Good morning!
Grain futures prices mixed overnight… As of 6:00 a.m. CST, May corn was down 1 cent. May soybeans were 1 1/2 cents higher. May soybean meal was slightly up and May bean oil was slightly down. May SRW wheat was 4 1/4 cents lower and May HRW wheat was down 3 1/4 cents. The keener risk aversion in the general marketplace this week is squelching the grain market bulls. However, it can be argued the grain futures markets this week have not fared too badly amid a major war currently playing out in the Middle East. The key outside markets today see the U.S. dollar index a bit weaker, with Nymex crude oil prices slightly higher and trading around $74.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.1 percent.
Trump pledges ships will have safe passage in Middle East… President Trump on Tuesday said the U.S. will ensure safe passage of oil from the Middle East to head off a potential energy crisis caused by the war in the region. “The U.S. International Development Finance Corporation will offer insurance to help ensure the flow of energy and other commercial trade in the Gulf, and the U.S. Navy will begin escorting tankers through the Strait of Hormuz if necessary,” said a Bloomberg report. “Trump’s assurances helped calm nerves in some markets, but traders remain skeptical the plan will allow oil flows to return swiftly to normal levels in the region,” said the report. ”The shipping industry sees this as only a partial solution to a historic crisis…. Shipowners are cautious about the insurance provision and the cost and say an issue of confidence cannot easily be solved with the U.S. navy, given Iran’s continued strikes and limited capacity for escorts.”
Emerging markets in Asia being routed by Middle East war… The war in Iran has swiftly turned emerging markets into one of the worst places to be for global investors, according to a Bloomberg report. “Stocks and bonds that only days ago were at record highs are now under pressure as traders assess how higher oil prices and a resurgent U.S. dollar — twin shocks unleashed by the conflict — weaken the outlook for some of the world’s fastest-growing economies. Panic swept through South Korea’s trading floors as concerns over the Middle East war sent the world’s hottest stock market to its biggest-ever sell off. Asia has borne the brunt of the sell off, with Korean stocks tumbling 18% this week. The abrupt shift is raising concerns about whether the investment case for emerging markets has changed. Before the war, top money managers had been building long positions across Asia, Latin America and parts of EMEA, betting on robust growth, easing inflation and looser global monetary policies. Now, the prospect of persistently higher energy costs and a stronger U.S. dollar risk triggering a rush to cut exposure,” said the report. India’s rupee fell to a record low today amid concerns that rising crude prices may stoke inflation and worsen the country’s widening trade deficit. The Reserve Bank of India intervened after the rupee breached the 92-per-dollar level, selling dollars to steady the currency, according to people familiar with the matter and as reported by Bloomberg. The Taiwan dollar extended losses to its weakest since May, weighed down by heavy foreign outflows. Taiwan’s central bank may have to step in if the local currency’s drop accelerates and especially if it rapidly weakens toward 32 per dollar, said Stephen Chiu, chief Asia FX and rates strategist at Bloomberg Intelligence.
Chinese officials want steady relations with U.S. … China’s legislature has signaled a desire for steady relations with the U.S. as the countries prepare for a planned summit between Chinese leader Xi Jinping and President Trump in coming weeks, according to a Bloomberg report. Lou Qinjian, spokesman for the National People’s Congress, told reporters today that “head of state diplomacy” remains the “irreplaceable” driver of bilateral ties. He noted both leaders have maintained regular communication since last year. “China and U.S. both stand to gain from cooperation and lose from confrontation,” Lou said in response to a question from Bloomberg. “China is ready to strengthen communication with the U.S. at all levels and through various channels and create more space for cooperation.” The comments follow reports that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet Vice Premier He Lifeng in Paris at the end of next week. Those talks aim to finalize deals before Trump’s expected Beijing visit between March 31 and April 2.
Active weather pattern across much of U.S. … The National Weather Service today said an active early spring weather pattern will persist across the continental U.S. through the end of the week. Ongoing showers and thunderstorms across the Ohio Valley this morning will continue eastward and gradually diminish through the day. By mid to late afternoon, new thunderstorms are expected to develop farther southwest across the ArkLaTex and mid-Mississippi Valley, then track northeastward into the Ohio Valley Wednesday night into Thursday.These storms may produce areas of heavy rainfall and localized flash flooding. Some of the storms that develop may become strong to severe.By Thursday into Thursday night, the severe threat is forecast to shift westward into the western High Plains, from the Texas Panhandle to western Kansas. Meanwhile, unseasonably warm temperatures will continue to make headlines through the remainder of the work week. A broad area of well-above-normal warmth is expected from Texas into the Southeast. The warmth will extend northward into the mid-Atlantic and Ohio Valley.
Rising soybean oil prices cutting into demand… India, the world’s top edible oil importer, has canceled more soybean oil cargoes as costs for the product have risen sharply compared with alternatives, Bloomberg reported. “About 25,000 tons booked from Russia, as well as around 6,000 to 8,000 tons from South America, have been axed in recent days as soy oil’s premium to palm oil rises, according to Aashish Acharya, vice president at Patanjali Foods Ltd., one of the country’s top buyers. The Russian cargoes were meant to arrive in India by late March or early April, while the South American supply was for the April to July period, he said,” said the Bloomberg report. The moves add to a recent string of cancellations by traders in that nation. “India scrapped about 70,000 tons of South American soy oil last week and had backed out of at least 35,000 tons in January as the rupee’s slump made imports more expensive. In December, buyers scrapped or delayed more than 100,000 tons of Argentinian deals,” said the report. “Palm oil is a cheaper option for buyers looking for replacements,” Acharya said. “We could see more Indian purchases of palm oil in the coming days, as nearby shipments of palm oil is available at around $60-$70 cheaper compared to soybean oil.”
Malaysian palm oil production hurt by flooding… Malaysia’s palm oil production is set for the steepest monthly decline in more than a year after floods across its major growing state, trimming inventories and likely underpinning higher prices, according to a Bloomberg report. Output dropped 16% in February to 1.33 million tons, according to the median of 12 estimates in a Bloomberg poll of plantation executives, traders and analysts. “That would be the biggest drop since January 2025, and extend production declines for a fourth straight month. Heavy rain and flooding hammered plantations in Malaysia’s Sabah last month, a region that accounts for about a fifth of the country’s output. Even before the wild weather, the nation’s production was expected to decline in February due to seasonal lows and shorter working days due to holidays,” said the report.
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Malaysian palm oil futures slip at mid-week… Malaysian palm oil futures slipped below MYR 4,180 per MT Wednesday, snapping a three-session winning streak amid weaker soyoil prices on the Dalian and Chicago markets. Profit-taking added pressure after contracts hit a near four-week high. Sentiment was further hit by softer export data, with cargo surveyors noting February shipments fell 21.5%–22.5% from January, despite seasonal demand ahead of Eid al-Fitr. In key buyer China, official data showed weaker February activity, partly due to an extended Spring Festival break. Still, losses were capped by a softer ringgit and firmer crude oil prices amid escalating Middle East tensions. In India, the world’s largest consumer, February palm oil imports rose 10.1% mom to a six-month high of 844,000 MT, supported by a wider discount to rival oils. Meanwhile, Reuters projected Malaysia’s palm oil stocks likely fell for a second straight month to a four-month low in February, as seasonal output declines outweighed slower exports.
Cattle futures bulls again showing resilience… April live cattle on Tuesday rose $1.025 to $234.125. March feeders fell 7 1/2 cents to $357.20. The live cattle futures market Tuesday saw corrective buying, including short covering from the shorter-term speculative traders. Feeder futures saw a pause. Both markets Monday hit two-month lows and near-term chart damage was inflicted. A bigger risk-off trading day in the general marketplace Tuesday than that seen on Monday limited buying interest in the cattle futures markets. Live cattle futures continue to trade well below the cash market. Reports of weaker cash trade this week are beginning to circulate, indicating weaker futures trade could be pulling cash bids down. Beef packer cutting margins are still deep in the red, suggesting packers will be less willing to bid up for supplies. USDA today at midday Tuesday reported no cash cattle trading yet this week, though some reports said light cash trade in the southern Plains this week is at sharply lower levels. The agency Monday reported last week’s cash cattle trading averaged $242.71--down $4.20 from the prior week’s average.
Lean hog futures pause… April lean hog futures on Tuesday rose 17 1/2 cents to $95.75, nearer the daily high. Hog futures Tuesday saw a pause. Keen risk aversion in the general marketplace limited the upside in hog futures, while firming cash hog prices limited the downside in futures. Pork packers presently see their cutting margins in the black, which should work to support firmer cash hog prices. The latest CME lean hog index is up 25 cents at $89.69. Today’s projected cash index price is up another 15 cents at $89.84. The national direct five-day rolling average cash hog price quote Tuesday was $68.47.