Good morning!
Grain futures mixed overnight; USDA data on deck… As of 6:00 a.m. CST, December corn was down 1/2 cent and January soybeans were 4 3/4 cents higher and hit a 16-month high. December HRW and SRW wheat futures markets were 3 1/4 cents 4 1/2 cents lower. Trading in the grains may be more subdued today, ahead of Friday’s monthly USDA supply and demand report--the first major economic data from the agency in over a month. The key outside markets early this morning see the U.S. dollar index weaker. Nymex crude oil prices are slightly up and trading around $59.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.079 percent.
Temps well above average in the Midwest/Plains… The National Weather Service today reports the West and Central U.S. will see well above-average temperatures through Saturday. Highs in the 60s could break high-temperature records in the Northern Rockies today. Low temperatures in the 40s in the Northern High Plains tonight will be 20-30 degrees above average and may tie or break existing records. As the upper trough pushes closer to the West Coast, southerly flow beneath the Central U.S. ridge will increase leading to well-above-average temperatures across the Great Plains on Friday. Several maximum and minimum temperature records may be tied or broken due to temps being between 20-30 degrees above average. Meantime, the Lower Great Lakes and interior Northeast will see lake-effect snow over the next few days. The upper-low approaching the West Coast will amplify today as it spreads heavy precipitation and strong winds across California. Heavy rain is expected to proliferate throughout much of the California coastline and into the Sierra Nevada today.
U.S. government shutdown ends… President Trump overnight signed legislation to end the longest U.S. government shutdown in history, marking the conclusion of the 43-day closure. Trump’s signature means the government can begin to resume normal operations, with federal workers expected back on the job starting today. However, it could still take days or even weeks for federal workers to fully restart their operations and dig out of the backlog after being off their jobs since Oct. 1. U.S. Transportation Secretary Sean Duffy told reporters Wednesday he anticipated it could take as long as a week to start lifting flight restrictions at major airports. USDA food aid won’t immediately snap back as states say they need as long as a week to update their beneficiary files and load debit cards, reported Bloomberg. The shutdown fight has weighed on the U.S. economy, with the Congressional Budget Office projecting a six-week government closure would lower real gross domestic product growth in the current quarter by 1.5 percentage points. The interim spending package funds most of the government through Jan 30, raising the prospect of another shutdown fight at that time.
Indonesia rolling out “B50” biofuel program… Indonesia will start road safety tests for its planned B50 biofuel program early next month, according to a Bloomberg report. However, there are concerns over tighter palm oil supplies. “The world’s biggest producer of palm oil is planning to expand its biodiesel mandate from 40% to 50% by the second half of next year to slash a hefty fuel import bill and greenhouse gas emissions. The palm industry is closely watching Indonesia’s timing of the rollout, as the program is expected to soak up supplies available for export and lead to a global palm oil squeeze and higher prices,” said Bloomberg. The Indonesian government is considering partial B50 implementation, only for the public sector, due to potential supply issues. The ideal blend for non-public sector use will be studied in the meantime. To ensure steady supplies, Indonesia would need to expand its palm plantations, said Baginda Siagian, a palm oil official at the agriculture ministry. The country currently has a moratorium in place for opening up forests for new plantations — a move that was essential to slowing rampant deforestation and welcomed by environmentalists. “Agriculture ministry plans for expanding new palm oil plantations by 600,000 hectares, including 400,000 hectares for smallholders and the rest for state-owned companies, to fulfill rising domestic demand,” he said on the sidelines of the conference, without elaborating further, said Bloomberg.
More evidence of a global crude oil glut… Global crude oil markets are oversupplied, and it’s most obvious in the Americas, especially the U.S., Bloomberg reports. The futures curve for U.S. benchmark West Texas Intermediate is in a contango structure — in which later-dated contracts trade at a premium to nearer ones — for most of 2026, suggesting weaker demand for prompt barrels. Further signs of healthy supply in the U.S. can be seen in high export volumes. U.S. crude exports for October came in at the highest since July 2024, according to government data. The equivalent curve for global crude oil marker Brent, meanwhile, is largely flat in the months after March. The difference between the two reflects the varying degrees of oversupply that regional crude markets are experiencing. The flat curve suggests demand for prompt Brent barrels is also lackluster. Globally, oil market watchers are broadly expecting a glut next year. OPEC, which has long held the view that oil demand would remain healthy, flipped estimates in the third quarter from a deficit to a surplus on higher U.S. production. The International Energy Agency, meanwhile, has said there would be a record surplus in 2026. The world is set to be in a “slight surplus through this quarter and going into next quarter,” said Vandana Hari, founder of Singapore-based analysis firm Vanda Insights, on Bloomberg Television. This is bad news for the oil industry but good news for U.S. consumers visiting the gasoline and diesel pumps.
Silver futures prices hit a record high… Comex silver futures prices hit a record high of $54.415 an ounce overnight and bringing this week’s gains to around 12%. Traders and investors are looking to hedge against global uncertainties by buying safe-haven precious metals. Expectations for more Federal Reserve interest rate cuts, following signs of a weakening U.S. labor market, have supported the precious metals. Supply concerns have also contributed to silver’s rally, with India’s wedding season under way and fears of potential U.S. tariffs on silver. Last week the U.S. Department of Interior added silver, copper, and metallurgical coal to its “critical minerals” list, highlighting their importance to the U.S. economy and national security, reported TradingEconomics.com.
Malaysian palm oil futures trade near unchanged… Malaysian palm oil futures were little changed Thursday, holding around MYR 4,120 per MT after modest losses in the previous session. Sentiment improved after President Trump signed legislation ending the longest government shutdown in U.S. history. On the Dalian exchange, the most-active soyoil contract edged higher while palm oil futures slipped. Regarding production, analysts expect November output to remain elevated, supported by peak production in East Malaysia. Meantime, end-of-month inventories are projected to stay flat or rise slightly after hitting a 6-1/2-year high in October. So far this week, prices have edged higher, rebounding from three sessions of losses, amid expectations that top producer Indonesia may raise its biodiesel mandate to 50% from 40% by H2 2026. In the longer term, Jakarta also plans to implement mandatory ethanol blending in fuel by 2028 to reduce reliance on imported petroleum.
Technical sellers re-emerge in cattle futures markets… The live and feeder cattle futures markets Wednesday fell victim to some fresh technical selling from the speculators and weaker cash cattle trade so far this week in a very light test. Still, early week price strength begins to suggest near-term market bottoms are in place for cattle futures. However, the live and feeder cattle futures markets need to close out this week with prices nearer their weekly highs to better suggest near-term market bottoms are in place. Cash cattle trading this week has been very light so far, with USDA at midday Wednesday reporting the average steer price at $227.11 and the average heifer price at $227.32. USDA Monday reported cash cattle trading activity last week occurred at an average of $228.70. That’s down $2.16 from the week prior’s USDA average cash cattle trade of $230.86.
More chart-based selling in lean hog futures, too… Lean hog futures Wednesday saw a resumption of chart-based selling. A continued erosion in cash hog prices also emboldened the speculator bears in lean hog futures at mid-week. Lower live and feeder cattle futures prices Wednesday also spilled over into some selling in hog futures. The latest CME lean hog index is down another 24 cents at $89.17. Today’s projected cash hog index is down 4 cents at $89.13. Wednesday’s national direct 5-day rolling average cash hog price quote is $83.76.