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Grain futures lower overnight, amid keener risk aversion… As of 6:00 a.m. CST, March corn was down 2 cents. March soybeans were 5 3/4 cents lower and hit a two-week low, while March SRW and HRW wheat futures were down 4 to 5 1/2 cents. Grain traders are still squeamish amid the keener risk aversion in the general marketplace to start the trading week and month—and following Friday’s dramatic plunges in gold and silver prices. (See item below.) On tap for the grains today is the weekly USDA export inspections report and the monthly USDA fats and oils report. Key outside markets today see the U.S. dollar index slightly higher, with crude oil prices sharply down and trading around $61.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.22 percent.
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Spectacular meltdowns, high volatility in gold, silver markets send commodity bulls to the sidelines… Ag commodity futures traders on Friday could not help but keep their eyes glued to record-setting price downdrafts and extreme volatility in gold and silver futures markets. The same could be the case today. Silver’s 26% plunge on Friday was the biggest on record, while gold dropped 9% in its worst day in more than a decade. Overnight, March silver dropped to a low of $71.20 an ounce, after last Thursday hitting a record high of $121.785. April gold futures overnight hit a low of $4,423.20 an ounce after last Thursday hitting a record high of $4,626.80. Both metals had posted solid rebounds from the overnight lows, as of this writing. The CME Group over the weekend again raised margin requirements for the two metals futures contracts. Traders in stock and financial markets are also spooked by the mammoth plunges and extreme volatility in gold and silver prices, with global stock markets lower overnight. Part of the pressure on the metals was due to President Trump on Friday nominating Kevin Warsh to lead the Federal Reserve, which sent the U.S. dollar index higher. Warsh has been known to be more hawkish on U.S. monetary policy. Some blamed the bloodbath in gold and silver markets on Chinese speculators loading up on leveraged long-side bets using futures and options—and possibly not understanding the potential implications of the huge leverage involved. Bloomberg reported Chinese metals traders have racked up losses totaling at least 1 billion yuan after one of their counterparties fled the country leaving deals unfinished. Xu Maohua, a metals dealer also known as “The Hat,” went into hiding. He was reportedly central to a network that helped the state-owned SDIC Commodities subsidiary boost sales via irregular deals that skirted Chinese government rules.
Snow in northern U.S.; still very cold in the South.… The National Weather Service today reports a series of Alberta clippers will spread light snow across the Great Lakes today, and periods of light snow/wintry mix across the Northern Plains for the next couple of days. A frontal wave will bring increasing chance of showers and embedded thunderstorms across the South and light snow across the Ohio Valley on Tuesday, spreading east into the Mid-Atlantic Tuesday night/Wednesday. Extreme cold/freeze warnings remain in effect early this morning across much of Florida into southern Georgia/Alabama, portions of the Carolinas and southeastern Louisiana before a gradual moderating trend sets in. With the departure of the intense cyclone responsible for dumping more than a foot of heavy snow that is rarely seen near the coast of North Carolina, arctic air remains engulfing much of the eastern U.S. In an extremely rare situation, it is colder across Florida than over Montana in the depth of winter. The winter storm on the East Coast this past weekend meant a second weekend of flight delays and cancellations but not as severe as the previous round. More than 194,000 homes and businesses, mainly in Louisiana, Tennessee and Mississippi, were without power early Saturday, according to PowerOutage.com. The cold also threatened citrus growers, with most of Polk County in central Florida, the state’s biggest producing region, in the zone expected to face below-freezing temperatures. That county in the prior season produced nearly 30% of Florida’s total orange output in terms of boxes, according to USDA.
Partial U.S. government shutdown… The federal government went into a partial shutdown over the weekend while waiting for the U.S. House of Representatives to approve a funding deal President Trump worked out with Democrats. “The funding lapse is likely to be short, with the House returning from a break on Monday and the Republican president fully supporting the spending package. The shutdown affects agencies including the Treasury, Defense, Homeland Security, Transportation, Health and Human Services and Labor Departments, but some parts of the government are already fully funded through the end of the federal fiscal year,” Bloomberg reported.
Iran ratchets down its rhetoric against U.S.; oil prices drop… Iran said it hopes diplomatic efforts to avert a war with the U.S. will bear fruit within days, according to the Islamic Republic’s foreign ministry and as reported by Bloomberg. Multiple countries in the Middle East have acted as intermediaries to exchange messages with the U.S., and Iran’s priority in talks is sanctions relief. Oil prices fell sharply in early trading today, partly because of the heightened diplomatic maneuvers, with Brent crude dropping around 4.5% to $66.20 a barrel. Nymex crude oil futures were trading around $62.00 a barrel early today, down around $3.00. Crude oil prices are still up so far this year because of the still-high chances of a conflict in the oil-rich Middle East. Earlier in the weekend, Iran’s Supreme Leader Ayatollah Ali Khamenei warned of a “regional war” as tensions continued to mount over potential U.S. strikes on Tehran. Iran’s army chief has renewed warnings that Tehran could strike Israel if attacked by the U.S. Iran’s Foreign Minister said Tehran is ready to “embrace a fair and equitable nuclear deal” that would ensure “no nuclear weapons” and guarantee the lifting of sanctions.
Major Australian grain shipper warns profits will drop due to global grain glut… Australia’s GrainCorp Ltd., a leading exporter of wheat and other crops, warned today that a global supply glut would result in sharply lower earnings, sending its shares tumbling to a four-year low. The firm’s stock plunged by more than 19% to the lowest since August 2021 at one point after the company released its updated guidance. “GrainCorp has dropped by around a third since early October as a bumper harvest in the U.S. and good conditions in South America had already led to fears of oversupply,” Bloomberg reported. Record global production has created an oversupply of grain, outpacing demand growth and placing downward pressure on commodity prices for the whole market, GrainCorp Managing Director Robert Spurway said. The current abundance of global supply and low grain prices have reduced incentives for growers to deliver grain to market, he said and as reported by Bloomberg.
Natural gas futures prices plunge as warmer U.S. weather coming… U.S. natural gas futures plummeted overnight, erasing Friday’s surge, as near-term weather forecasts showed milder conditions coming for much of the U.S. this week. The front-month contract fell as much as 17% to $3.620 per million British thermal units in early Asian trading. The contract had added 11% on Friday ahead of record-breaking cold weather. While frigid temperatures are gripping the southern U.S. and prompting power-saving efforts, the outlook through the middle of the month is warmer. Large portions of the country are set to see higher-than-normal temperatures, according to the National Oceanic and Atmospheric Administration. That is likely to reduce demand for natural gas, which is used for heating and power generation and is a crucial component in the production of fertilizer.
USDA monthly fats and oils report out this afternoon… U.S. soybean crushers likely processed 6.914 million short tons, or 230.4 million bushels, of soybeans in December, according to analysts surveyed by Reuters ahead of this afternoon’s monthly USDA crush report. If the average of estimates is realized, the U.S. soybean crush would be up 4.5% from the 220.5 million bushels crushed in November of last year and up 5.9% from the December 2024 crush of 217.7 million bushels. It would also be the second-largest monthly crush on record, behind only the October 2025 crush of 236.3 million bushels. U.S. soyoil stocks as of December 31 were estimated at 2.279 billion pounds, according to the Reuters survey. That estimate reflects a 5.5% increase from stocks totaling 2.164 billion pounds at the end of November and a 35.1% jump from stocks of 1.687 billion pounds at the end of December 2024, according to USDA data.
USDA semiannual U.S. cattle inventory report shows shrinking supply—lowest in 75 years… There were 86.2 million head of cattle and calves on U.S. farms as of Jan. 1, according to Friday afternoon’s twice-yearly cattle inventory report published by USDA’s National Agricultural Statistics Service (NASS). That’s the lowest level since 1951. Other key findings in the report saw that of the 86.2 million head inventory, all cows and heifers that have calved totaled 37.2 million. There are 27.6 million beef cows in the U.S. as of Jan. 1, down 1% from last year at the same time. The number of milk cows in the U.S. increased to 9.57 million. The U.S. calf crop was estimated at 32.9 million head, down 2% from previous year. All cattle on feed were at 13.8 million head, down 3% from Jan. 1, 2025. NASS surveyed approximately 35,000 operators across the nation during the first half of January.
Cattle futures traders watching outside markets… April live cattle on Friday fell 47 1/2 cents to $236.325 and for the week down 12 1/2 cents. March feeder cattle lostl $4.85 to $360.275 and for the week up 10 cents. Cattle futures Friday saw selling pressure amid a big risk-off day in the general marketplace, led by a record-setting meltdown in gold and silver markets that spooked many raw commodity futures traders. Still-quiet cash cattle trading late last week saw USDA Friday reporting steers averaging $236.74 and heifers averaging $237.15.
Lean hog futures bulls losing some traction… April lean hogs on Friday fell 30 cents to $95.15 and for the week down $1.025. The futures market saw mild profit-taking pressure Friday and the bearish weekly low close suggests the speculators may be looking to continue to play the short side early this week. However, still-bullish overall technicals and the recent rallies in the cash hog and CME lean hog index prices will limit selling interest. Hog futures’ premium to the CME lean hog index also is a positive element for the futures market. The latest CME lean hog index is up 50 cents to $85.72. Today’s projected cash index price is up another 6 cents to $85.78.