Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, March corn was up 2 cents. January soybeans were 3/4 cent higher. March HRW and SRW wheat futures markets were up 2 to 2 1/2 cents. The grain market bulls are working to stabilize prices. However, price action the past week may be forming bearish pennant or flag patterns on the daily bar charts. Corn, soybean, meal and winter wheat bulls need to step up and show power this week because the confident, chart-based speculative bears are licking their chops. The key outside markets early this morning see the U.S. dollar index slightly lower. Nymex crude oil prices are slightly down and trading around $58.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.03 percent.
Storms brewing for Midwest, Plains… The National Weather Service today said a deepening upper-level trough interacting with an invasion of polar air from western Canada will send a clipper type low-pressure system from west to east across the northern tier states for the next couple of days. This clipper is forecast to intensify and expand in size as it gradually engulfs another low pressure/frontal system which is bringing heavy rain and severe thunderstorms across the deep South today.A cold rain is expected to fall across the northern Plains today prior to the arrival of the clipper system. Falling temperatures with rain changing to moderate to locally heavy snow together with strong and very gusty westerly winds will signal the passage of the system center. By tonight, the clipper is forecast to intensify further, bringing with it rain and possibly embedded thunderstorms into the upper Midwest ahead of a cold front. Areas just north of the track of the system center will see rain changing to locally heavy snow with very gusty winds. By Wednesday, the entire system will intensify and expand further and will begin to engulf the other frontal and low-pressure system farther to the south. Moderate to heavy snow will overspread the upper Great Lakes on Wednesday, while rain across the remainder of the Great Lakes will change over to snow from west to east from Wednesday night into Thanksgiving morning on the back side of the continually expanding low pressure system.Snowfall amounts will progressively increase from west to east across the northern Plains, with highest totals of over a foot likely downwind from the snow belt of Lake Superior. Polar air will engulf much of the central and eastern U.S. by Thanksgiving morning behind the cold front as the huge circulation of the low-pressure system begins to exit into southeastern Canada.
Barrage of U.S. economic data today, Wednesday… A very heavy slate of U.S. economic data due out today includes September weekly USDA export sales, the USDA outlook for U.S. agricultural trade, retail sales, the September producer price index, pending homes sales, the Richmond Fed business survey, the monthly house price index, the consumer confidence index, manufacturing and trade inventories and the monthly Treasury budget statement. Wednesday comes the weekly jobless claims report, durable goods orders, the second estimate of third-quarter GDP, the advance economic indicators report, the Chicago ISM business survey, personal income and outlays (including the key inflation gauges), new residential sales, the weekly DOE liquid energy stocks report, and the Federal Reserve’s beige book.
U.S., Russian officials meet to discuss Russia-Ukraine peace deal… A U.S. official is in Abu Dhabi for meetings with a Russian delegation as President Trump cited progress on his peace proposal and Moscow and Ukraine carried out airstrikes overnight. U.S. Army Secretary Dan Driscoll met with Russian officials in Abu Dhabi for several hours on Monday night and held talks with them on Tuesday as well, according to a U.S. official and as reported by Bloomberg. Kremlin spokesman Dmitry Peskov said he had nothing to say on reports of the meeting, according to the Interfax news service. The talks occurred after Trump suggested in a social media post that “big progress” was being made on a deal for Ukraine. His comment signaled that Secretary of State Marco Rubio and Ukrainian officials who met Sunday in Geneva made advances in defusing the vehement opposition from Kyiv and its European allies to a 28-point peace proposal the White House team floated last week. Moscow and Kyiv exchanged fire overnight with heavy air raids on Kyiv and assaults on southern Russian areas.
Trump, Xi had upbeat phone conversation Monday… President Trump and Chinese President Xi Jinping on Monday held their first talks since agreeing to a tariff truce last month, discussing trade, Taiwan and Russia’s invasion of Ukraine. Trump said the telephone call was “very good” and that the leaders spoke about purchases of soybeans and other farm products as well as curbing shipments of illegal fentanyl, as reported by Bloomberg. Trump said he agreed to visit Beijing in April, and that he had invited Xi for a state visit next year. “Our relationship with China is extremely strong!” Trump posted on social media. “There has been significant progress on both sides in keeping our agreements current and accurate. Now we can set our sights on the big picture.” Xi told Trump that the return of Taiwan to China is a key part of the post-World War II international order, according to a Chinese Foreign Ministry statement. The Chinese leader also said the two countries should keep the positive momentum generated during their meeting last month in South Korea and expand cooperation, the statement said. The leaders also spoke about Russia’s invasion of Ukraine and Xi expressed hope for the two sides to reach a binding peace agreement, the ministry said.
China soybean oil exports surge… China’s exports of soybean oil to India have risen sharply as weak domestic demand coincides with robust imports of soybeans from South America and more recently the U.S, reports Bloomberg. China shipped a record 70,877 tons of the cooking oil in October, according to customs data, most of which went to India. Exports in the first 10 months of the year reached 329,000 tons, almost triple what they were for all of 2024. China has long viewed its dependence on foreign soybeans as a vulnerability in a world where geopolitics and viruses can quickly disrupt commodity flows. However, robust imports from South America are hitting a tepid local economy, forcing Chinese soyoil processors to seek new markets. “It’s another example of flagging consumption in China resulting in a surplus, with the excess flooding into global markets. In this case it’s a development that’s welcome in India, the world’s biggest importer of soybean oil. This newly forged trade route is likely to become busier, as China returns to buying U.S. soybeans after last month’s trade truce, and relations between Beijing and New Delhi improve. The trade makes logistical sense for India, said Aashish Acharya, a vice president at Patanjali Foods Ltd., one of the country’s top vegetable-oil buyers,” said Bloomberg. Chinese soybean oil is trading at a discount of $10 to $15 a ton to that from South America and can reach India’s east coast in about 10 to 12 days, compared with the 50- to 60-day journey from Brazil and Argentina, Acharya said. China is the world’s biggest producer of soybean oil, producing around 20 million tons a year.
Stats Canada: lower field-crop exports, much higher ending stocks… Statistics Canada Monday reported its October outlook report for the 2025-26 crop year. Production of all principal field crops is estimated to have increased 2.6 % year-over-year (y/y), which would be 8% above the previous five-year average, largely due to improved yields y/y in western Canada. Harvest in western Canada is complete. Initial indications from the Canadian Grain Commission (CGC) on grain harvest and export quality suggest that the quality of the 2025 western Canadian crop is generally normal to above normal, except for durum. In eastern Canada, harvest is winding up, with better-than-anticipated yields despite drier-than-normal conditions across parts of Ontario, Quebec, and much of the Maritimes. Supplies of principal field crops are up marginally from last year as a lower carry-in moderates the rise in production. Demand for Canada’s principal field crops remains strong with usage of grains and oilseeds forecast to fall slightly while total demand for pulses and special crops increases by 4%. Total domestic use is projected slightly up on higher consumption of grains and oilseeds, while Canadian consumption of pulse and special crops falls marginally. Exports of CGC-monitored crops are down 10% compared to November last year, mostly due to lower canola shipments, while domestic disappearance is ahead of last year’s pace. Carry-out for all principal field crops is projected to rise by about 30% on increased ending stocks for both grains and oilseeds, and pulses and special crops. Prices for most principal field crops are lower y/y except for flaxseed and mustard, which are up slightly.
Malaysian palm oil futures dip… Malaysian palm oil futures on Tuesday slipped for the fourth straight session, hovering near MYR 4,025 per MT and touching their lowest level since the end of June. Sentiment weakened as a firmer ringgit made exports less attractive, and softer palm oil contracts on the Dalian exchange added additional pressure. Expectations of slower shipments also weighed on the market ahead of cargo surveyor data for November 1–25, with early estimates for the first 20 days of the month pointing to a 14.1%–20.5% month-on-month decline. Adding to the bearish tone, the Malaysian Palm Oil Board set a lower crude palm oil reference price for December, while industry data showed October output surged 11.02% to its highest since August 2015 and stocks rose to a 6-1/2-year high. Still, losses were partly offset by hopes that India, the world’s top buyer, could boost palm oil imports by about 20% in the new marketing year, supported by more competitive prices that may help the tropical oil regain market share.
Cattle futures see panic liquidation… February live cattle futures on Monday fell the daily trading limit of $7.25 to $207.525. January feeder cattle also dropped the daily trading limit of $9.25 to $304.975. Both markets hit nearly five-month lows. Daily trading limits in both markets will be expanded today. The live and feeder cattle futures markets have suffered another major psychological blow following news late last Friday that Tyson Foods Inc. said it is ending operations at a beef plant in Lexington, Nebraska and cutting a shift at an Amarillo, Texas facility. Cattle futures traders are presently badly spooked, which is prompting panic long liquidation and likely some margin-call selling by speculators. A big drop in the average cash cattle price fetched last week also pressured futures Monday. USDA at midday Monday reported cash cattle trading last week averaged $217.41. That’s $7.65 below the prior week’s USDA average of $225.06. Bulls on Monday got no help from another bullish, but mostly as expected, USDA cattle-on-feed report released last Friday afternoon.
Short covering in lean hog futures… February lean hogs on Monday rose $1.475 to $79.175. Lean hog futures market saw more short covering to start the holiday-shortened trading week. However, gains were somewhat limited by steadily declining cash hog prices. Lean hog futures’ discount to the cash market also worked in the hog futures bulls’ favor today. Hog futures bulls, at least for today, brushed aside limit-down trading in live and feeder cattle futures to start the trading week. Speculative spreaders on Monday were also likely buying hog futures and selling cattle futures. The latest CME lean hog index is down another 90 cents at $84.81. Today’s projected cash index price is down $1.20 to $83.61. Monday’s national direct 5-day rolling average cash hog price quote is $74.35.