Good morning!
Grain futures steady-mixed overnight… As of 6:00 a.m. CST, March corn was unchanged. March soybeans were up 3 cents. March SRW and HRW wheat futures were down 1/2 cent to up 1 1/4 cents. Corn on Monday led losses in the grains, on talk that China could release more of its domestic grain reserves. March corn has dropped back to the middle of its two-month-old trading range. Soybeans and meal are hovering just above their December lows. Winter wheat bulls have lost the modest momentum they had gained, especially SRW, which is trading not far above its contract low scored in December. The key outside markets today see the U.S. dollar index near down a bit. Nymex crude oil futures prices are slightly higher early today and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.12 percent.
Calmer weather conditions for Plains, Midwest… The National Weather Service today said much of the U.S. mainland will enter a period of relative tranquil weather. However, a surge of arctic air behind the intense cyclone will invade much of the eastern two-thirds of the country. In the process, the lake-effect “snow machine” will remain active downwind from the Great Lakes and will be reinforced with the arrival of an Alberta clipper later today. Areas across the upper Midwest to the far northern Plains as well as interior New England can expect snow showers from the clipper, although winter weather impacts appear to be minor. Meanwhile, blustery winds today will add to the arctic chill across the entire eastern U.S., with low temperatures reaching the freezing mark as far south as the Florida Panhandle early this morning, prompting freeze warnings. Milder-than-normal temperatures will quickly spill into the northern and central Plains today behind a warm front, with the aforementioned Alberta clipper approaching the U.S.-Canadian border.By Wednesday, the mild air will be shoved farther south into the central Plains as a reinforcing shot of arctic air reaches into the upper Midwest and the Great Lakes behind the clipper.
Russia-Ukraine peace initiative faces potential setback… President Trump’s campaign to end the war in Ukraine faced new complications when Russian President Putin said he would revise his country’s negotiating position after claiming Ukrainian drones targeted his residence. Ukrainian President Zelenskiy dismissed the Russian claims as a “new lie” and warned that Moscow could be using it as an excuse to prepare an attack on government buildings in Kyiv. Putin told Trump that Moscow intends to work closely with the U.S. on peace efforts but would reconsider previously reached agreements, and the two leaders agreed to maintain their dialogue. Putin told Trump of his decision in a call Monday, according to the Kremlin, even as Kyiv cast the Russian allegations as a fabrication aimed at derailing the peace process. Trump addressed the dispute while speaking to reporters in Florida, saying that Putin had told him about the purported attack during their discussion. Bloomberg
U.S. military strikes dock area inside Venezuela… President Trump said the U.S. military struck a facility inside Venezuela, in what would be a significant escalation in its campaign against drug trafficking operations there. “There was a major explosion in the dock area where they load the boats up with drugs,” Trump told reporters Monday, confirming comments from last week, Bloomberg reported. The U.S. also carried out another strike on an alleged drug boat in international waters, with the military saying the operation killed two drug traffickers. Trump said he had spoken with Nicolas Maduro “pretty recently,” but dismissed the conversation as unproductive, saying “Nothing much comes of it.” CNN, citing unnamed sources, reported Monday night that earlier this month the CIA carried out a drone attack on a dock along the Venezuelan coast that U.S. authorities believe was tied to a drug gang, Bloomberg said.
China-Taiwan tensions rising… China fired dozens of rockets into waters near Taiwan as part of its most expansive exercises in decades, testing President Trump’s support for the self-ruled island after a major U.S. weapons sale. “The People’s Liberation Army conducted a second day of snap drills on Tuesday, simulating a blockade of one of the world’s busiest shipping lanes, as part of live-fire exercises encircling the global chip hub. For the first time since then-House Speaker Nancy Pelosi visited Taipei over three years ago, China announced drill zones cutting into Taiwan’s territorial waters and no-fly warnings for the affected areas,” Bloomberg reported. Flights to Taiwan’s offshore outposts were disrupted, while international routes went mostly undisturbed. China’s latest exercises – dubbed Justice Mission-2025 – come as President Xi Jinping ramps ups pressure on self-ruled Taiwan in an attempt to further isolate the island. That includes launching a campaign against Japanese Prime Minister Sanae Takaichi, after she suggested Tokyo could deploy its military with other nations if China attacked Taiwan, which Beijing considers its own territory.
China says it wants better relations with United States… China has called for a new model for its engagement with the U.S., seeking to cement a recent thaw with the Trump administration while reinforcing its red line on Taiwan. Chinese Foreign Minister Wang Yi proposed “a new paradigm of positive interaction” with Washington, but reiterated Beijing’s opposition to U.S. arms sales to Taiwan and the importance of the “reunification of Taiwan.” Beijing’s calls for more stable U.S. ties build on a one-year trade truce struck with Washington, with diplomatic momentum expected to build through 2026, including visits by Trump to China and Xi to the U.S. “We will promote the healthy, stable, and sustainable development of China-U.S. relations,” Yi said in a speech at a symposium about foreign relations on Tuesday. He added that China will remain engaged with the U.S. on the basis of mutual respect but will not “yield an inch” on core interests, Bloomberg reported.
Update on South American corn, soybean crops… Pro Farmer crop consultant Michael Cordonnier has increased his Brazil soybean production estimate by 1.0 million MT, to 178.0 million MT, with a neutral-to-higher bias. “The increased production estimate is the result of good early yield reports out of Mato Grosso and improved rainfall in the southernmost state of Rio Grande do Sul, which will likely be the second-largest soybean producing state in Brazil this year after Mato Grosso,” he said in his weekly report. The Brazil soybean harvest has started in isolated areas of western Parana and western and central areas of Mato Grosso. Nationwide, less than 1% of the soybeans have been harvested. Meantime, Cordonnier’s 2025/26 Brazil corn production estimate was left unchanged at 137.0 million MT, with a neutral bias. Cordonnier’s 2025/26 Argentina soybean estimate was left unchanged this week at 49.0 million MT, with a neutral-to-higher bias. Soybean planting in Argentina reached 75.5% as of the middle of last week. This represents an advance of 8% for the week. The double- crop soybeans are 58% planted and 10% of the soybeans are starting to flower. The 2025/26 Argentina corn estimate was left unchanged this week at 54.0 million tons, with a neutral-to-higher bias. Corn in Argentina was 77.7% planted as of the middle of last week. This represents an advance of 8% for the week.
Malaysian palm oil futures prices firmer… Malaysian palm oil futures hovered near MYR 4,070 per MT Tuesday, after dipping to around MYR 4,030 in the prior session. The market was lifted by firmer edible oil prices on the Dalian and Chicago markets. Buying interest was also supported by India, the top importer, where palm oil purchases rose about 5% in November on more attractive prices. Meanwhile, exports showed tentative signs of stabilizing, with cargo surveyors noting palm oil shipments during Dec. 1–25 rose between 1.6% and 3% from November. In Indonesia, the world’s largest producer, key tariff issues with the U.S. had been resolved, with a deal projected in late January that may grant exemptions for select products, including palm oil. However, gains were capped by a stronger ringgit, which reduced export competitiveness. Overall, contracts are on track to end the year down around 8.5%, reversing last year’s solid gains, amid ample supplies and concerns over softer global demand in the near term. TradingEconomics.com
Mild profit taking in live cattle futures… February live cattle on Monday fell 67 1/2 cents to $228.975. January feeder cattle gained 82 1/2 cents to $347.00 and hit a nine-week high early on. The live cattle futures market saw some mild profit taking Monday, with buying interest limited by a general risk-off mentality in most of the raw commodity markets, as gold and silver saw some of the biggest one-day price losses in their trading history—spilling over into selling interest in other commodity markets. Feeder cattle futures saw some technical buying from the speculators today as the near-term chart posture for feeders favors the bulls. USDA reported last week’s average cash cattle trade at $229.33—up $1.36 from the week prior.
Lean hog futures pause… February lean hog futures on Monday fell 5 cents to $84.475. Lean hog futures saw a post-holiday pause. Buying interest was limited by a risk-off day in most of the raw commodity sector. Recently rising cash hog prices and a bullish near-term chart posture for the futures market had supported lean hog futures but now the cash market gains are stalling out. The February futures contract is above the latest CME lean hog index, which is bullish for futures. The latest CME lean hog index is up 13 cents to $83.84. Today’s projected cash index price is down $1.40 at $82.44. Monday’s national direct 5-day rolling average cash hog price quote is $68.02.