Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, December corn was up 1 1/4 cents. January soybeans were 11 1/2 cents higher and hit a 17-month high overnight. December HRW and SRW wheat futures markets were around 4 cents higher. Grain futures traders Friday got their first major USDA economic data in well over a month and then promptly sold off. The agency’s monthly supply and demand report was not significantly bearish; it’s just that grain traders were hoping for and had even priced in an overall bullish report. Also, given the recent rallies in corn, soybean and winter wheat futures markets, they were due for some corrective, profit-taking pressure from the shorter-term traders, and got it on Friday. No significant near-term chart damage was inflicted with Friday’s back-slides in grain prices. However, good follow-through selling pressure early this week would likely produce near-term technical damage that would begin to suggest corn, soybeans and winter wheat markets have put in near-term price tops. The key outside markets early this morning see the U.S. dollar index a bit firmer. Nymex crude oil prices are near steady and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.125 percent.
Showers in the Plains, Midwest… The National Weather Service today said low pressure over the central Rockies will move eastward to the southern Ohio Valley by Tuesday night into Wednesday. The system will produce higher-elevation snow and lower-elevation rain over parts of the Great Basin/Central Rockies from Monday into late Monday night.Scattered showers and thunderstorms will develop over parts of the Northern/Central Plains, expanding into the Middle/Lower Mississippi Valley by Monday evening.By Tuesday morning, light snow will develop along the northern edge of the precipitation shield over parts of the Upper Mississippi Valley/Great Lakes into parts of the Ohio Valley. Rain and a few embedded thunderstorms will develop over parts of the Ohio Valley on Tuesday, tapering off by Wednesday. In addition, rain will move into the Central Appalachians and Mid-Atlantic on Tuesday afternoon, continuing into Wednesday.
September U.S. jobs report out this Thursday… The U.S. Bureau of Labor Statistics has announced it will release the September U.S. jobs report this Thursday, Nov. 20, after it was delayed due to the U.S. government shutdown. The BLS will also issue September inflation-adjusted earnings Friday, Nov. 21, and the reports will come out at 7:30 a.m. CST. The new data will help shed light on the state of the U.S. economy, though the data will be more backward-looking than usual.
Trump calls out “Big Four” meatpackers as foreign-owned cartels... A Bloomberg opinion story over the weekend highlighted President Trump calling on the U.S. Justice Department to investigate the so-called Big Four meatpacking conglomerates “that have a hammerlock on beef processing, distribution and pricing in the U.S.” Trump’s allegations are serious: price fixing, collusion and market manipulation by what he calls “foreign-owned meatpacking cartels.” Together, the Big Four control 85% of the U.S. beef market, which the White House says amounts to monopoly power, allowing the companies to slash payments to farmers, reduce herd sizes, drive up consumer prices and jeopardize the nation’s food supply, said Bloomberg. “Action must be taken immediately to protect consumers, combat Illegal monopolies, and ensure these corporations are not criminally profiting at the expense of the American people,” Trump posted on his social network. The Big Four themselves have chosen not to comment on the investigation or the president’s allegations. But the Meat Institute, a trade group representing meat and poultry processors, said beef packers have been losing money because of tight cattle supplies and strong demand. Recent Trump administration actions have concerned many U.S. farmers—namely a trade showdown with China that prompted China to stop buying U.S. soybeans, and Trump threatening to import more beef from Argentina. President Trump may have won back a measure of farmer support by attacking four of the best-known names in agribusiness: Minnesota’s Cargill, one of the largest privately held companies in the country; Tyson Foods, a major meat and poultry producer out of Arkansas; and JBS in Colorado and National Beef Packing Company in Missouri. The latter two are owned by companies in Brazil but have their U.S. headquarters in those states. The U.S. beef market was valued at more than $108 billion in 2024, said the Bloomberg opinion piece.
JBS expanding its egg business… Mantiqueira USA Inc., a wholly owned subsidiary of the joint venture between JBS and the founders of Mantiqueira Alimentos, entered into a binding agreement to acquire Hickman’s Egg Ranch, expanding the participation of the world’s largest meat producer in the egg sector, Bloomberg reported. The deal marks Mantiqueira’s entry into the U.S. market through the newly created Mantiqueira USA. “The acquisition marks a significant milestone in Mantiqueira USA’s long-term strategy to build a strong and scalable presence in the United States egg market,” JBS said in a statement on Saturday. The transaction is expected to close before year-end, pending customary closing conditions, according to statement. Hickman’s Egg Ranch is a leading egg producer based in Arizona and is one of the top 20 egg companies in the U.S. JBS, the world’s biggest meat producer, acquired 50% control of Mantiqueira Brasil, a privately held firm that’s South America’s top egg producer, in January. At the beginning of this year, JBS Chief Executive Officer Gilberto Tomazoni said in an interview with Bloomberg News that the interest in eggs has been driven by the sector’s strong expansion, both in Brazil, where the market has grown by double digits over the past couple of years, and internationally.
Noted big bond trader: stock, financial markets troubles are brewing… In markets awash in “garbage lending” and unhealthy stock valuations, Jeffrey Gundlach is keeping his strategy simple: load up on cash and stay away from private credit, Bloomberg reports. “One of Wall Street’s bond kings is spotting overpriced assets almost everywhere he looks…. Gundlach called out nosebleed valuations in the equity market and warned investors against ‘incredibly speculative’ bets,” said the report. The DoubleLine Capital founder recommends a 20% cash position to hedge against a market implosion — one he sees brewing in unsafe lending to private companies and overblown hopes for artificial intelligence. “The health of the equity market in the United States, it’s among the least healthy in my entire career,” Gundlach said. “The market is incredibly speculative, and speculative markets always go to insanely high levels. It happens every time.” The veteran debt investor is concerned the $1.7 trillion private credit market is engaging in “garbage lending” that could tip global markets into their next meltdown.“The next big crisis in the financial markets is going to be private credit,” he said. “It has the same trappings as subprime mortgage repackaging had back in 2006,” Gundlach said and as reported by Bloomberg.
Malaysian palm oil futures up a bit… Malaysian palm oil futures hovered above MYR 4,150 per MT on Monday, picking up from two subdued sessions. A weaker ringgit and firmer Dalian’s most-active soyoil and palm oil contracts supported sentiment, helping prices recover from a four-month low. However, lingering uncertainties around land-seizure policies in top producer Indonesia and its biodiesel plan added caution, limiting the upside. Gains were further capped by a cargo surveyor’s estimates showing Malaysian palm oil product shipments for November 1–15 fell 15.5% from the previous month. On the supply side, industry data showed October output jumped 11.02% to the highest since August 2015, while stocks climbed to a 6-1/2-year peak. In India, the largest consumer, palm oil imports fell to a five-month low in October as buyers shifted to soybean oil amid rising palm prices. For the 2024/25 marketing year, India’s imports dropped 16% to 7.56 million MT, the lowest in five years.
Cattle futures bulls work to stabilize markets… December live cattle futures on Friday rose 15 cents to $219.15 after hitting a four-month low early on. For the week, December live cattle were down $2.20. January feeder cattle futures Friday closed up $2.10 at $320.55 and hit a four-month low early on. For the week, January feeders were up 97 1/2 cents. The cattle futures markets saw recoveries Friday and managed to post high-range daily closes. This suggests the bears may be exhausted and may have played out their technical selling pressure. However, more price gains will be needed this week to better suggest near-term market bottoms are finally in place. Active cash cattle trading last week saw USDA reporting at midday Friday that steers fetched an average price of $225.35 and heifers $225.29. That compares to the prior week’s average cash cattle trade at $228.70.
Lean hog futures see short covering but price downtrend remains in place… December lean hog futures on Friday rose 42 1/2 cents to $78.50 and for the week were down 90 cents. The hog futures market saw some short covering after prices hit a nearly four-month low last Thursday. However, December lean hogs remain in a price downtrend and the chart-based speculative bears will probably be looking to play the short side this week. Eroding cash hog prices will also favor the hog bears until the cash market turns around. Lean hog futures’ present discounts to the cash index will work to limit selling interest in hog futures in the near term. The latest CME lean hog index is down another 30 cents to $88.83. Today’s projected cash index price is down another 89 cents to $87.94. The national direct five-day rolling average cash price Friday was $83.23—down over $1.00 from the prior Friday’s quote.