Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn futures were up 1/4 cent, January soybeans down 6 1/2 cents and hit a five-week low, and March SRW and HRW wheat futures were up 1 1/4 to down 1 1/2 cents. With soybean and wheat markets presently on slippery slopes, while corn grinds sideways, grain traders will get to feast on a fresh batch of economic data from USDA on Tuesday, with its December supply and demand report. Analysts surveyed by Bloomberg, on average, look for the agency to lower its estimate of U.S. corn ending stocks by 8.2 million bushels from its November figure, to 2.146 billion bushels. The analysts look for USDA to peg U.S. soybean ending stocks up 16 million bushels, to 306.1 million bushels. And analysts, on average, look for USDA to show U.S. wheat stocks down 7.2 million bushels at 893.8 million bushels. The key outside markets early this morning see the U.S. dollar index slightly down. Nymex crude oil prices are weaker and trading around $59.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.14 percent.
Atmospheric river from Pacific Ocean to produce winter storms in Northern Plains, Midwest… The National Weather Service today said the forecast remains on track for a prolonged atmospheric river to usher in several days of heavy rainfall over the Pacific Northwest. Beginning this morning, rainfall coverage and intensity is expected to increase across coastal Washington and Oregon as a potent slug of sub-tropical moisture begins to flow inland along a strong Pacific jet. Rainfall aside, parts of the Pacific Northwest, Northern Rockies, and Northern Plains and can also expect a period of gusty winds today and Tuesday as the same Pacific jet develops a strong clipper system in the Canadian Rockies. As this clipper system ejects eastward into the Northern Plains and Upper Midwest late Tuesday, wintry weather should develop along the northern flank of the low center. While there remains uncertainty in forecast amounts, at least a few inches of snowfall and freezing rain are possible roughly along a Fargo, N.D. to Grand Rapids, MI. line. A winter storm watch is now in effect over portions of eastern North Dakota and western Minnesota. A winter storm warning is now in effect over portions of south-central Virginia. Adjacent areas in the Appalachians and southern Mid-Atlantic should also see snow.
Fed’s FOMC meeting begins Tuesday… The Federal Reserve’s Open Market Committee (FOMC) begins its monetary policy meeting Tuesday morning, with the meeting ending Wednesday afternoon with an FOMC statement and then a press conference from Fed Chair Jerome Powell. Markets are pricing in a 90% chance of a 0.25% U.S. interest rate cut at this week’s FOMC meeting. Markets are also pricing in a total of around 0.9% in U.S. interest-rate reductions for all of 2026. Market expectations are also that White House economic adviser Kevin Hassett will be nominated as the next Fed chair. Hassett is a monetary policy dove and is known for supporting faster interest rate reductions, in line with President Trump’s stance. Lower interest rates generally mean better risk appetite in the marketplace and in turn better speculator buying interest in the commodity futures markets.
U.S. Trade Representative: China complying with its U.S. trade commitments… U.S. Trade Representative Jamieson Greer said on Fox TV Sunday that China has been complying with the terms of the bilateral trade agreements and that the U.S. is constantly monitoring commitments made by China in a bid to maintain a stable trade relationship. “With China, it’s always we verify and we monitor and we watch the commitments. The commitments are quite specific,” Greer said on Fox News’ The Sunday Briefing and as reported by Bloomberg. “So all of these things that we’ve agreed to with the Chinese recently are very concrete, we can monitor them with some ease, and so far, we’re seeing that they’re in compliance.” Greer said China has gotten approximately “a third” of the way through its soybean purchase commitment for this growing season. President Trump and Chinese President Xi Jinping in late October agreed to extend a tariff truce, roll back export controls and reduce other trade barriers. But some elements of the deal — including the soybean purchases — remain in progress. U.S. Treasury Secretary Scott Bessent and Greer held a video call with Chinese Vice Premier He Lifeng on Friday, according to China’s state-run news agency Xinhua, during which the officials had an “in-depth and constructive” discussion in which they vowed to keep stable ties and address “respective concerns” on trade and the economy, the outlet said, as reported by Bloomberg.
China’s exports to U.S. continue to decline… China’s shipments to the U.S. slumped by 28.6% in November, marking the eighth straight month of double-digit declines. China’s overall trade surplus widened to $111.68 billion in November, up from $97.33 billion in the same month last year and surpassing expectations of $100.2 billion. It marked the largest trade surplus since June, as exports rose more than imports. China’s exports increased 5.9%, year-on-year, beating forecasts for 3.8% growth and rebounding from a 1.1% fall in October, boosted by a surge in shipments to non-U.S. markets amid China’s efforts to diversify export destinations and to deepen trade ties with ASEAN and EU countries. TradingEconomics.com
Ukraine’s Zelenskiy suggests peace deal with Russia not close… Ukrainian President Volodymyr Zelenskiy said negotiators discussing a U.S.-brokered peace initiative remain divided over territory as President Trump expressed disappointment in Kyiv’s handling of the deal. Elements of the U.S. plan require further discussion on “sensitive issues,” including security guarantees for Ukraine and control over eastern regions, Zelenskiy said in a phone interview. He said talks have yet to reach agreement on Ukraine’s Donbas, including the provinces of Donetsk and Luhansk. “There are visions of the U.S., Russia and Ukraine — and we don’t have a unified view on Donbas,” Zelenskiy told Bloomberg early today. He said Kyiv is pushing for a separate agreement on security guarantees from Western allies, above all the U.S.
Trump orders investigation into U.S. food chain price-fixing… President Trump has ordered the U.S. Department of Justice and the Federal Trade Commission to investigate the U.S. food supply chain for potential price-fixing and other anti-competitive behavior to drive up costs of goods such as meat, seeds and fertilizer, especially by foreign companies. “Trump, in an executive order published Saturday, said he ordered the department and the FTC to establish a task force dedicated to investigating any anti-competitive behavior and whether control of food-related industries by foreign entities pose a national security threat. The order comes as the U.S. president responds to Americans’ growing dissatisfaction on rising cost of living, which propelled Democrats to wins over the Republican Party in several key elections in November. Trump last month ordered an investigation into the meatpacking industry, blaming “majority foreign owned” companies for rising beef prices,” said a Bloomberg report.
U.S.-India trade talks continue this week… A senior U.S. State Department official will visit India this week as a team of American trade negotiators heads to the country to continue talks on a trade agreement, Bloomberg reports. U.S. Under Secretary of State for Political Affairs Allison Hooker will visit from Sunday to Thursday in order to advance the “strategic partnership” between the two nations, the U.S. Embassy in India said in a statement Sunday. She will be in New Delhi and Bengaluru and will meet with senior Indian officials including Foreign Secretary Vikram Misri. Hooker will also seek to deepen economic and commercial ties and boost US exports, according to the statement, and foster collaboration in AI and space exploration.
CME data outage on Nov. 28 due to human error… A Nov. 28 outage at a data center owned by CyrusOne caused markets operated by CME Group Inc. to be down for more than 10 hours was due to human error. Onsite staff and contractors failed to follow standard procedures for draining cooling towers ahead of freezing temperatures, resulting in the cooling system being overloaded and rising temperatures. CyrusOne has updated its procedures for cold weather and is hardening its infrastructure to prevent a repeat of the outage, which has raised concerns about the reliability of data centers and the potential for lease terminations.
Farm Bureau economist’s compelling perspective on U.S. cattle herd… Falling cattle prices are coming at a time when cattle farmers are typically making decisions about whether to hold back heifers for breeding or place them on feed. Retaining heifers for breeding could lead to herd expansion in 2028, but with input costs at near-record levels and prices still 25% higher than a year ago, there is a lot of incentive for farmers to market cattle rather than hold them back for breeding. Fundamentally, this means cattle supplies will likely remain tight through 2026, which will delay expansion even further, writes Farm Bureau economist Bernt Nelson. He said USDA’s latest Cattle-on-Feed report reflecting impacts of the ongoing suspension of cattle imports from Mexico, combined with recent processing capacity reductions, “underscores the fundamental pressures shaping U.S. cattle markets. Feeder cattle supplies are historically low. Placements and heifer numbers are declining not because of domestic herd rebuilding, but due to the sharp drop in Mexican cattle imports following the New World screwworm-related border closure. At the same time, packers continue to face underutilized capacity, resulting in substantial operational changes that will impact the supply chain for years to come.” These supply constraints, along with shifting processing capacity, have also led to higher market volatility and sharply lower feeder cattle prices, said Nelson.
Malaysian palm oil futures down to start trading week… Malaysian palm oil futures fell over 1% to below MYR 4,100 per MT Monday, reversing gains from the prior session amid the ringgit’s recent appreciation and weakness in Dalian and Chicago soyoil futures, as concerns grew over slow Chinese soybean purchases from the U.S. Additional pressure came from signs of rising Malaysian inventories, which Reuters projected could reach a 6-1/2-year high by end-November, alongside reduced Indonesian export taxes for December. Weak shipments also weighed on sentiment, with Intertek noting a 19.7% mom drop in November exports. Still, losses were limited by solid trade data from key buyer China, where exports rebounded, and imports accelerated. Demand prospects also improved in India after refiners reportedly cancelled about 70,000 tons of crude soyoil for December–January delivery due to higher global prices and a weaker rupee, making palm oil more competitive. Seasonal buying ahead of Lunar New Year and Ramadan 2026 provided further support.
Cattle futures markets bulls back in control… February live cattle futures on Friday rose $3.15 to $227.15, hit a three-week high and for the week rose $11.225. January feeder cattle futures closed up $2.475 at $339.05, hit a four-week high and on the week were up $15.075. Last week was a good one for the cattle futures markets bulls, including the technically bullish weekly high closes Friday that set the stage for follow-through technical buying early this week. Solidly higher cash cattle trade last week also encouraged the cattle futures markets bulls. Active cash cattle trading late last week saw USDA report at midday Friday steers fetched an average price of $220.02 and heifers $220.03. That is well up from the prior week’s average cash cattle trade reported by USDA at $211.53.
Good week for the lean hog futures bulls, too… February lean hog futures on Friday rose 42 1/2 cents to $82.275, hit a three-week high and for the week were up $1.275. Friday’s technically bullish weekly high close and much-improved near-term chart posture for lean hog futures sets the table for more speculator buying interest this week. A price stabilization in the cash hog market is also bullish, suggesting the cash market has put in a seasonal price bottom. More African Swine Fever cases discovered in Spain have also given lean hog bulls a boost on ideas of better U.S. pork exports with Spanish pork being banned by some countries. The latest CME lean hog index is up 16 cents to $81.83. Today’s projected cash index price is down 2 cents to $81.81. The national direct five-day rolling average cash price Friday was $70.42.