Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn futures were down 1/4 cent, January soybeans up 2 3/4 cents and March SRW and HRW wheat futures near down 1 1/4 to 2 cents. The grain market bulls are losing steam late this week. There are key technical support levels that lie just below present prices in most of the grain futures markets, which if breached would likely trigger pre-placed sell stop orders and provide the speculative, chart-based bears with the confidence to more aggressively play the short sides. Grain market bulls need to step up yet this week. The key outside markets early this morning see the U.S. dollar index near steady. Nymex crude oil prices are slightly higher and trading around $59.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.09 percent.
Cold temps, scattered snow showers over much of Midwest, Plains… The National Weather Service today said an active winter-like pattern continues across much of the country, with systems bringing snow to multiple places over the next couple of days. Lake-enhanced snow showers will continue for portions of the Great Lakes following the passage of one clipper-like system this morning and as another quickly approaches the region on Friday. Some moderate snow accumulations will form downwind of the Upper Great Lakes and Lake Ontario. Light snow showers will also be possible across the northern Plains today as this incoming second system passes through. Meanwhile, the departing clipper system and trailing cold front is expected to lead to a potentially impactful snow squall event today over the interior Northeast. These intense, quick bursts of heavy snow accompanied by gusty surface winds can bring sudden white-out conditions, which is particularly dangerous to those driving.To the west, a wintry mix is expected for areas of the northern/central Great Basin and northern High Plains. Wintry precipitation is expected over portions of the southern Plains this morning/afternoon, and then eastward from the Ohio Valley into the central/southern Appalachians and North Carolina/southern Mid-Atlantic overnight Thursday and into the day Friday. Temperatures remain well below average across much of the eastern and central U.S. as this winter-like pattern remains in place. Yet another cold front passage will bring some brutally cold low temperatures to portions of the Midwest this morning.
Bessent reiterates China will meet its U.S. soybean purchase commitment… China is on pace to meet its pledge to buy 12 million tons of U.S. soybeans by the end of February, U.S. Treasury Secretary Scott Bessent said on Wednesday, appearing to extend an earlier deadline for Beijing’s purchases. The Trump administration said last month that China had agreed to buy the shipments during the last two months of 2025. “I will say that China is on track to keep every part of the deal, every part of the deal,” Bessent said during an interview at a New York Times event and as reported by Bloomberg. Asked about the pace of soy purchases and the time left before the end of the year, he clarified that the target was “the end of the season, so I think that’ll be Feb. 28. They are in a perfect cadence to complete that goal,” he said. “If I look at the loadings, then their purchase by their central government is well into the correct cadence,” said Bessent.
Russia-Ukraine peace talks continue but without further progress… Ukrainian negotiators will join a new round of talks in Florida as Russian President Vladimir Putin said some of the points in a U.S.-backed peace plan were unacceptable to him, the latest sign an agreement likely remains distant. The negotiations are difficult, and Moscow disagrees with some of what’s been suggested by the US, Putin said in an interview to India Today, as cited by the state-run Tass news service and reported by Bloomberg. Putin’s comments are likely to cast more doubt over President Trump’s push to broker a peace deal after almost four years of Russia’s full-scale invasion of Ukraine. “Intense shuttle diplomacy over the past few days has failed to break the deadlock as the Kremlin presses Ukraine to hand over control of land that Moscow has failed to seize by force in the east of the country. Kyiv has repeatedly rejected that demand,” said the Bloomberg report. Trump said Wednesday that he doesn’t know what the outcome of successive rounds of talks over a deal will be, though he called the last meeting his special envoy, Steve Witkoff, and son-in-law, Jared Kushner, held with Putin in Moscow on Tuesday “reasonably good.”
China’s pork prices continue to decline, suggesting sagging consumer confidence… China’s pork prices have been declining all year are likely set to drop even lower, with government efforts to cull the breeding herd and a seasonal demand boost not enough to arrest the slide, Bloomberg reported. “Wholesale prices have dropped 18% so far in 2025 and are at the lowest level in more than three years. Consumption of China’s most popular protein normally picks up as temperatures cool, but the declines highlight how fragile consumer sentiment is at the moment. A trade truce with the U.S. has restored a semblance of economic calm, but the property-market slump and a weak jobs market mean consumers aren’t splashing out just yet. With the 5% GDP growth target for 2025 in sight, Beijing also appears likely to hold back on stimulus, although that leaves room for support early next year,” Bloomberg Economics said. China’s restaurants and retailers should be starting to stock up on supplies for winter and the upcoming holidays, when Chinese people go out for meals more and also entertain at home. But the external environment as well as an oversupply of hogs means pork prices will likely keep dropping this month, according to commodities consultancy Mysteel. Beijing has been pushing this year for major hog producers to cut their breeding herds, along with other measures to tackle oversupply. Sow numbers were down 2.1% at the end of October from a year earlier, according to government data, but the drop hasn’t been big enough to have a meaningful impact on pork prices.
Global commodity shipping rates surging… Rates to ship commodities from energy to bulk ores across the oceans are heading for a rare year-end surge as conflicts, sanctions, and swelling output upend global supply lines, according to a Bloomberg report. “Daily earnings to transport crude on key routes have seen the biggest jump this year, up 467%, while rates to ship liquefied natural gas and commodities such as iron ore have increased more than fourfold and twofold, respectively. Freight costs typically dip at year-end due to seasonal weakness in demand. Vessels are spending more time at sea transporting cargo, contributing to the spike, and several shipping executives expect tightness in the broader market to continue at least through early next year,” said the report. “We’re seeing an old school, extremely tight physical shipping market,” Lars Barstad, the chief executive officer of Frontline Management AS, which operates a fleet of oil tankers, including very-large crude carriers, said on an earnings call late last month. “We’re not seeing any kind of weakness,” he said and as reported by Bloomberg. The Baltic Freight Index, a benchmark measure for ships hauling bulk commodities, including grain and ore, rose to a 20-month high at the end of November as anticipation grew over a major iron ore project in Guinea coming online and weather-related delays off China squeezed supply. More broadly, hostilities around key routes have contributed to an overall increase in costs, said the report.
Trump wants to relax government automobile fuel efficiency standards… President Trump on Wednesday unveiled his administration’s plan to relax stringent Biden-era fuel efficiency standards to lower consumer costs. The new proposal would lower the Corporate Average Fuel Economy (CAFE) requirement to 34.5 mpg for the 2031 model year and eliminate a credit-trading program used by automakers. Critics say the proposal will encourage U.S. automakers to produce less-efficient gas guzzlers, while the Trump administration says it will save Americans $109 billion over the next five years.
Malaysian palm oil futures prices down… Malaysian palm oil futures fell over 1% to below MYR 4,150 per MT Thursday, marking a second session of losses as a stronger ringgit and weaker edible oils on the Chicago and Dalian exchanges pressured sentiment. Supply concerns added to the downside after a Reuters survey suggested Malaysian inventories likely climbed to a 6-1/2-year high in November. Exports also deteriorated, with Intertek noting a 19.7% mom fall in November shipments. Meanwhile, operational risks persisted, as a land dispute in Terengganu state could potentially disrupt production. In key consumer China, the absence of fresh stimulus heading into year-end, despite weakness in manufacturing and services sectors, further weighed on outlook. Still, losses were capped by expectations of stronger seasonal demand ahead of the Lunar New Year and Ramadan in early 2026. In India, the top buyer, November imports increased slightly as lower palm prices encouraged refiners to substitute away from costlier soyoil and sunflower oil. TradingEconomics.com
Cattle futures bulls having a good week… February live cattle on Wednesday rose $1.10 to $221.90 and closed at a three-week high close. January feeder cattle gained $1.975 to $331.85 and hit a four-week high. The cattle futures markets rallied again Wednesday on short covering and perceived bargain hunting. The much-improved near-term technical postures for live and feeder cattle futures markets are also likely inviting the chart-based speculators to more actively play the long sides. USDA reported very light cash cattle taking place so far this week at solidly higher money, with steers and heifers averaging $215.00--also supported buying interest in cattle futures. USDA reported last week’s average cash cattle trading price was $211.53, which was down $5.88 from the week prior.
Short covering in lean hog futures… February lean hogs on Wednesday rose 82 1/2 cents to $81.00. Lean hog futures saw some short covering following losses on Monday and Tuesday. The overall chart posture for the hog futures market remains bearish, which will likely limit speculator buying interest in the near term. More gains in the cattle futures markets Wednesday also supported buying in the hog futures. Steadily falling cash hog prices have constrained lean hog futures bulls. Until the cash hog market stabilizes and starts to turn back up, buyers in futures will remain timid. However, daily losses in the cash and CME lean hog index have begun to get smaller. The latest CME lean hog index is down another 6 cents to $81.61. Today’s projected cash index price is up 6 cents at $81.67. Wednesday’s national direct 5-day rolling average cash hog price quote is $69.36.