Good morning!
Grain futures prices firmer overnight… As of 6:00 a.m. CST, May corn was up 1 1/4 cents and if the gains hold through the close would be a technically bullish weekly and monthly high close. May soybeans were 5 cents higher and also poised for a bullish weekly and monthly high close. Same goes for May meal and bean oil, which saw modest gains overnight, with bean oil also hitting another contract high. May SRW wheat was 8 cents higher, also setting up for a bullish weekly and monthly high close, and a seven-month-high close. May HRW wheat was up 10 1/4 cents overnight. The grain markets were briefly rattled Thursday following a news report out of China that said Chinese officials are miffed the Trump administration is dragging its feet on planning and preparations for the summit meeting between Presidents Trump and Xi, set for April in China. However, by the close Thursday afternoon grain traders had mostly brushed the report aside. The key outside markets today see the U.S. dollar index slightly down, with crude oil prices higher and trading around $66.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 3.99 percent.
Mild temps and windy across the Plains and Midwest today… The National Weather Service today said much-above-normal temperatures and very windy conditions will create red flag and critical fire warnings across much of the Plains and Midwest states today. Meantime, upper-level energy will trigger a band of light to moderate snow from the northern High Plains to the Great Lakes on Saturday. A front extending from the southern Mid-Atlantic southwestward to the Western Gulf Coast will slowly move southeastward to southern Florida by Saturday evening. The system will produce showers and thunderstorms over parts of the Southeast through Saturday. Furthermore, upper-level energy moving onshore over the West Coast will produce scattered rain over parts of Northern California and the Northwest, expanding into the northern intermountain region and Great Basin by Saturday.
U.S., Iran nuclear talks to continue next week, after some progress made… The U.S. and Iran will continue nuclear talks next week after making “significant progress” in Switzerland, mediator Oman said and as reported by Bloomberg. Negotiations will resume at a technical level in Vienna after an initial consultation period, according to Oman’s Foreign Minister Badr Albusaidi. “The U.S. team has tough demands for the Iranians, including that they destroy three main nuclear sites and that any nuclear deal must last forever and not have so-called sunset clauses,” said the report. Iran said it won’t allow any of its highly enriched uranium to be moved out the country, Press TV said, citing Esmail Baghaei, a spokesman for Iran’s Ministry of Foreign Affairs. U.S. officials are yet to comment publicly, though have previously signaled Iran would have to send such stocks of uranium to another nation or dilute them.
U.S. producer price index on deck… Traders and investors get a key U.S. inflation gauge to end the trading week and the trading month: the producer price index for January. This morning’s PPI report is seen coming in at up 0.3%, month-on-month, compared to the 0.5% rise seen in the December report. PPI excluding food and energy is also seen up 0.3% in January from December, and compares to a rise of 0.7%, month-on-month, in the December report.
China to eliminate tariffs on Canadian canola meal… China said it would drop tariffs on Canadian canola meal and lobsters, easing disruptions to agricultural trade after Prime Minister Mark Carney’s January visit, Bloomberg reported. The halt — which also applies to peas and crabs — will take effect from March 1 to Dec. 31, the Chinese government said today. It comes after Canada pledged to significantly cut import duties on 49,000 Chinese electric vehicles, helping to repair a trade rift that has tested relations between the nations. “However, it remains unclear what level China will lower tariffs to on rapeseed itself, a crop known as canola in Canada. Carney had signaled that duties on the product would be dropped to 15% as of March 1, a significant reduction,” said the report. China is willing to work with Canada to “push for the healthy, stable and sustainable development of China-Canada ties,” a Ministry of Commerce spokesperson said in a statement. Canada is the world’s largest exporter of the oilseed. Traders in China have already begun booking cargoes in anticipation of the change, said Bloomberg.
Jack Dorsey’s tech firm Block cutting half its staff, turning to AI… Jack Dorsey’s Block is laying off 4,000 employees, reducing its workforce by nearly half, as the financial technology firm places a bet on artificial intelligence changing the future of labor productivity. “Block has been restructuring its business model and staffing since 2024 as the company’s stock has lagged. At the same time, the company has invested heavily in artificial intelligence tools to run more efficiently, including building its own tool called Goose. The reduction in force, which was announced in a shareholder letter on Thursday, comes after rolling job eliminations that have often been tied to annual performance reviews,” Bloomberg reported. “We are taking bold and decisive action here, but we’re doing it from a position of strength,” Amrita Ahuja, chief financial officer, said in an interview with Bloomberg. “We’re doing it in a way that we believe positions us to move even faster for our customers.” The move by Block is the latest indication of the havoc that new AI tools are wreaking on the economy and financial markets, said the report.
Average 30-year mortgage rate falls below 6% for first time since 2022… The average 30-year mortgage rate in the U.S. has slipped below 6% for the first time since 2022, to 5.98%, which could breathe life into the coming spring home-selling season. “A rate below 6% may ease affordability slightly and get some buyers off the fence, but borrowing costs would have to plunge significantly further to fully unlock the housing market,” said Bloomberg. The mortgage payment needed to purchase an average home in the U.S. has fallen to about 27% of the median household income, and affordability pressures have been slowly easing due to lower interest rates, softer home prices, and rising incomes.
USDA announces “One Farmer, One File” program… USDA Secretary Brooke Rollins on Thursday announced the “One Farmer, One File” modernization program. “Through ‘One Farmer, One File,’ USDA’s mission is to create a single, streamlined record that follows the farmer — no matter where they go in the USDA system,” said a USDA press release. The initiative is part of a broad modernization effort to unify all FSA, NRCS and RMA systems, said the press release.
Flooding in Malaysia dents palm oil production… Palm oil output in Sabah is set for a sharp decline this month as heavy rainfall and floods damage plantations in one of Malaysia’s key producing states, potentially easing a glut that’s weighed on prices for the crop, said a Bloomberg report. Production in February could fall by 15% to 17% from a month earlier, said Prakash Arumugam, chairman of the Malaysian Palm Oil Association’s Sabah branch. Prolonged rain over the past four weeks has triggered frequent flooding across estates, especially in low-lying areas. Malaysia is the world’s second-largest palm oil grower. Sabah and Sarawak — both located on the island of Borneo — are the country’s top two producing states, each accounting for about 22% of national output. Even before the floods, Malaysian production was expected to drop this month as a result of seasonal lows and shorter working days due to holidays, said the report.
Malaysian palm oil futures rebound… Malaysian palm oil futures hovered around MYR 4,020 per MT Friday, rebounding from a sharp drop in the prior session amid firmer soyoil prices in Dalian and Chicago markets. Demand signals also improved, as top buyer India saw palm oil imports surging 51% month over month in January to a four-month high. The rebound strengthened expectations that the country’s demand could recover in 2026 amid better price competitiveness, with purchases potentially reaching 800,000 MT. Despite the uptick, the contract is still heading for a weekly loss of about 1.7%, bringing the monthly fall to roughly 4.9%. The weakness reflects sluggish exports, even with seasonal demand from Ramadan and the upcoming Eid al-Fitr festival. Cargo surveyors noted Malaysian shipments for February 1–25 fell between 12.1% and 16.1% from the same period in January. Rising stockpiles and output also capped gains, while the Malaysian Palm Oil Council expects prices to settle around the MYR 4,000–4,300 range in March.
Heavy selling in cattle futures produces technical damage… April live cattle on Thursday lost $3.375 to $236.90 and hit a three-week low. March feeder cattle fell $4.65 to $361.65 and hit a four-week low. The cattle futures markets saw heavy profit-taking pressure and weak long liquidation that produced near-term technical damage by negating near-term price uptrends. A risk-off trading day in the general marketplace Thursday also kept the cattle market bulls on the sidelines. USDA at midday Thursday reported very light cash cattle trade so far this week at $245.00. The agency on Monday reported cash cattle trading last week averaged $246.91. Packer margins that are deep in the red are keeping cash cattle bids weaker this week.
Lean hog futures see modest profit taking… April lean hogs on Thursday fell 47 1/2 cents to $95.725 and hit a two-week high early on. Lean hogs saw some profit-taking pressure from the shorter-term traders. Buying interest was also limited due to the big sell offs in the cattle futures markets. The latest CME lean hog index is up 36 cents at $88.71. The national direct five-day rolling average cash hog price quote Thursday was $67.13.