Good morning!
Grain futures mixed overnight… As of 6:15 a.m. CST, March corn was down 3/4 cent. March soybeans were 3 1/4 cents higher and trading at a two-month high. March SRW and HRW wheat futures were up 1 to 2 cents. The grain market bulls have had a good week, led by soybeans. The soybean meal market has come back to life, which needed to happen to recharge the soybean bulls. Icing on the cake for the grain bulls this week would be producing technically bullish weekly high closes today. The key outside markets today see the U.S. dollar index near steady, with crude oil slightly up and trading around $63.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.2 percent.
Warmer in the Midwest; cold and windy in Northeast… The National Weather Service today reported an amplified upper-ridge to the west will continue to lead to well-above-average temperatures across much of the central and western U.S. heading into the weekend. The greatest anomalies are expected across portions of the northern to central Plains as highs rise into the 50s, 60s, and even low 70s, upwards of 30-40 degrees above early February averages. The Mississippi Valley will see a colder Friday with 20s and 30s north and 40s and 50s south. Meantime, a quick-moving clipper system sweeping across the Great Lakes into the Northeast/Appalachians will bring widespread light to moderate snow today. Very strong winds will accompany the system, with gusts as high as 60 mph expected, especially through the Mid-Atlantic. Forecast highs Saturday will drop into the single digits, teens, and 20s. In the West, a series of Pacific systems will bring a flow of increased moisture/atmospheric river into western Washington today and to the rest of the Pacific Northwest by Saturday. The moisture will spread further inland across the northern Great Basin and into the northern Rockies later Saturday and into early Sunday. Elsewhere, some widely scattered showers and thunderstorms will be possible later Saturday and into early Sunday across portions of the Southwest and west Texas. Conditions will remain cold more broadly across the eastern U.S.
Iran, U.S. begin negotiations today… Iran and the U.S. are set to start negotiations today to de-escalate tensions that have threatened to spiral into war, with Tehran saying the talks will be the first stage of a longer diplomatic process, Bloomberg reports. The meeting in Oman’s capital of Muscat will focus on broad topics rather than finer details and are expected to clarify a road map for further talks, the Islamic Republic News Agency reported early Friday. The U.S. delegation is expected to be led by Steve Witkoff, a special envoy for President Trump, and Iran’s by Foreign Minister Abbas Araghchi. Iran’s main priorities include “assessing the other side’s goodwill and seriousness,” IRNA said. “The road map for negotiations appears set to become clearer once this round concludes.” Trump has threatened Tehran with military strikes if it doesn’t agree to a deal, with Iran warning that any attack would trigger a regional war engulfing Israel and the U.S. The U.S. today urged any of its citizens in Iran to leave or stockpile food and water if they’re unable to do so. It’s unclear how many Americans are still in Iran, but the number is probably small, Bloomberg said.
U.S., Argentina finalize trade deal; more Argentine beef coming to U.S. … Argentina and the U.S. agreed to scrap hundreds of tariffs on each other’s goods in a trade and investment deal inked Thursday, a major step in President Javier Milei’s push to open up the historically protectionist South American economy, said a Bloomberg report. The U.S. agreed to eliminate over 1,600 reciprocal tariffs on Argentine goods while Milei’s government will terminate more than 220 levies on U.S. products, Argentina’s foreign ministry said in a statement. Argentina will be able to export 100,000 tons of beef to the U.S. with preferential access as part of the agreement, up from the current quota of 20,000 tons, according to the foreign ministry’s statement. The quota increase amounts to an extra $800 million, officials estimated. “That detail could revive tensions between Trump and some Republican lawmakers, who sought to protect U.S. ranchers from more competition from Argentine beef last year. Argentina will also increase its imports of American beef, cars and agricultural products,” said Bloomberg.
AGCO sees better times ahead… A long-awaited recovery in the farm sector appears to be in sight as AGCO Corp., one of the world’s biggest agriculture equipment makers, is predicting an increase in sales for the first time in three years, Bloomberg reported. The manufacturer of Massey Ferguson and Fendt tractors estimated 2026 net sales just above last year, according to a Thursday statement. While the sale of new machines is set to remain sluggish, growers need to update soon and are increasingly retrofitting existing equipment with artificial-intelligence packed components that help them more precisely plant, treat and harvest fields. “The future looks brighter,” Chief Executive Officer Eric Hansotia said on a call with investors. Last year “was the bottom of the trough, and the fleets in our major markets are at the peak of their age.” AGCO shares rose as much as 5.6% to the highest level in two years, before paring gains. For 2026, net sales could rise to between $10.4 billion and $10.7 billion, AGCO said. That’s above a Bloomberg estimate of $10.07 billion and surpasses sales in the year ended Dec. 31 of $10.08 billion.
FAO food price index dips… The United Nations’ Food and Agriculture Organization (FAO) Food Price Index slipped 0.4% to 123.9 points in January, marking a fifth consecutive monthly decline and a fresh low level since August of 2024. Sugar prices declined 1%, driven by expectations of increased global sugar supplies in the current season, largely underpinned by a significant production rebound anticipated in India and favorable prospects in Thailand.Dairy costs tumbled 5%, the seventh consecutive monthly decline, driven largely by lower world cheese and butter prices. Meat declined 0.4%, the lowest since May of 2025, mainly reflecting lower pork prices, while quotations for bovine and ovine meats remained broadly stable. In contrast, cereal costs edged up 0.2%, reaching the highest since May of 2025. Barley prices increased modestly and rice was up 1.8%, reflecting firmer demand, while wheat prices declined 0.4%. Oil prices also jumped 2.1%, amid higher world prices of palm, soy and sunflower oils, which more than offset lower rapeseed oil quotations, said the FAO.
China’s largest hog breeder has successful stock listing in Hong Kong… Muyuan Foods Co. plans to partner with Asian hog farmers and enhance its global feed-grain supply network after raising HK$10.7 billion ($1.4 billion) in Hong Kong’s biggest listing of the year so far, Bloomberg reported today. China’s largest hog breeder is looking to expand in Southeast Asia over the next three to five years, its chief financial officer said, in a move that will bolster regional biosecurity and help the company to diversify beyond an oversupplied domestic market. Muyuan also aims to build procurement teams in major grain- and oilseed-exporting nations like Brazil to ensure a steady supply of feed ingredients, Gao Tong told Bloomberg in an interview. “We hope to improve our globalized supply chain through this Hong Kong listing,” he said. “The proceeds will enable the company to expand overseas at a time when China – the world’s largest pork producer – is suffering from excess supply and declining prices at home. Farmers have also faced increased volatility in the global supply chain, with soybeans – a key ingredient in pig feed – becoming a flashpoint in trade tensions between Beijing and Washington,” said Bloomberg.
Malaysian palm oil futures prices fade to end trading week… Malaysian palm oil futures slipped for a second session Friday, to below MYR 4,200 per MT, rattled by weakness in rival edible oils on the Dalian and Chicago exchanges. The benchmark contract is set for its first weekly decline in five, down nearly 1%, as traders turned cautious ahead of the Malaysian Palm Oil Board’s data due February 10. Sentiment was further restrained by upcoming CPI and PPI readings in China, the top buyer, while crude oil also headed for its first weekly decline in several weeks ahead of key talks. Losses were capped by a weaker ringgit and stronger shipment data, with cargo surveyors reporting January exports up 14.9–17.9% month-on-month, driven by restocking ahead of the Spring Festival and Ramadan. Demand from top consumer India also improved in January, with imports surging 51% to a four-month high after the prior fall. Reuters projected Malaysia’s inventories likely halted a 10-month rise in January, as strong exports met a seasonal output slowdown.
Cattle futures see heavy profit-taking pressure… April live cattle on Thursday fell $6.20 to $235.60 and hit a three-week low. March feeder cattle lost $6.00 to $364.075. The cattle futures markets saw heavy profit-taking pressure from the speculators. Beef packer margins that are in the red and declining boxed beef prices late this week were also negatives for futures. USDA Thursday reported very light cash cattle trading so far this week, with steers averaging $240.00 and heifers averaging $235.00. Last week’s average cash cattle trade was $239.44, up $4.74 from the week prior’s average cash trade at $234.70.
Mild profit taking in lean hog futures… April lean hog futures on Thursday fell 7 1/2 cents to $98.375. Hog futures saw some more mild profit-taking pressure after hitting a contract high Wednesday. The sharp losses in cattle futures kept the hog futures bulls timid. April futures’ big premium to the cash market still suggests futures traders look for more upside for the cash hog market in the coming weeks. The latest CME lean hog index is up 23 cents at $86.06. Today’s projected cash index price is up 32 cents at $86.38. The national direct five-day rolling average cash hog price quote Thursday was $62.81.