Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn futures were down 2 cents, January soybeans up 3 1/4 cents and March SRW and HRW wheat futures near steady. Corn is seeing a mild corrective pullback following Tuesday’s gains, while soybeans are seeing a modest bounce following Tuesday’s slight losses. The winter wheat futures markets are pausing at mid-week, amid their present price downtrends on the daily charts. The key outside markets early this morning see the U.S. dollar index lower and hitting a three-week low. Nymex crude oil prices are higher and trading around $59.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.08 percent.
Winter arrives early for much of United States… The National Weather Service today said an active winter-like pattern will continue to bring the threat of cold and snowy weather to multiple areas of the country through the end of the week and into the weekend. Moderate to heavy snow will come to both the mountains and adjacent High Plains today. Snow should begin to taper off later this evening and into early Thursday morning. Some wintry precipitation may also spread into portions of the southern High Plains overnight as the system moves into the Plains. Meanwhile, a clipper-like system will pass through the Great Lakes today, leading to lake-enhanced snowfall for favorable downwind locations of the lakes. Some light snow showers will be possible along the trailing cold front southwest through the Midwest into the Middle Mississippi Valley, as well as into the interior Northeast. Some wintry precipitation will be possible where colder air is in place across portions of the Upper Ohio Valley and the southern Appalachians/Mid-Atlantic into early Friday morning, though this remains more uncertain at this time. Much of the central and eastern U.S. will remain below average and chilly to end the week in this winter-like pattern. The next cold front will bring another round of frigid temperatures to the Plains and Midwest, with highs in the single digits and teens for the northern Plains Wednesday, and highs in the 20s and 30s spreading east into the Midwest and south into the southern Plains Thursday. Morning lows Thursday will be particularly brutal in the Midwest, bottoming out into the teens below zero, which may tie/break some daily records.
U.S. soybeans set to be shipped to China… Several U.S. soybean cargoes are being prepared for China, according to a ship lineup seen by Bloomberg, after a trade pact agreed upon by the two nations several weeks ago. “The lineup shows six ships expected to be loaded at Gulf Port terminals in the next several weeks, carrying a total of at least 320,000 tons of soybeans to China. Activity is ramping up after purchases have been booked following a meeting in late October between U.S. President Donald Trump and his Chinese counterpart Xi Jinping,” said Bloomberg. The U.S. said China has pledged to buy 12 million tons of U.S. soybeans by year end. China had been avoiding U.S. purchases as it sought to gain leverage in trade talks with the Trump administration, instead favoring South American supplies. “Still, current quantities are far short of what’s been promised, with data from the U.S. Department of Agriculture showing China securing only 2.25 million tons since Oct. 30,” said the Bloomberg report.
U.S.-Russia peace talks constructive but much work remains: Russian official… Talks between Russian President Vladimir Putin and President Trump’s special envoy Steve Witkoff and son-in-law Jared Kushner on ending the fighting in Ukraine ended after nearly five hours on Tuesday, reports the Associated Press. Putin’s senior adviser Yuri Ushakov called the talks, hosted in Moscow, constructive but added that much work remains, as the Trump administration renews its push to broker a peace deal. Both sides agreed not to disclose the substance of the talks. Ukrainian President Volodymyr Zelenskyy, who said he expects to be briefed on the meeting by the U.S. delegation, is visiting Ireland in his travels to European allies.
More weak China economic data… China’s services activity expanded at the weakest pace in five months, a private survey showed, adding more evidence of sluggish consumer demand that’s putting more pressure on a slowing economy. The RatingDog China services purchasing managers’ index slowed for a third month and fell to 52.1 in November, according to a statement published on Wednesday, matching the median forecast of economists surveyed by Bloomberg. Any reading above 50 indicates an expansion. “The softer services PMI this morning reinforced the picture of a patchy recovery,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore and as reported by Bloomberg. “Investors now want clearer signs of follow-through — either concrete policy delivery, improving consumption data or more decisive credit support.”
Important U.S. economic data releases today…U.S. stock and financial markets were quieter overnight, ahead of the monthly ADP jobs report that is expected to show a deterioration in private-sector employment growth. The data has taken on added importance with official government releases still delayed. A separate report is likely to show slower growth in November services activity. “Instead of non-farm payrolls, people are going to look at ADP. Instead of the inflation numbers, they’re going to look at things like the ISM service print,” said Justin Onuekwusi, chief investment officer at St. James’s Place and as reported by Bloomberg. “Without that clear runway of data, sentiment is always going to be precarious,” he said.
U.S. Treasury market steadies… The yield on the benchmark 10-year U.S. Treasury note held around 4.08% overnight, pausing a recent rise as investors weigh the outlook for Federal Reserve policy. Markets are currently pricing in an 89% chance of a 0.25% rate cut next week at the Fed’s FOMC meeting, with about 0.9% of total Fed easing priced in for 2026. Expectations that White House economic adviser Kevin Hassett will likely be nominated as the next Fed chair have added to the dovish marketplace sentiment. Hassett is known for supporting faster rate reductions in line with President Trump’s stance.
Malaysian palm oil futures prices rise… Malaysian palm oil futures rose for a second session on Wednesday, hovering above MYR 4,150 per MT, supported by firmer edible oils on the Chicago and Dalian exchanges. Anticipation of stronger demand ahead of Lunar New Year and Ramadan in early 2026 also lent more support. In India, the top buyer, November imports edged higher as softer prices prompted refiners to shift from costlier soyoil and sunflower oil. Gains were capped, however, by a Reuters forecast showing inventories likely rose to a 6-1/2-year high in November, highlighting ample supply. Export weakness added pressure, with Intertek noting a 19.7% month-on-month drop in shipments. Focus also turned to operational risks after a land dispute in Terengganu state, which authorities warned could threaten output, but traders saw limited near-term impact. Meantime, in Indonesia, the world’s largest producer, industry officials said floods and cyclones in Sumatra caused no major output losses, tempering supply-driven support expectations.
Near-term price bottoms likely in place for cattle futures markets… February live cattle on Tuesday rose $4.875 to $220.80. January feeder cattle gained $8.80 to $329.875 and hit a three-week high. The cattle futures markets bulls needed to show power early this week and did just that Tuesday. Recent price action suggests both markets have put in near-term bottoms. But bulls have heavy lifting to do in the near term if they want to establish fresh price uptrends. Reports of very light cash cattle taking place so far this week, with steers and heifers averaging $215.00, encouraged buying interest in futures today. USDA Monday reported last week’s average cash cattle trading price was $211.53, which is down $5.88 from the week prior.
Cash hog market may be stabilizing… February lean hog futures on Tuesday fell 12 1/2 cents to $80.175. The market saw some mild technical selling pressure as the overall chart posture remains bearish. Solid gains in the cattle futures markets limited selling interest in lean hog futures. Steadily falling cash hog prices will continue to constrain lean hog futures bulls until the cash hog market stabilizes and starts to turn back up. Daily losses in the cash and CME lean hog index have begun to get smaller, which may indicate the cash hog market is bottoming out. The latest CME lean hog index is down another 25 cents to $81.67. Wednesday’s projected cash index price is down another 6 cents at $81.61. Tuesday’s national direct 5-day rolling average cash hog price quote was $70.06.