Good morning! Pro Farmer wishes all of you, our valued readers, a Merry Christmas!
Please be advised of the following holiday schedule:
- Markets: Grain futures close early at 12:05 p.m. CT, livestock futures at 12:15 p.m.; markets closed Thursday.
- Reports: On Wednesday and Friday, we will observe an abbreviated schedule, publishing First Thing Today (8:00 a.m. CT) and After the Bell (after the close). We will resume our regular publishing schedule on Monday, Dec. 29.
Grain futures higher overnight… As of 8:00 a.m. CST, March corn futures were up 1 3/4 cents and hit a three-week high. January soybeans were up 5 1/2 cents. March SRW and HRW wheat futures were up 5 to 5 1/2 cents. Look for quieter trading action in the grain futures today, as most markets, including the grains, will close early for the Christmas holiday. Wheat has taken over daily price action leadership in the grain futures markets. (See item below.)
The key outside markets today see the U.S. dollar index near steady. Nymex crude oil futures prices are near steady today and trading around $58.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.15 percent.
Grain traders focusing on wheat futures markets… SRW wheat futures are headed for a fifth straight up day today, the longest rally since April, as Black Sea supply risks and weather uncertainties support prices. Russian forces launched a missile and drone attack across Ukraine on Tuesday, killing civilians and damaging energy and port facilities in the Odesa region on the Black Sea, according to Ukrainian officials and as reported by Bloomberg. That adds to a recent streak of attacks that have damaged infrastructure in both countries. The two countries are major exporters of grains and edible oils and the strikes threaten to disrupt supplies from the region. Dryness is also building in U.S. HRW wheat-growing regions, adding to support for prices. “Dry weather accompanies record-setting warmth across the central and southern Plains,” the USDA said in a Tuesday report. World Weather Inc. reports that potential record high temps in the southern Plains states in the coming days could damage the hardiness of the winter wheat crops there.
Trump expects Fed to lower rates if U.S. economy faring well… President Trump on Tuesday said he expects his Federal Reserve to lower interest rates if the U.S. economy is doing well, the latest signal the president is eager for a Fed chair nominee committed to borrowing cost cuts as he nears an announcement of his choice to replace current Chairman Jerome Powell. “I want my new Fed Chairman to lower Interest rates if the market is doing well, not destroy the market for no reason whatsoever,” Trump said in a social media post Tuesday. “Anybody that disagrees with me will never be the Fed Chairman!” Trump has repeatedly said he’s interested in breaking recent trends, where promising economic data is sometimes met by a market selloff due to concerns over inflation and corresponding hikes by the Fed. “In the old days, when there was good news, the market went up,” Trump wrote. “Nowadays, when there is good news, the market goes down, because everybody thinks that interest rates will be immediately lifted to take care of ‘potential’ Inflation.”
Peace talks stall as Ukraine disputes U.S.-proposed land division issue… Ukraine and the U.S. remain split primarily on territorial issues in talks on a peace plan to end Russia’s war, according to President Volodymyr Zelenskiy and as reported by Bloomberg. Ukraine rejects Russia’s demand to give up land in eastern Donetsk, fearing it would leave the country vulnerable to a new Russian attack. U.S. envoys will hand over the draft of the 20-point peace plan to their Russian counterparts, with Ukraine aiming to persuade the U.S. to propose that Russia halt the war along the current contact line.
China supports cautious monetary policy stimulus… China’s central bank reaffirmed its supportive monetary policy stance while signaling continued caution toward aggressive stimulus, reinforcing a shift toward securing long-term stability over immediate fixes, said a report from Bloomberg. The People’s Bank of China reiterated it will guide borrowing costs to continue hovering at a low level, according to a Wednesday statement following its fourth-quarter monetary policy committee meeting. The bank repeated a pledge to step up “cross-cyclical” policies, a phrase suggesting it aims to look beyond short-term volatility and avoid excessive stimulus that could create structural imbalances. This measured approach comes despite deepening weakness in domestic demand, with retail sales last month expanding at their lowest pace since the crash caused by Covid. Fixed-asset investment is also on track for its first annual decline in data going back to 1998, after a crash made worse by a drought in funding for infrastructure. The committee said it will “grasp the strength, pace and timing” of policy implementation based on evolving domestic and overseas conditions. The PBOC also reiterated its commitment to maintaining the yuan’s basic stability at a reasonable and balanced level to guard against overshooting risks. The PBOC has adopted a cautious approach this year, frequently disappointing economists who had anticipated more aggressive interest rate cuts. This restraint reflects the central bank’s deeper concerns over protecting shrinking bank margins and preserving policy space for future downturns, said Bloomberg.
U.S. home mortgage interest rates dropping… The average contract interest rate on 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) in the U.S. decreased to 6.31% in the week ended December 19th, the lowest in seven weeks, compared to 6.38% in the previous period, according to the Mortgage Bankers Association. Still, mortgage applications fell 5%, extending a 3.8% drop in the previous period, with the index hitting the lowest in over three months. Applications to purchase a home fell 3.7% and those to refinance a home loan sank 5.6%. TradingEconomics.com
USDA quarterly hogs and pigs report leans bearish… USDA Tuesday afternoon reported the U.S. inventory of all hogs and pigs on December 1 was 75.5 million head--up 1 percent from December 1, 2024, and up slightly from September 1, 2025. Breeding inventory, at 5.95 million head, was down 1 percent from last year, but up slightly from the previous quarter. Market hog inventory, at 69.6 million head, was up 1 percent from last year, and up slightly from last quarter. The September-November 2025 pig crop, at 35.0 million head, was up slightly from 2024. Sows farrowing during this period totaled 2.93 million head, up slightly from 2024. The sows farrowed during this quarter represented 49 percent of the breeding herd. The average pigs saved per litter was 11.93 for the September-November period, compared to 11.92 last year. Hog producers intend to have 2.89 million sows farrow during the December 2025-February 2026 quarter, up 2 percent from the actual farrowings during the same period one year earlier, but down 1 percent from the same period two years earlier. Intended farrowings for March-May 2026, at 2.91 million sows, are up 2 percent from the same period one year earlier, but down slightly from the same period two years earlier. The total number of hogs under contract owned by operations with over 5,000 head, but raised by contractees, accounted for 52 percent of the total United States hog inventory, up 2 percent from the previous year. “This is the smallest U.S. Dec 1. breeding herd since 2014,” economist Lee Schulz said during a webinar hosted by the National Pork Board and as reported by Farm Journal’s Pork Daily. “Farrowing intentions are also above year-ago levels at 2.89 million sows for the December 2025 through February 2026 quarter. The outlook is favorable so the incentive is there to farrow more sows, but there is a limit given the size of the breeding herd.” The breeding inventory was in line with pre-report expectations, Schulz said. However, some believed the breeding herd could have seen some modest expansion and been larger than a year ago.
Malaysian palm oil futures trade near steady… Malaysian palm oil futures were little changed on Wednesday, hovering near MYR 4,030 per MT after gains in the prior two sessions, as trading thinned ahead of Thursday’s Christmas holiday. A firmer ringgit capped upside, though stronger rival edible oils in Dalian and Chicago lent support. Meanwhile, export data sent mixed signals: cargo surveyor Intertek Testing Services estimated that Malaysian palm oil product exports rose 2.4% month-on-month in the December 1–20 period, while AmSpec Agri Malaysia reported a 0.87% decline over the same timeframe. Elsewhere, Indonesia, the world’s top producer, allocated 15.65 million kilolitres of palm-based biodiesel for its 2026 blending mandate, according to an official from the Energy and Mineral Resources Ministry, underscoring steady policy-driven demand. Meanwhile, in India, the world’s largest consumer, palm oil imports increased by about 5% in November from October, supported by more attractive prices.
Profit taking in cattle futures markets… February live cattle on Tuesday fell $1.80 to $229.625. January feeder cattle lost $2.875 to $343.625. The cattle futures saw profit-taking pressure from the shorter-term traders after prices in both markets hit two-month highs Monday. USDA at midday Tuesday reported very light cash cattle trading so far this week, at $229.00. USDA Monday reported cash cattle trading last week averaged$227.97, which is down 22 cents from the prior week’s average. Technical analysis: The live and feeder cattle futures bulls still have the overall near-term technical advantage. Price uptrends are in place on the daily bar charts.
Lean hog futures push to two-month high… February lean hog futures on Tuesday rose 60 cents to $85.95, nearer the session high and hit a two-month high. Hog futures saw more technical buying from the speculative traders. Bulls have momentum on their side, to suggest more upside. Recently rising cash hog prices and a bullish near-term chart posture for the futures market will continue to support buying interest in lean hog futures. The February futures contract is above the latest CME lean hog index, which is also bullish for futures. The latest CME lean hog index is down 2 cents to $83.71. Today’s projected cash index price is up 1 cent at $83.72. Tuesday’s national direct 5-day rolling average cash hog price quote is $69.41.