Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, March corn was up 1 1/4 cents. March soybeans were 1 1/2 cents higher, while March SRW and HRW wheat futures were up 1 3/4 to 2 cents. The grain futures markets overnight saw mild short covering amid the much-improved risk appetite in the general marketplace late this week. Traders will have to wait an extra day for the weekly USDA export sales report, out Friday due to the federal holiday on Monday. The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil futures prices are weaker and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.24 percent.
Global marketplace breathes sigh of relief as Trump backs off European countries’ Greenland-related tariffs, citing framework deal… President Trump Wednesday afternoon said he would refrain from imposing tariffs on goods from European nations opposing his effort to take possession of Greenland, citing a “framework of a future deal” he said was reached regarding the island, Bloomberg reported. Trump announced the decision after a meeting with North Atlantic Treaty Organization Secretary General Mark Rutte at the World Economic Forum in Davos, Switzerland, but did not detail the parameters of the framework. Danish Foreign Minister Lars Lokke Rasmussen welcomed the latest developments but added that it’s obvious that Trump has not given up on his ambition to gain control of Greenland, which is still “a red line for the Kingdom of Denmark.” Rutte said a breakthrough over Greenland was secured without discussing the territory’s sovereignty with President Trump. The discussion centered on regional security in the Arctic region and how to prevent Russia and China from accessing Greenland. Global stock and financial markets breathed a sigh of relief of the framework news. Global stock markets rallied and gold prices backed off, while the U.S. dollar and Treasury markets steadied.
Trump touts “Peace Board” in Davos… President Trump in a speech just concluded at the World Economic Forum in Davos, Switzerland said his new Board of Peace will work with the United Nations and work to end wars. He said only “little fires” are left regarding the war in Gaza, while saying Iran does want to talk to the U.S. Trump reiterated his desire for $1.5 trillion in annual U.S. defense spending. He said all NATO members have committed to spending 5% of the GDP on defense, except Spain.
Dangerous cold in northern Plains, Midwest; major winter storm in southern Plains, Mississippi Valley... Meanwhile, dangerously cold and very dry Arctic air will expand into the northern/central Plains, upper Midwest/Great Lakes today, before spilling out into the southern Plains, Mississippi Valley and Midwest tonight. This arctic blast will be accompanied by gusty winds, leading to dangerous wind chills. The coldest wind chills may fall below -50 across the northern Plains, with sub-zero wind chills reaching as far southeast as the mid-Atlantic, mid-Mississippi Valley and southern Plains. These wind chills will pose life-threatening risk of hypothermia and frostbite to exposed skin. Additionally, any power outages caused by the impending major winter storm could prolong and compound this risk. Meantime, a large, long-duration winter storm is tracking from the southern High Plains/Rockies to the Northeast. Heavy snow, sleet and freezing rain will proliferate across the southern Rockies/Plains into the mid-South beginning today, spreading eastward to the mid-Atlantic and New England this weekend. Extremely cold air behind the storm will prolong hazardous travel and infrastructure impacts. Widespread freezing rain and sleet are expected south of the primary snow axis, crippling portions of the southern Plains and lower Mississippi Valley on Friday. Significant and damaging ice accumulations are likely, with the potential for long-duration power outages, extensive tree damage, and extremely dangerous or impassable travel conditions. Dangerous ice and sleet impacts shift east into parts of the Southeast, Tennessee Valley and Mid-Atlantic this weekend. “The winter storm and cold will impact livestock, winter wheat and eventually sugarcane and citrus areas in the United States. The impact on crops should be much lower than the impact of ice and snow accumulations in the mid-south and middle Atlantic coast regions,” said Drew Lerner with World Weather Inc.
Japan’s government bond market stabilizes, at least for now… Japanese government bonds rebounded for a second straight session Thursday, led by super-long maturities as market sentiment steadied after a steep sell off earlier this week. The recovery followed calls for calm from Japanese Finance Minister Satsuki Katayama, with some fund managers viewing the recent jump in yields as an opportunity for buying the dip. Traders will be watching the Bank of Japan policy decision on Friday, and any comments on the market from Governor Kazuo Ueda, as well as an auction of 40-year Japanese bonds next week.
Swift: U.S. dollar continues to dominate global transactions—and its share is increasing… The U.S. dollar continues to dominate foreign exchange transactions and international currency usage, JPMorgan strategists wrote in a note this week, according to Bloomberg. Large global banks use Swift to communicate with each other and facilitate interbank currency deals. The U.S. dollar’s portion of international transactions rose to 50.5% in December, up from 46.8% a month earlier, according to Swift data. The greenback was followed by the Euro currency, which carried about a 22% share, then the British pound, Canadian dollar, Japanese yen and Chinese yuan in international transactions. The U.S. dollar’s share of global payments topped 50% for the first time since 2023, and its role in international finance and trade remains healthy despite growing talk of “de-dollarization” among some countries, including China, Brazil and India. Separate Bank of International Settlements data shows the U.S. dollar on at least one side of 89% of all foreign-exchange transactions as of April 2025, while the Federal Reserve estimates some 60% of all foreign currency debt is issued in U.S. dollars.
USDA announces New World Screwworm “Grand Challenge”… Secretary of Agriculture Brooke Rollins Wednesday announced the launch of the New World Screwworm (NWS) Grand Challenge. “This funding opportunity marks a pivotal step in USDA’s comprehensive strategy to combat NWS and prevent its northward spread,” said a USDA press release. “This is a strategic investment in America’s farmers and ranchers and is an important action to ensure the safety and future success of our food supply, which is essential to our national security,” said Secretary Brooke Rollins. “These are the kinds of innovations that will help us stay ahead of this pest and protect our food supply and our economy, protecting the way of life of our ranchers and go towards rebuilding our cattle herd to lower consumer prices on grocery store shelves…” As part of the Grand Challenge, USDA’s Animal and Plant Health Inspection Service (APHIS) will make up to $100 million available to support innovative projects that enhance sterile NWS fly production, strengthen preparedness and response strategies, and safeguard U.S. agriculture, animal health, and trade, said the press release.
Agri-Food Canada January outlook for principal field crops… For 2025-26, the outlook incorporates the results of Statistics Canada’s November farm survey of crop production. Production of all principal field crops is estimated to have increased 10% year-over-year, which is 16% above the previous five-year average. Carry-out stocks for all principal field crops are projected to increase significantly, by 67%, due largely to the increase in production and a projected 3% decline in exports. Prices for most principal field crops are forecast to be lower year-over-year, with the exception of soybeans and mustard seed. Wheat area is projected to decrease slightly by 0.3%. Coarse grains are forecast to increase by 2%, primarily due to higher barley acreage, while corn and oats remain steady and rye declines sharply. Oilseed area is anticipated to grow by 2%, supported by increases in canola, soybeans, and flax. Conversely, pulses and special crops are expected to fall significantly by 12%, with notable reductions in dry peas, lentils, chickpeas, dry beans, and canary seed. More details here.
Smithfield Foods says it will acquire Nathan’s Famous… The deal is reportedly valued at about $450 million, securing the rights to a key product in its business’s largest segment, reported Bloomberg. The acquisition will secure Smithfield’s rights to this iconic brand into perpetuity”, as the company already held an exclusive license to make and sell Nathan’s Famous products that expires in 2032. The deal is expected to close in the first half of 2026 and provide annual cost synergies of about $9 million within two years of closing, said the report. Smithfield’s packaged meats segment is its biggest in terms of revenue, followed closely by its fresh pork business. Nathan’s Famous, the roughly 110-year-old company best known for hosting the famed Coney Island hot dog eating contest on the Fourth of July, began selling its products in supermarkets in 1983.
Malaysian palm oil futures on three-day win streak… Malaysian palm oil futures rose for a third straight session on Thursday, hovering near MYR 4,200 per MT and reaching a seven-week peak. Strength in edible oils on the Dalian and Chicago markets boosted sentiment, alongside bets of firmer demand ahead of the Lunar New Year and Ramadan in February. Supply concerns also lifted appetite, with January output projected to fall 15%–17% due to seasonal factors. On the export front, cargo surveyors noted shipments during January 1–20 grew 8.6%–11.4% from the prior month, reinforcing signs of improving demand. Meantime, longer-term supply risks were underscored by tighter oversight of forest exploitation in top supplier Indonesia. Separately, the Malaysian Palm Oil Council expects prices to trade between MYR 4,000 and 4,300 in February. Gains remained capped by a stronger ringgit and Indonesia’s cancellation of the B50 biodiesel plan.
Cattle futures markets appear to be moving beyond NWS uncertainty, for now… February live cattle on Wednesday rose 72 1/2 cents to $233.10. March feeder cattle rose $1.70 to $359.375. The live and feeder cattle futures markets saw some chart-based buying Wednesday as the bulls have stabilized prices after last Friday’s NWS-inspired sell off. Improved risk appetite also supported some better buying interest in cattle futures. USDA Wednesday reported very light cash cattle trading so far this week at $233.00. The agency on Tuesday said last week’s cash cattle traded averaged $232.50, which was up 64 cents from the prior week average. Cattle producers in the Plains states are concerned about extreme cold and high winds in the northern Plains, and a major winter storm in the southern Plains producing livestock stress. Cattle traders are awaiting the monthly USDA cattle-on-feed report that is out Friday afternoon.
Lean hog futures pause… February lean hog futures on Wednesday closed steady at $87.85. Hog futures saw a pause after hitting a 3.5-month high on Tuesday. The premium futures hold to the cash hog and CME index suggest futures traders look for a higher cash hog market in the coming weeks. The latest CME lean hog index is up 27 cents at $82.03. Today’s projected cash index price is up another 37 cents at $82.40. Tuesday afternoon’s five-day rolling average cash hog price quote was $79.74.