Good morning!
Grain futures firmer overnight… As of 6:00 a.m. CST, March corn was up 3/4 cent. March soybeans were 1 1/4 cents higher, while March SRW and HRW wheat futures were down 1/4 cent to up 1 cent. The grain markets bulls have lost some steam early this week. The technically bearish outside-days down in March soybeans and March meal on Monday limited buying interest in the soy complex overnight. The meal futures market holds the key for soybeans, and meal looks sickly again, after Monday’s solid losses. The key outside markets today see the U.S. dollar index down a bit after hitting a four-month low Monday. Nymex crude oil futures prices are firmer and trading around $61.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.21 percent.
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Snow in the Northern Plains later this week; another major winter storm may be brewing… The National Weather Service today reports light snow will develop over the northern intermountain region Wednesday into Thursday. In addition, upslope flow will develop snow over the Northern Plains on Thursday. A front over the upper Great Lakes will move out over the Atlantic overnight. The system will produce lake-enhanced snow over the Great Lakes through this evening. Lake-effect snow will develop over the Great Lakes through Wednesday morning. Colder-than-normal temperatures will continue over much of the eastern half of the U.S. through the end of the week. The NWS warned of another potential significant winter storm later this week. That system will bring in another blast of arctic air, keeping parts of the U.S. in a deep freeze as it spreads to the East, Southeast and stretches into Florida.
Trump in Iowa at midday, corn producers hopeful he will support year-round E15… President Trump comes to Clive, Iowa today to talk about the economy and energy, with speculation running high for a biofuels-related announcement after farm groups were angered last week over the failure of lawmakers to include year-round E15 approval in funding legislation. Ahead of Trump’s midday visit, the Clean Fuels Alliance urged the president to release proposed rules for the 45Z Clean Fuels Production tax credit. The call comes after the Office of Management and Budget completed a review of the proposed rules. “Our progress is threatened by delays in policy decisions that should have been made by the preceding administration. We anticipate that you will quickly finalize these policies and secure your promise as the most pro-biofuel president in history,” the group said in a letter to Trump.
China turning to purchasing cheaper Brazilian soybeans… China has ramped up its orders for Brazilian cargoes of soybeans after meeting an initial shipment volume from the U.S. as part of a trade truce with Washington reached last fall. “In the past week, importers have booked at least 25 cargoes of the beans for loading mainly in March and April, driven by margins, according to traders with knowledge of the deals. At the same time, state-owned companies have appeared to refrain from taking U.S. cargoes, said the people, who declined to be named as they were not authorized to talk to the media,” Bloomberg reported. China has purchased about 12 million tons of U.S. soybeans in the last three months, meeting a commitment outlined by the Trump administration in November. “It makes complete sense to step up purchases of Brazilian soybeans after meeting the U.S. pledge,” said Meng Zhangyu, an analyst at Wuchan Zhongda Futures Co. “Brazilian supplies are much cheaper.” Over the longer term, the U.S. said China has committed to buying at least 25 million tons of U.S. soybeans annually through 2028, and the nation may come back for more U.S. soybean cargoes later this year.
FOMC meeting on deck; no change in U.S. rates expected… The Federal Reserve’s two-day Open Market Committee (FOMC) meeting begins this morning and ends early Wednesday afternoon with a statement and press conference from Fed Chair Jerome Powell. The FOMC is expected to keep U.S. monetary policy unchanged. However, as always, the FOMC statement and Powell’s remarks at his presser will be parsed by the marketplace for any clues regarding the trajectory of monetary policy in the coming months, including Fed officials’ takes on inflation.
Another U.S. government shutdown looms… U.S. Senate Democrats and Republicans are hurtling toward another federal government shutdown after a Senate Democrat revolt against funding the Department of Homeland Security without new protocols, amid the turmoil in Minneapolis. “A shutdown could have widespread effects, from potential delays at the Internal Revenue Service as tax season starts to delays in producing key government economic data, but would have little practical effect on Immigration and Customs Enforcement and the Border Patrol. Senate Republicans are signaling they’ll resist Democrats’ demands for restraints on ICE and Border Patrol, such as warrant requirements and a body camera mandate, and plan to reject Democratic demands to split off DHS funding from the larger spending package,” said a Bloomberg report.
European Union, India reach free-trade agreement… The European Union and India concluded a free-trade agreement after almost two decades of negotiations, part of an effort to deepen economic ties that has gained momentum amid the Trump administration’s tariff policies. “We have concluded the mother of all deals,” European Commission President Ursula von der Leyen said today in a social-media post and as reported by Bloomberg. She was in New Delhi to mark the moment with European Council President Antonio Costa and added that the accord “created a free trade zone of 2 billion people, with both sides set to benefit.” Indian Prime Minister Narendra Modi hailed the agreement as a means of strengthening India’s manufacturing and services sectors while boosting investor confidence in Asia’s third-largest economy.
Trump threatens more tariffs on South Korea… President Trump threatened to hike tariffs on goods imported from South Korea to 25%, citing the failure of the country’s legislature to codify the current trade deal with the U.S. The new rate would apply to autos, lumber, pharmaceutical products and all other reciprocal tariffs, under which the president set a 15% levy on South Korean exports. South Korea’s legislature is not living up to its end of the deal, said Trump, adding he expects U.S. trading partners to reduce their tariffs in line with the agreed transactions.
Malaysian palm oil futures extend gains… Malaysian palm oil futures extended gains on Tuesday, trading around MYR 4,235 per MT and holding a two-month high. Firmer edible oil prices on the Dalian exchange supported sentiment, alongside improved export estimates. Cargo surveyors noted that Malaysian palm oil exports for January 1–25 rose between 7.97% and 9.97% from the same period in December. Bets of stronger demand ahead of the Lunar New Year and the Ramadan season in February further underpinned prices. Supply concerns also added support, as January output is projected to fall by 15%–17% due to seasonal factors. In India, the world’s largest palm oil buyer, imports may recover in January after plunging 20% to the lowest since April 2025, reflecting softer year-end demand. However, gains were capped by a stronger ringgit, uncertainty from President Trump’s latest tariff moves on South Korea, and caution ahead of a U.S. interest rate decision later this week, which kept investors wary across commodity markets.
Cattle futures supported by COF data, higher cash cattle trade last week… April live cattle on Monday rose $1.075 to $238.00. March feeder cattle gained $2.425 to $362.60. The cattle futures markets got support from last Friday’s monthly USDA Cattle-on-Feed Report that leaned overall price-friendly, and from solidly higher cash cattle prices fetched in trading last week. Serious livestock stress has occurred in the central and southern U.S. Plains, Midwest, Delta, Tennessee River Basin and surrounding areas during the weekend due to extreme cold, snow, freezing rain and strong wind chills, said World Weather. USDA Monday reported average cash cattle trading last week at $234.70, up $2.20 from the week prior average of $232.50.
Lean hog futures see speculator buying amid bullish charts, firmer cash hogs… April lean hog futures on Monday rose 55 cents to $96.725 and hit a contract high. Hog futures today saw more technical buying amid firming cash hog and lean hog index prices. The latest CME lean hog index is up 55 cents at $83.62. Today’s projected cash index price is up another 39 cents at $84.01. The national direct five-day rolling average cash hog price quote Monday was $60.71.