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Grain futures extend Wednesday’s gains overnight… As of 6:00 a.m. CST, March corn was up 2 1/4 cents. March soybeans were 5 1/4 cents higher, while March SRW and HRW wheat futures were up 2 3/4 to 4 1/2 cents, with SRW hitting a four-week high. The grain market bulls showed important follow-through buying strength overnight, suggesting the fledgling price uptrends on the daily bar charts can be extended. On tap for the grains today is the weekly USDA export sales report. A Dow Jones Newswires survey of analysts shows they expect U.S. corn export sales for the week ended Jan. 22 at 1 million to 2.6 million MT. U.S. soybean sales are seen at 400,000 to 2.2 million MT, while wheat sales are seen at 275,000 to 600,000 MT. These figures are for all marketing years. The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures prices are higher, hit a six-month high, and are trading around $64.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.25 percent.
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Snow in the Plains; “bomb cyclone” to hit the East Coast Saturday… The National Weather Service today reports high pressure moving southward out of central Canada will create snow over the northern/central Plains this afternoon through Friday. Moreover, low pressure moving across south-central Canada will produce light snow over the Northern Plains on Saturday morning. In the meantime, lake-effect snow will develop downwind from the Great Lakes from today into late Friday night. There will be snow and rain over parts of the middle/lower Mississippi Valley by this evening. Then the system will move across the southern Ohio and Tennessee Valleys on Friday morning. By Friday evening into Saturday the snow will move into the southern Mid-Atlantic and rain over the Southeast. This rapidly deepening storm system, which some are calling a “bomb cyclone,” will produce powerful onshore winds along the mid-Atlantic coast from the North Carolina Outer Banks northward. Wind gusts near hurricane-force will coincide with astronomical high tides, producing moderate to locally significant coastal flooding. In addition, near-blizzard conditions are expected across northeastern North Carolina and southeastern Virginia, with sharply reduced visibility due to snow and blowing snow, making travel extremely treacherous.
Trump warns Iran to make nuclear deal, or else… President Trump warned Iran to make a nuclear deal with the U.S. or face military strikes far worse than the attack he ordered last June, increasing pressure on the regime and propelling crude oil prices higher. In a social-media post late Wednesday, Trump said the fleet of U.S. ships he’d ordered to the region, led by the USS Abraham Lincoln aircraft carrier, is “ready, willing, and able to rapidly fulfill its mission, with speed and violence, if necessary,” Bloomberg reported. “Hopefully Iran will quickly ‘Come to the Table’ and negotiate a fair and equitable deal - NO NUCLEAR WEAPONS - one that is good for all parties,” Trump wrote. In response, Iran said it stands ready for dialogue based on mutual respect and interests but warned that “IF PUSHED, IT WILL DEFEND ITSELF AND RESPOND LIKE NEVER BEFORE,” the country’s mission to the United Nations said in a post on X. Trump has repeatedly warned Iran that the U.S. might launch another attack, but those threats have recently been linked to Tehran’s deadly crackdown on protests rather than its atomic activities. The heightened geopolitical tensions pushed crude oil prices to a six-month high, while safe-haven demand pushed gold and silver prices to all-time highs overnight.
Key takeaways from FOMC meeting… Following are the key factors coming out of this week’s FOMC meeting, according to Bloomberg:
- Federal Open Market Committee votes 10-2 to leave its benchmark interest rate in a target range of 3.5%-3.75%
- Fed Governors Christopher Waller and Stephen Miran voted against the decision in favor of lowering rates by a quarter-point
- Fed removes language from statement that had noted “downside risks to employment rose in recent months”
- Fed upgrades view of economy to say available indicators suggest economic activity “has been expanding at a solid pace,” and repeats inflation “remains somewhat elevated”
- Fed tweaks description of the labor market, noting “job gains have remained low” and the jobless rate has “shown some signs of stabilization”
Senate Democrats, Trump administration officials talking to avoid another U.S. government shutdown… Talks between top U.S. Senate Democrats and the Trump administration aimed at averting a federal government shutdown have moved closer to Democrats’ demands, according to a person familiar with the negotiations and as reported by Bloomberg. No deal has yet been reached, the person said late Wednesday night. Without an agreement, government funding will lapse on Saturday for much of the federal government, including the Departments of Defense and Health and Human Services, but not USDA. Senate Democratic Leader Chuck Schumer has insisted Republicans agree to remove long-term Homeland Security funding from a massive spending bill to keep the government open past Friday. Some senators in both parties have said they could support a short-term stopgap measure for Homeland Security funding to give both sides more time to discuss potential restrictions on immigration enforcement operations. The Senate is set to hold the first procedural vote on the spending package this morning. Any single senator could trigger a brief government shutdown through procedural action, Bloomberg said.
U.S. dollar index still wobbly despite Bessent touting strong greenback… The U.S. dollar index traded slightly down overnight and quickly lost traction from comments by U.S. Treasury Secretary Scott Bessent saying the Trump administration supports a stronger U.S. currency. The ICE U.S. Dollar Index earlier this week dropped to a four-year low when President Trump said he was comfortable with the depreciation of the U.S. dollar because it is good for U.S. businesses. Bessent, speaking in an interview with CNBC Wednesday, said “the U.S. always has a strong dollar policy.” He also said the U.S. was “absolutely not” intervening in the Japanese currency market, rejecting speculation that had been building since Friday.
Copper prices surge to record high… Copper prices rose by the most in more than 16 years as metals extended a dramatic start to the year fueled by a wave of intense speculative trading in China, Bloomberg reports. “Chinese investors are piling into metals as they ride a powerful wave of momentum that has lifted everything from tin to silver to record highs. The surge in copper took place at a time of day when Chinese traders dominate flows, with prices on the London Metal Exchange rising more than 5% in less than an hour starting at 2.30 a.m. London time. ‘This is all driven by speculative funds,’ said Yan Weijun, head of nonferrous metals research at Chinese trader Xiamen C&D Inc. ‘It’s likely all Chinese money given the surge is in Asian hours,’ ” said the Bloomberg report. Prices Thursday gained as much as 7.9% to trade above $14,000 a ton for the first time ever. The red industrial metal, which is used in almost every electrical application, has risen 25% since the start of December.
U.S., Denmark, Greenland officials start discussions… U.S., Danish and Greenlandic officials met Wednesday to discuss a new framework deal over Greenland amid the U.S. desire to see a greater American presence on the Arctic island. The senior officials met to “discuss how we can address U.S. concerns about security in the Arctic while respecting the red lines of the Kingdom,” said Oliver Routhe Skov, the spokesman for Denmark’s embassy to the U.S. and as reported by Bloomberg. The negotiations follow President Trump’s announcement last week of a “framework of a future deal,” in which he pledged to refrain from imposing tariffs on European nations opposing his effort to take possession of Greenland. Secretary of State Marco Rubio earlier Wednesday told lawmakers on the Senate Foreign Relations Committee that “we’re in a good place right now” on Greenland.
Big China hog/pork producer soliciting for second share listing… Muyuan Foods Co., one of the world’s biggest hog breeders and pork producers, has started taking investor orders for its second listing in Hong Kong that may raise as much as HK$10.7 billion ($1.4 billion), in what is poised to be the biggest maiden share sale in the city so far this year, Bloomberg reports. “The Henan-based company, whose shares are already traded in Shenzhen, is offering about 274 million shares at as much as HK$39 apiece, according to its listing document on Thursday. That reflects a discount of at least 23% to Wednesday’s closing price of 45.14 yuan. Muyuan said it plans to use proceeds from the offering for global expansion, research and evelopment, and general corporate purposes. It expects to list its shares in Hong Kong on Feb. 6,” said the report.
Malaysian palm oil futures extend rally to fourth session… Malaysian palm oil futures extended gains for a fourth straight session on Thursday, trading above MYR 4,300 per MT and holding a three-month high. Prices were lifted by strength in edible oil markets on the Dalian and Chicago exchanges, a weaker ringgit, and firmer crude oil, which improved overall risk appetite. Export momentum reinforced the upside, with cargo surveyors reporting shipments for January 1–25 rose between 7.97% to 9.97% from December. Seasonal demand ahead of Lunar New Year and Ramadan also underpinned sentiment, while expectations of a sharp January output drop due to weather and harvesting patterns added support. India, the world’s largest palm oil consumer, further bolstered demand as buyers cancelled soybean oil shipments from South America amid a weaker rupee and rising global prices, widening the price gap and making palm oil more attractive. Gains were capped, however, by caution ahead of China’s January PMI release, given its importance as a key buyer.
Cattle futures see renewed technical buying… April live cattle on Wednesday rose $1.325 to $238.725. March feeders gained $3.85 to $365.85 and hit a three-month high. The cattle futures markets Wednesday saw renewed chart-based buying from the speculators today, and amid supply and demand fundamentals that remain solid. USDA Wednesday reported very light cash cattle trading activity so far this week, averaging $234.00. USDA Monday reported average cash cattle trading last week at $234.70, up $2.20 from the week prior. Traders are awaiting Friday afternoon’s semi-annual USDA cattle inventory report.
Lean hog futures see heavy profit-taking pressure… April lean hogs Wednesday lost $1.675 to $95.15. Hog futures saw profit-taking pressure after hitting a contract high on Tuesday. Follow-through selling pressure today would likely produce some technical damage. The latest CME lean hog index is up 42 cents at $84.43. Today’s projected cash index price is up another 79 cents at $85.22. The national direct five-day rolling average cash hog price quote Wednesday was $60.06.