saw some routine profit-taking pressure from recent solid gains and after both markets hit six-week highs last Thursday. Solidly higher cash cattle trade last week and bullish technical charts should keep selling interest in cattle futures limited in the near term. Active cash cattle trading late last week saw USDA report steers fetched an average price of $229.78 and heifers $230.28. That is well up from last week’s average cash cattle trade reported by USDA at $221.21.
Lean hog futures bulls have technical momentum… February lean hog futures on Friday rose 35 cents to $84.525, hit a six-week high and for the week were up $2.25. Friday’s technically bullish weekly high close and bullish near-term chart posture for lean hog futures set the futures market up for more speculator buying interest this week. The cash hog market has stabilized and has started to creep higher, which is also bullish for futures. The latest CME lean hog index is up 41 cents to $82.57. Today’s projected cash index price is up 23 cents to $82.80. The national direct five-day rolling average cash price Friday is $71.60.