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Grain futures mostly weaker overnight, amid gold, silver meltdowns… As of 6:00 a.m. CST, March corn was down 2 1/2 cents. March soybeans were 6 cents lower, while March SRW and HRW wheat futures were down 1/4 to 1 1/2 cents. It appears grain futures traders are closely eyeballing outside markets, which lean price-bearish for the grains on this last trading day of the week and of the month: Gold and silver prices are strongly lower, U.S. stock indexes are sharply down, the U.S. dollar index is higher and crude oil prices are weaker. The yield on the benchmark 10-year U.S. Treasury note is presently 4.255 percent.
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Kevin Warsh is Trump’s choice for next Fed chair; markets react… President Trump announced on social media that he has selected Kevin Warsh to be the next Federal Reserve chair. Reports surfaced late Thursday that Warsh would be Trump’s new Fed chair nominee. U.S. stocks dropped sharply and U.S. Treasury yields pushed higher, while gold and silver prices posted strong losses, following the Warsh news, while the U.S. dollar index rose. These markets’ reactions reflected speculation Warsh may be less enthusiastic to cut interest rates than other Fed chair candidates, given his past warnings of inflation risks and more recent calls for the Fed to reduce its balance sheet. However, Warsh has more recently echoed Trump’s criticism of the Fed for being too slow to ease its monetary policy. “He’s a hawk,” said CNBC commentator Joe Kernen, regarding Warsh’s stance on U.S. monetary policy. “That’s good for the stock market longer-term, but not right now,” Kernen said.
Cold, stormy weekend for eastern 2/3 of U.S.… The National Weather Service today reports an arctic air mass that has been anchored over eastern Canada through late January is now being unleashed southward toward the eastern two-thirds of the U.S. The core of the arctic air is forecast to dive unusually far south into the southeastern U.S. this weekend before exiting the coast. As the core of the extremely cold air moves over the still very warm gulf stream, the potential energy unleashed will result in the formation of a coastal cyclone that could intensify explosively just off the southeastern U.S. later this weekend. A patch of snow ahead of the core of the arctic air is moving into Kentucky this morning. On Saturday a cyclone begins to form off the Carolina coast. Saturday night into Sunday should see the cyclone intensifying most rapidly while expanding in size off the Mid-Atlantic coast. In the intermountain West region, the higher elevation regions in the mountains will see snow and mixed precipitation to parts of Idaho, Montana, and Wyoming. Meanwhile in the Northern Plains, the arctic air mass will bring snowfall to the Dakotas and Nebraska through this evening. By Saturday, an Alberta clipper is forecast to bring a period of snow across the northern Plains before the snow ends as a wintry mix or rain later that day. The snow is forecast to reach the upper Midwest Sunday morning. Numerous daily record low temperatures are expected throughout portions of the upper Ohio Valley and Mid-Atlantic. Dangerously cold temperatures and record low temperatures are then expected to reach the Southeast this weekend.
Major U.S. government shutdown averted…President Trump and U.S. Senate Democrats have reached a tentative deal to avoid a disruptive federal government shutdown as the White House continues to negotiate with the Democrats on placing new limits on immigration enforcement policy. “Trump announced that an agreement had been reached and urged both parties to vote for it. However, lawmakers are almost certain to fail to enact the measure before a Friday night deadline. While a short funding lapse and partial government shutdown is now seen as the most likely scenario, the effect on federal operations would be minimal if it’s swiftly resolved within a couple days,” Bloomberg reported. The deal between Trump and Democrats makes it more likely that lawmakers would be able to avoid a long shutdown, which occurred last year.
Crude oil prices hit six-month high Thursday… Nymex WTI crude oil futures on Thursday rose more than 3.5% to around $65.50 a barrel, the highest intraday level since last September and nearing the strongest close since last August, as geopolitical risk premiums increased following renewed U.S. threats against Iran. Prices backed off a bit overnight. President Trump warned Tehran to agree to a nuclear deal or face military strikes, saying U.S. naval forces in the region were prepared to act if necessary. The prospect of a U.S. strike against Iran raised concerns over potential disruptions to Middle Eastern crude oil flows, which account for roughly one-third of the global oil supply, while any Iranian retaliation could threaten shipping through the Strait of Hormuz, a key route for oil and liquified natural gas. Oil prices have risen this early year despite expectations of oversupply and forecasts late last year for a global crude oil glut in 2026.
Intense heat wave bakes much of Australia, damaging crops… World Weather Inc. today issued a special report saying an intense heat wave continues to bake a large section of Australia in recent days. Daytime highs peaked well above 100 degrees for a week in portions of interior Victoria, New South Wales, Queensland, and South Australia with extreme highs of 115 to 122 common. The harsh environment sees coarse grain, oilseeds, and cotton all suffering from the excessive heat and dryness with livestock in the hottest regions being severely stressed, resulting in health issues and poor weight gains. The dangerous heat will persist today before gradually coming to an end over the weekend. “Crops may continue to wither before rain slowly increases this weekend into the middle of next week. Despite the cooler conditions and spotty rain, production potentials for some crops may have dipped below normal due to the harsh environment,” said the forecaster.
Deere & Co. stock touches record high… Deere & Co. shares on Thursday briefly touched an intraday record high, capping off a rally that’s come as interest-rate cuts and strong U.S. growth push investors into sectors of the market closely linked to the health of the economy. The stock rose as much as 2.3% Thursday morning, touching a high of $537.26. Caterpillar Inc. said Thursday that its seen retail sales have risen more than the firm expected in the construction sector, which Deere also serves.
Texas governor issues disaster declaration on New World Screwworm… Texas Governor Greg Abbott late Thursday issued a statewide disaster declaration to “better equip the Texas New World Screwworm Response Team to prevent the potential spread of the NWS fly into Texas and to better protect livestock and wildlife,” said a press release from the governor. “Although the New World screwworm fly is not yet present in Texas or the U.S., its northward spread from Mexico toward the U.S. southern border poses a serious threat to Texas’ livestock industry and wildlife,” said Abbott. “State law authorizes me to act to prevent a threat of infestation that could cause severe damage to Texas property, and I will not wait for such harm to reach our livestock and wildlife,” Abott said via the press release.
CFTC to regulate prediction markets… Wall Street’s main derivatives regulator will write new rules for the multi-billion dollar prediction markets industry, the head of the Commodity Futures Trading Commission said Thursday and as reported by Bloomberg. “It is time for clear rules and a clear understanding that the CFTC supports lawful innovation in these markets,” Chairman Michael Selig said in prepared remarks. “Consistent with my commitment to fostering responsible innovation in crypto asset markets, I will continue to support the responsible development of event contract markets.” Prediction market platforms like Polymarket and Kalshi Inc. allow customers to buy yes-or-no positions on a wide range of future events, from whether the U.S. government will shut down on Saturday to which movie will win the Oscar for best picture. Trading activity on prediction market platforms has surged, despite opposition from some state gaming regulators.
Malaysian palm oil futures slip after four-session rally… Malaysian palm oil futures slipped around 2% to below MYR 4,240 per MT on Friday, ending a four-session rally as traders booked profits after prices hit a three-month high earlier in the week. Weakness in rival edible oils on the Dalian and Chicago exchanges added pressure, compounded by caution ahead of China’s January PMI release, given the country’s role as a key buyer. Still, futures remain on track for a fourth consecutive weekly gain, up about 1.8%, which would mark the first monthly rise in five months with gains nearing 5%. The broader uptrend is underpinned by stronger export demand, with January 1–25 shipments rising 7.97%–9.97% from December. Seasonal demand ahead of the Lunar New Year and Ramadan, coupled with expectations of lower January output due to adverse weather and harvesting patterns, also support prices. In India, the top buyer, refiners canceled soybean oil imports from South America amid a weaker rupee and higher global prices, boosting palm oil’s appeal.
Cattle futures see mild profit taking…. April live cattle on Thursday fell $1.45 to $237.275, near the session low and hit a three-month high early on. March feeder cattle lost 72 1/2 cents to $365.125, near the daily low and hit a three-month high early on. The cattle futures markets saw some mild technical buying from the chart-based speculators early in Thursday’s session. However, in late trading more profit-taking pressure set in, pushing prices lower. USDA Thursday reported very light cash cattle trading activity so far this week, averaging $234.20. USDA Monday reported average cash cattle trading last week at $234.70, up $2.20 from the week prior. Cattle traders are awaiting this afternoon’s semi-annual USDA cattle inventory report. Most traders expect the report to show U.S. cattle numbers inching down from the last report in July.
Lean hog futures mildly buy Wednesday’s dip… April lean hog futures on Thursday rose 30 cents to $95.45. Hog futures saw the bulls step in to mildly buy Wednesday’s dip as the bulls have regained their footing late this week. The latest CME lean hog index is up 79 cents at $85.22. Today’s projected cash index price is up another 26 cents at $85.48. The national direct five-day rolling average cash hog price quote from Wednesday afternoon was $60.81.