Good morning!
Grain futures weaker overnight… As of 6:00 a.m. CST, December corn was down 1 cent and hit a nearly four-week low. January soybeans were 3 1/2 cents lower. December HRW and SRW wheat futures markets were down 1 1/2 to 2 1/2 cents and hit three-week lows. The grain futures markets bulls are fading late this week and it appears the markets may be headed for technically bearish weekly low closes this afternoon—unless the bulls step up today and buy the dips. The near-term technical postures for corn and winter wheat futures have deteriorated this week, while the soybean and meal bulls are now looking exhausted after their recent price rallies. The key outside markets early this morning see the U.S. dollar index slightly higher. Nymex crude oil prices are lower, hit a four-week low and are trading around $57.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.065 percent.
Showers in the Midwest, Plains today amid a late-week warm-up… The National Weather Service today said an active southern stream of the upper jet will continue over the next few days, supporting a wet weather pattern from southern California, portions of the desert Southwest, into the central and southern Plains, mid-Mississippi Valley, Ohio Valley and Mid-Atlantic.A low-pressure system developing over the central Plains continues to support heavy rain and thunderstorms with threat of flash flooding mainly across the ArkLaTex region. This system will then track steadily eastward through the eastern U.S. and off the Mid-Atlantic coast Saturday morning, producing a swath of light to moderate rain stretching from the central Plains through the Ohio Valley, central Appalachians and into the Mid-Atlantic today through Saturday morning. Most of the Lower 48 states will have above-average temperatures late this week into this weekend. Record warmth will continue for areas along the Gulf Coast, lower Mississippi Valley and Southeast over the next two days.
U.S. stock market volatility heats up… The U.S. stock indexes on Thursday experienced their most dramatic intraday price reversals since April, with benchmark indexes falling to their lowest levels in more than two months. “Theories for the sell-off include resurfacing concern around artificial-intelligence projects, a strong delayed U.S. jobs report, and a risk-off signal sent by the drop in Bitcoin. The intraday slide wiped out an early feeling of optimism that U.S. equities would continue a rebound from a sell-off that followed the market’s last record highs near the end of October,” said a Bloomberg report. “What at first appeared to be a blowout earnings report from Nvidia Corp., the chipmaker at the epicenter of the AI race, and a quarterly update from Walmart Inc. that showed consumers are still spending, were quickly overshadowed by a sudden, relentless bout of selling” on Thursday, said the report. Goldman Sachs said that since 1957, there have been eight instances, including Thursday’s, in which the S&P 500 opened more than 1% higher only to reverse and close in the red. Nvidia was the biggest drag on the Nasdaq 100 Thursday, erasing an early 2.4% gain to drop 3.2% in a rout that wiped out almost $400 billion from its intraday high, said Bloomberg. U.S. stock indexes were narrowly mixed overnight, while Asian and European stock markets were down.
European leaders to talk with Ukraine’s Zelenskiy on U.S., Russian-backed ceasefire plan… German Chancellor Friedrich Merz Friday is expected to hold an urgent call with Ukrainian President Volodymyr Zelenskiy and other European leaders regarding a U.S.-Russian plan to end the war in Ukraine that would mean sweeping concessions to Russia. France’s Emmanuel Macron and Keir Starmer of the U.K. will also join the call at midday European time, two government officials said and as reported by Bloomberg. “While the U.S. and Russia have largely sidelined European countries in their push to end the war, Europe’s response to their proposal will be critical in shaping Ukraine’s next move. The European Union has been struggling to agree on a mechanism that would unlock about €140 billion ($160 billion) to sustain the Ukrainian war effort as the U.S. dials back its support for Kyiv.” European leaders are also trying to arrange a call with the US to discuss the initiative, another person said. The 28-point peace plan floated by U.S. and Russian envoys would force Ukraine to cede large chunks of its territory taken by Russia, cap the size of its military and lift sanctions on Moscow over time. Zelenskiy said on Thursday he’s agreed to work on the plan and expects to discuss details with President Trump in the coming days. At the same time, he stressed in his nightly address that the proposals are just a starting point for talks, not a take-it-or-leave-it proposition, the Bloomberg report said. “Many details of the plan are proposals that have been vehemently rejected by Ukraine and its allies in the past. NATO member states may also object, given that the plan would curtail the defense alliance’s ability to admit new applicants as it sees fit. Such a move would need the buy-in of all 32 of its members,” said Bloomberg.
U.S. expanding tariff relief for Brazil food imports… President Trump is expanding tariff breaks for imported Brazilian food products, widening the scope of relief from import taxes amid growing U.S. consumer dissatisfaction over the cost of living. An executive order Trump signed on Thursday would exempt dozens of popular food items from a 40% levy he imposed on goods from Brazil earlier this year. Last week, the president knocked a separate 10% duty off those items, but did not originally include the higher rate, which was intended to punish the country over its prosecution of former President Jair Bolsonaro. The changes are retroactive to Nov. 13. The U.S. decision could help bring down prices of coffee, orange juice and beef, in particular. Brazil is the world’s largest exporter of coffee and beef. Prior to the implementation of tariffs, it was the largest supplier of coffee to the U.S. Shipments of Brazilian beef to the U.S. had also been increasing before the levies, due to a cattle shortage that had affected the North American industry. The U.S. move was greeted warmly by the Brazilian Beef Exporters Association and Marcos Matos, director general of coffee exporters group Cecafé.
USDA cattle-on-feed report out this afternoon… Cattle futures traders this afternoon will get their first USDA monthly cattle-on-feed report since September 19. Today’s COF data is expected by analysts to show the total number of U.S. cattle on feed as of November 1 at 97.9% of last year. October placements are expected to be around 92.2% of last year and October marketings at 92.5% of last year. The COF report is the first one after the U.S. government shutdown.
USDA this week released a list of dates for other scheduled reports, following the government shutdown.
Malaysian palm oil futures trade near steady… Malaysian palm oil futures were little changed, hovering around MYR 4,150 per MT on Friday, stabilizing after sharp losses in the previous session. Traders weighed signs that production is gradually entering lower-output months against a stronger ringgit and weakening export momentum. Cargo surveyors estimated that Malaysian palm oil shipments for November 1–20 fell between 14.1% and 20.5% from the prior month. Still, the benchmark contract is on track for a second weekly gain, up about 0.5% so far, supported by expectations of a nearly 20% rebound in palm oil imports in top buyer India during the new marketing year, as competitive prices help the tropical oil regain market share. Meanwhile, the planned rollout of B50 in Indonesia in H2 2026 may tighten global supply, with the domestic industry association projecting prices could rise toward MYR 5,000 and potentially cut Indonesia’s total exports to 26 million MT in 2026, from an estimated 31 million MT this year.
The bleeding continues in cattle futures markets… December live cattle on Thursday fell $1.575 to $214.725 and hit another 4.5-month low. January feeder cattle lost $5.075 to $316.375. The cattle futures markets saw more technical selling pressure. Weakening cash cattle prices this week also have the speculative bears confident to continue to play the short sides of the markets. USDA Thursday reported more active cash cattle trading so far this week, with steers averaging $218.30 and heifers averaging $219.06. That’s well below last week’s USDA average cash cattle trading price of $225.06. Cattle futures traders are awaiting this afternoon’s USDA monthly cattle-on-feed report. Past months’ COF reports have been bullish, so the cattle futures bulls are hoping for the same this afternoon, in order to help stop the bleeding in futures markets.
More short covering in lean hog futures… December lean hogs on Thursday rose 62 1/2 cents to $79.475. The hog futures market saw more short covering. However, gains were limited by steadily declining cash hog prices and recently weakening pork cutout values. Lean hog futures’ discount to the cash market also worked in the hog futures bulls’ favor Thursday. The latest CME lean hog index is down another 40 cents at $86.27. Today’s projected cash index price is down 56 cents to $85.71. Thursday’s national direct 5-day rolling average cash hog price quote was $75.29.