Good morning!
Grain futures weaker overnight, except oats… As of 6:00 a.m. CST, March corn was down 2 1/2 cents. March soybeans were down 4 cents. March SRW and HRW wheat futures were down 2 1/2 to 4 cents. The corn and wheat futures markets are seeing corrective pullbacks from last week’s gains. While the U.S.-Ukraine peace talks on Sunday were deemed somewhat constructive (see item below), no breakthrough was achieved. Still, grain traders are giving a slightly bearish lean to the news. On a potentially positive note for the grain markets, March oats futures prices are up a bit and hit a three-week high overnight. The oats market has made a strong recovery from the mid-December contract low and is now trending up. Veteran CBOT grain floor traders used to tell me, “Oats knows,” regarding the ability of the diminutive oats futures market sometimes being able to foretell price moves in the bigger grains. The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are higher early today and trading around $58.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.11 percent.
Blizzard, bomb cyclone pound upper Midwest… The National Weather Service today said an intense cyclone across the northern tier of the country has produced heavy snow and blizzard conditions across the upper Midwest to the Great Lakes, freezing rain across New England, a quick round of heavy rain and thunderstorms through the eastern U.S. and across the South, as well as widespread blustery winds to locally damaging winds to these areas. As this system reaches peak intensity early this morning, blizzard conditions can be expected, especially over the central Great Lakes. Meanwhile, a mix of snow sleet and freezing rain will spread quickly through New England. Snowfall amounts are expected to well exceed a foot across the upper Great Lakes. The storm center is forecast to move relatively quickly into southeastern Canada. For the lower Great Lakes, rain showers associated with the potent cold front early this morning will change over to lake-effect snows during the day. These lake-effect snows are expected to linger through Wednesday morning (and beyond) as an Alberta clipper brings a round of light snow across the upper Midwest on Tuesday, spreading into much of the Great Lakes by Tuesday evening. Winter precipitation aside, the Arctic cold front sweeping south will bring a drastic end to the recent record warm spell across the central U.S. to the South. High temperatures today will be 30 to 40 degrees colder than yesterday across much of the nation’s midsection. The tail end of the Arctic front across southeastern New Mexico and Southwest Texas will bring accumulating snow with local blizzard conditions and could bring locally more than 6 inches of snowfall.
Trump, Ukraine’s Zelenskiy talk, but no breakthrough… President Trump said he made “a lot of progress” in talks with Ukrainian President Volodymyr Zelenskiy on Sunday over a possible peace deal, but that it might take a few weeks to get it done. Zelenskiy said the peace framework is “90% agreed” and that U.S.-Ukraine security guarantees are “100% agreed,” but major sticking points remain, including the future of Ukraine’s Donbas region. Trump said he would be willing to speak to Ukraine’s parliament or hold a trilateral meeting with Zelenskiy and Russian President Vladimir Putin, and that he aims to convene a meeting with Zelenskiy and European leaders in January. The tone of the Trump-Zelenskiy news conference after the meeting in Florida was warm, even as it became clear that Trump isn’t much closer to his goal of ending the war that began with Russia’s invasion of Ukraine in 2022.
Copper, gold and silver futures see profit taking today, after notching new all-time highs… Copper futures overnight climbed to $5.80 per pound, hitting new record levels on tight global supplies. London Metal Exchange futures reached $12,960 a ton, tracking strong gains in Shanghai and New York. The red industrial metal then sold off on profit taking. Copper prices have surged over 15% in December alone, with year-to-date gains approaching 50% amid supply concerns. Meantime, gold and silver prices have also backed off to start this New-Year’s-holiday-shortened trading week, on profit taking after hitting record highs. February gold futures on Friday hit a record high of $4,584.00 an ounce, while March silver futures overnight notched an all-time high of $82.67 an ounce, before retreating.
Chinese yuan slips from 15-month high vs. U.S. dollar… China’s offshore yuan currency weakened to around 7 per U.S. dollar on Monday, easing from a fifteen-month high as investors turned cautious amid China’s central bank efforts to temper rapid one-way moves. The People’s Bank of China set a slightly softer-than-expected midpoint, signaling its intent to rein in excess yuan strength, while state-run media cautioned against betting on unilateral appreciation. Analysts also noted that seasonal foreign exchange flows and rising demand have supported the yuan’s broad uptrend, but appreciation pressure is expected to ease once year-end settlements conclude. Despite short-term caution, global investors continue to expect the yuan’s momentum to persist into 2026, with the key 7 level likely to be tested again, even as authorities reaffirm their commitment to maintaining currency stability. The yuan has gained more than 4.1% against the U.S. dollar so far this year and is on track to log the biggest annual rise since 2020. TradingEconomics.com
Malaysian palm oil futures prices dip… Malaysian palm oil futures slipped below MYR 4,080 on Monday, easing after four straight sessions of gains as traders booked profits following last week’s two-week high. Softer edible oils on the Dalian exchange also weighed on sentiment entering the final week of 2025, leaving futures on track to end the year down about 8.5%, reversing last year’s solid rise. Still, losses were offset by a weaker ringgit and firmer exports, with cargo surveyors noting shipments of palm oil products during Dec. 1–25 rose 1.6% to 3% from the prior month. Demand signals added support: November imports by top buyer India grew around 5% from October on more attractive prices, while key consumer China pledged renewed fiscal measures to boost consumption, employment, and household incomes next year. Separately, Indonesia, the world’s largest producer, resolved key issues in a tariff pact with the U.S., with a deal expected in late January that may include exemptions for select products, including palm oil.
Cattle futures markets see Christmas holiday pauses… February live cattle on Friday rose $1.10 to $229.65, leaving it down $1.15 for the week. January feeder cattle gained $1.625 to $340.425, gaining $1.025 on the week. The live and feeder cattle futures saw chart consolidation amid light, holiday-thinned cash and futures activity last week, after both markets hit two-month highs last Monday. The charts remain overall bullish for the live and feeder cattle futures markets, suggesting the path of least resistance for prices will remain sideways to higher in the near term.
Profit-taking pressure in lean hog futures… February lean hog futures on Friday lost 52.5 cents to close at $84.525, a gain of 2.5 cents on the week, after hitting a two-month high last Tuesday. Hog futures pulled back after last Tuesday afternoon’s quarterly Hogs and Pigs Report from USDA showed an unexpected expansion of the U.S. herd. The near-term technical posture for the lean hog futures market remains overall bullish, as prices remain in an uptrend on the daily bar chart. That should keep the speculative hog traders leaning toward playing the long side of the market in the near term.