Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn was down 1/4 cent. March soybeans were 3 cents higher, while March SRW and HRW wheat futures were up 2 3/4 to 4 1/4 cents. Today’s feature in the grains is the weekly USDA export sales report for the week of Jan. 15 (delayed one day by the federal holiday Monday). This morning’s report is expected to show weekly U.S. corn sales of 1.9 million to 3.1 million MT for the 2025-26 marketing year, and sales of zero to 100,000 MT for the 2026-27 marketing year. U.S. soybean export sales are seen at 1.5 million to 3.0 million MT for the 2025-26 marketing year, with sales of zero to 200,000 MT for the 2026-27 marketing year. Weekly U.S. wheat export sales are seen at 150,000 to 450,000 MT for the 2025-26 marketing year. These figures came from a Reuters survey of analysts. The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil futures prices are higher and trading around $60.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.24 percent.
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Dangerous cold, high winds, ice, snow gripping much of the United States… Bitterly cold temperatures over the Plains, the Great Lakes and the Northeast/mid-Atlantic are forecast for the next three days. Farther south, a major winter storm will produce a significant, long-duration event, with widespread heavy snow, sleet, and freezing rain from the southern Rockies to New England, lasting from Friday through Monday. The storm develops heavy snow across a broad region from the southern Rockies and Plains through the mid-Atlantic and into the Northeast. Snowfall totals exceeding 12 inches are likely across the Ohio Valley, mid-Atlantic and Northeast, creating widespread travel disruptions. In addition, widespread freezing rain and sleet are expected across the southern Plains, the Lower Mississippi Valley, the Tennessee Valley, and the Southeast. The storm will cause significant to locally catastrophic ice accumulations with the potential for long-duration power outages, extensive tree damage, and extremely dangerous or impassable travel conditions. In the wake of the storm, communities from the southern Plains to the Northeast will contend with bitterly cold temperatures and dangerously cold wind chills. This will cause prolonged hazardous travel and infrastructure impacts. Meantime, heavy lake-effect snow will develop over the Great Lakes from Friday through early Saturday morning. By Sunday, heavy snow from the storm over the Ohio Valley will inch into the Great Lakes. Additionally, upslope flow will create snow over parts of the northern/central High Plains through late Friday night.
Corn growers, ethanol industry dismayed as Congress ignores year-round E15 funding… Last-minute legislative deal-making left language out of U.S. government funding bills that would have allowed year-round use of E15—a gasoline blend containing 15% ethanol. Instead, lawmakers established a study group to advance separate legislation in February. “Corn growers are disgusted, disappointed and disillusioned that after spending years of calling for passage of E15, Congress has again punted, and it has done so in a spectacularly weak and offensive way,” said National Corn Growers Association President Jed Bower, in a statement. Rep. Zach Nunn, an Iowa Republican, and other Midwestern lawmakers had threatened to block the funding package without a deal to approve year-round sale of E15, Politico reported. E15 sales currently face limits during summer months due to air quality regulations. Ethanol stakeholders roundly panned the idea of setting up a council at this stage in the process. Sen. Charles Grassley, an Iowa Republican, put the blame on opposition from small refineries and told Brownfield Ag News that a February deal could also see E15 legislation as part of a package that includes a second round of financial support for farmers.
Japan’s government bond market a bit calmer to end trading week… Japan’s shorter-maturity bond yields rose after the Bank of Japan raised its inflation outlook, while pressure on the long-end continued to ease following a sharp selloff earlier this week. The two-year bond yield rose 2.5 basis points to 1.24%, and the five-year rate climbed 2 basis points to 1.68%. The 40-year bond yield fell 5.5 basis points to 3.94% after reaching its highest since its debut earlier this week on Prime Minister Sanae Takaichi’s election pledge to cut taxes, Bloomberg reported. The BOJ left its policy rate unchanged Friday at 0.75%, while board member Hajime Takata voted for a back-to-back rate hike. In its latest quarterly outlook, the bank revised up four out of six of its inflation projections and reiterated its intention to raise borrowing costs if its outlook materializes.
EU unfreezes trade deal with U.S., plans on vote for ratification… European Union lawmakers are expected to vote on ratifying the bloc’s trade deal with the U.S. after President Trump on Wednesday walked back his latest threat to impose tariffs on European countries. The trade deal’s ratification process was suspended after Trump indicated he wanted to acquire Greenland. However, after Trump announced a framework deal with NATO on Greenland and said the U.S. was cancelling new tariffs on EU countries,European Parliament President Roberta Metsola said that reversal was enough to justify voting on the measure, which could have a preliminary vote in the coming days. “This means we can continue with our discussions internally with the EU-U.S. trade deal, which had been paused,” Metsola said Thursday before an emergency meeting of EU leaders. “I’ll be taking it forward with my colleagues to be able to proceed,” she said and as reported by Bloomberg.
New details on U.S.-EU framework on Greenland… The deal between President Trump and NATO Secretary General Mark Rutte paves the way for NATO to beef up security in the Arctic region and fend off any threat from Russia or China, Bloomberg reported. The framework entails the stationing of U.S. missiles, mining rights aimed at keeping Chinese interests out, and a bolstered NATO presence, according to a European official briefed on the talks. The issue of sovereignty was not on the table, with Danish Prime Minister Mette Frederiksen emphasizing that ceding territory to the U.S. is non-negotiable and that any agreement must respect international law and sovereignty, said the Bloomberg report. “We didn’t go into those details at all,” Rutte said. Nor was the issue of an increased U.S. troop presence, although the Danish government has said it’s “completely open” to such a scenario, Rutte said.
U.S. envoys, Putin resume Russia-Ukraine peace talks… Russian President Vladimir Putin began talks with U.S. envoys Steve Witkoff and Jared Kushner in the Kremlin on the latest peace plan aimed at ending his war in Ukraine, Bloomberg reported. Kremlin foreign policy aide Yuri Ushakov and Putin’s envoy Kirill Dmitriev are also attending the talks, according to the presidential administration. Josh Gruenbaum, commissioner of the U.S. General Services Administration’s Federal Acquisition Service, is also taking part, Bloomberg said. U.S. and Ukrainian officials have said they’ve made significant progress on a 20-point plan to end the Russian full-scale invasion that’s lasted almost four years. However, The Kremlin said today the “territorial issue” remains unresolved after Putin held late-night talks with the U.S. envoys. There’s “no hope of achieving a long-term settlement” to the war until Russia’s demands for territory in Ukraine are accepted, Ushakov, said in an audio recording on Telegram early Friday. That’s even as he characterized the almost four hours of negotiations in the Kremlin as “exceptionally substantive, constructive.”
U.S. natural gas futures prices back down a bit; Europe gas usage soars… U.S. natural gas futures pared a record breaking three-day rally, after traders mostly factored into prices a developing massive winter storm over much of the U.S. Front-month natural gas futures contracts dropped as much as 7.6% to $4.660 per million British thermal units on Friday, after surging 63% over the previous three sessions. Prices were still on track for their biggest weekly gain in records going back to 1990. Meantime, Europe is leaning more heavily on gas reserves this winter due to unusually cold weather and pipeline and LNG flows not meeting higher energy needs, Bloomberg reported. European gas prices have surged more than 30% this month and stockpiles are now less than half full, with Wood Mackenzie Ltd. seeing them ending winter at 20%. “New LNG supply coming online in the spring may help Europe fill storages, but some analysts believe government intervention, such as subsidies tied to storage targets, may be necessary to support injections ahead of the refill season,” said Bloomberg.
India canceling South American soybean oil shipments… India, the world’s largest vegetable oil buyer, canceled more soybean oil shipments from South America as the Indian rupee currency slumped to a record low that widened the price gap between local and imported oil, Bloomberg reported. About 35,000 to 40,000 tons of the commodity from Brazil and Argentina, booked for delivery in February and the April-July period, have been scrapped, with total cancellations likely to exceed 50,000 tons, said Aashish Acharya, vice president at Patanjali Foods Ltd., one of India’s top vegetable oil buyers, Bloomberg said. Several other traders contacted by Bloomberg confirmed the action. The latest development comes after Indian buyers backed out of more than 100,000 tons of Argentinian deals in December, equivalent to roughly 20% of what the country imports in a month. India relies on overseas purchases for nearly 60% of its edible oil consumption. “A weaker rupee and higher global prices have pushed up South American soy oil to trade at $25 to $30 a ton higher than local supplies, Acharya said in an interview. That disparity has made imports more expensive and uneconomical, prompting buyers to cash out, and instead look at the tropical oil which has been trading at attractive discounts, he said and as reported by Bloomberg.
Malaysian palm oil futures prices slip… Malaysian palm oil futures slipped below MYR 4,200 per MT on Friday, ending a three-session rally as a firmer ringgit and profit-taking weighed after prices hit a seven-week top in the prior session. Sentiment was further dampened by weaker palm oil contracts on the Dalian exchange and lower soyoil prices in Chicago. Still, the market remains on track for a third weekly gain, up more than 2% so far, supported by expectations of stronger demand ahead of the Lunar New Year and Ramadan in February, alongside tighter near-term supply, with January output projected to fall 15%–17% due to seasonal factors. On the demand side, cargo surveyors reported January 1–20 shipments rising 8.6%–11.4% from the prior month, reinforcing signs of improving exports. Meanwhile, longer-term supply concerns persist due to stricter oversight of forest exploitation in Indonesia, the top supplier. Looking ahead, the Malaysian Palm Oil Council expects prices to trade in the MYR 4,000–4,300 range in February.
Mild profit-taking, position evening in cattle futures ahead of COF report… February live cattle on Thursday fell 72 1/2 cents to $232.375. March feeders fell 10 cents to $359.275. The live cattle futures market saw some mild profit taking and position-squaring, while feeder cattle futures saw a pause in quieter trading, as market participants await this afternoon’s monthly USDA cattle-on-feed report. A Reuters survey of analysts expects the report to show cattle on feed as of Jan. 1 at 96.8% of the level seen one year ago at the same time. Placements in December are seen at 93.5% of a year ago. Marketings in December are expected by analysts to be at 101.5% of one year ago at the same time. USDA Thursday reported very light cash cattle trading so far this week, with steers averaging $232.70 and heifers $232.44. The agency Tuesday said last week’s cash cattle traded averaged $232.50, which was up 64 cents from the prior week average.
Chart-based buying in lean hog futures as technicals remain bullish… February lean hog futures on Thursday rose 62 1/2 cents to $88.475 and hit a 3.5-month high. Hog futures saw some technical buying early and then some mild profit taking by the shorter-term speculators later in the session, to take prices off their daily highs. The premium February futures hold to the cash hog and CME index indicates futures traders look for a higher cash hog market in the coming weeks. Cash hog prices are on the rise this week. The latest CME lean hog index is up 37 cents at $82.40. Today’s projected cash index price is up another 67 cents at $83.07. The national direct five-day rolling average cash hog price quote Thursday was $60.71.