Good morning!
Grain futures mixed overnight… As of 6:00 a.m. CST, March corn futures were down 3/4 cent. January soybeans were up 1 1/2 cents. March SRW and HRW wheat futures were down 1 1/2 to 2 3/4 cents, with both hitting seven-week lows. Somewhat improved prospects for a Russia-Ukraine peace deal have the winter wheat futures markets under pressure this week, on ideas a peace accord would likely mean more grains being shipped out of the Black Sea region. Corn and soybean futures markets hit multi-week lows on Monday as the speculators are starting to lean heavier on the short sides of those markets. Key outside market for the grains sees crude oil lower today and hit a nearly eight-month low of $55.69 a barrel, on the prospect of a peace deal meaning presently sanctioned Russian oil would come to an already glutted world oil market. The U.S. dollar index is weaker early today and near a two-month low. The yield on the benchmark 10-year U.S. Treasury note is presently 4.16 percent.
Warmer temps in western, central U.S. for next several days… The National Weather Service today said broad upper-level ridging over the western and central U.S., will contribute to above-average temperatures this week. Widespread temperature records may be tied or broken in the West during this time. The arctic airmass that gripped the eastern U.S. for the past couple of days will begin to moderate as temperatures rise beneath upper ridging over the region. Elsewhere, showers and thunderstorms are likely over portions of the south Texas coast beginning tonight and continuing through Wednesday afternoon. Meantime, heavy rain, heavy mountain snow and high winds will occur in the Northwest over the next several days. Rain and mountain snow will spread into the northern Rockies, where 1-2 feet (isolated higher amounts possible) may accumulate on Wednesday. Wind, winter, and flooding related watches and warnings are in effect for much of the Northwest for the next couple of days at least, said the NWS.
Big U.S. economic data dump today… A combined October-November U.S. jobs report today is shaping up to be the main U.S. data event for markets in the last full trading week of 2025. A print that reinforces the picture of a sluggish U.S. economy could put the stock market rally back on track by supporting bets for further Fed interest rate cuts, while a big miss to the upside on non-farm payrolls may spook markets. Today’s jobs report will also include an estimate of October payrolls — figures that were delayed by the U.S. government shutdown. Analysts project a 45,000 increase in November payrolls and a 4.5% unemployment rate. Also out today is the November new residential construction report, retail sales for October, the December flash U.S. services and manufacturing purchasing managers indexes, and September manufacturing and trade inventories. The U.S. consumer price index report for November is scheduled for Thursday.
Ukraine says U.S. would codify its security if peace deal reached… Ukrainian President Volodymyr Zelenskiy said he has an agreement with the U.S. to make security guarantees legally binding through a vote in Congress as part of a deal to end Russia’s war, Bloomberg reported. Russian Deputy Foreign Minister Sergei Ryabkov said he’s “very much confident” the war is nearing an end but insisted Moscow’s territorial demands remain unchanged. European leaders pledged to send a multinational force to Ukraine to help rebuild its military and protect its airspace and seas after a peace deal has been agreed and offered “a legally binding commitment” to take measures to restore Ukraine’s security. Zelenskiy offered no details in online audio comments to Ukrainian media late Monday. The disclosure came hours after a U.S. official said the Trump administration had offered strong “Article 5-like” security guarantees to Ukraine in the latest negotiations, a reference to NATO’s mutual-defense clause. Attention is now likely to switch to Russian President Vladimir Putin’s response, after two days of talks in Berlin involving Ukrainian, U.S. and European officials ended with upbeat assessments of the potential for a settlement.
Crude oil prices slump amid Ukraine-Russia peace talks progress… Nymex crude oil futures fell to a near-eight-month low today and Brent crude oil futures fell 1% to below $60 per barrel, the lowest since early 2021, amid renewed optimism over a Russia-Ukraine peace deal and persistent concerns about oversupply. Any deal could pave the way for the lifting of U.S. sanctions on Russian oil, potentially flooding the market with more barrels. The market is widely expected to be oversupplied this year and next as OPEC+ producers restored idled output, while non-OPEC producers, particularly in the Americas, also boost production. Adding to the bearish sentiment, weak Chinese economic data out on Monday raised concerns about slowing energy demand from the world’s largest crude importer. These factors offset worries over potential supply disruptions stemming from rising U.S.-Venezuela tensions. TradingEconomics.com
China sets final tariffs lower on EU pork imports… China set final import tariffs on European Union pork at significantly lower levels than initially announced in September, said Bloomberg in a report. Beijing will impose anti-dumping levies ranging from 4.9% to 19.8% on meat from one of the world’s biggest supply regions, China’s Ministry of Commerce said Tuesday in a statement on its website. Preliminary duties set in September had been as high as 62.4%. The tariffs, which take effect Wednesday and will remain in place for five years, were finalized after Beijing determined that the EU had been dumping certain pork and pig by-products, and that substantial harm had been caused to China’s domestic industry, according to the statement. China has been struggling with oversupply of pork and sluggish consumption due to a sustained economic downturn. Even at lower levels, the levies are another blow to beleaguered European hog farmers, who are contending with slowing demand and fallout from disease outbreaks.
Argentina to loosen its currency trading restrictions… Argentina will loosen restrictions on its peso currency trading and start to rebuild foreign reserves, taking advantage of growing investor confidence in President Javier Milei’s government, Bloomberg reported. Argentina’s central bank will expand the peso’s trading bands at the same rate as monthly inflation and aim to buy $10 billion in reserves next year in a base case scenario. Argentina’s currency policy of trading bands remains the “best regime” for the economy and the new changes are still aligned with a path of lower inflation, according to Central Bank President Santiago Bausili. The new measures heed investor calls for a more flexible foreign exchange policy as analysts had warned about an overvalued currency for much of Milei’s first two years in office. They’re also the most significant policy changes since Argentina finalized its $20 billion agreement with the International Monetary Fund in April.
Malaysian palm oil futures slide, near three-week low… Malaysian palm oil futures slipped for a third consecutive session, hovering near MYR 3,980 per MT, a nearly three-week low, pressured by a stronger ringgit and weakness in rival edible oils on the Dalian and Chicago markets. Sentiment was further weighed down by signs of softer exports, as cargo surveyors estimated shipments of Malaysian palm oil products for December 1–15 fell between 15.9% and 16.4% from a month earlier. On the supply side, end-November inventories climbed 13% to 2.84 million MT, the highest level in 6-1/2 years, reflecting robust full-year output that is on track to surpass 20 million MT for the first time. These bearish factors were partly offset by demand signals from top buyer India, where palm oil imports in November rose around 5% from October to 632,341 metric MT, as refiners capitalized on lower prices. Adding some support, industry regulator data released last week showed November crude palm oil production fell 5.3% mom to 1.94 million MT.
Cattle futures bulls remain firmly in the driver’s seat… February live cattle on Monday rose $1.00 to $230.55. January feeder cattle gained 82 1/2 cents to $330.925. The cattle futures markets saw some modest technical buying to start the trading week, after recent solid gains. Prices are still trending higher on the daily bar charts, which should continue to attract the technically oriented speculators to the buy side. Solidly higher cash cattle trade last week at much better money is also supportive for the cattle futures markets. USDA reported the average cash cattle trading price last week was $228.19, up $6.98 from the week prior.
Lean hog futures see some routine profit taking… February lean hogs on Monday fell 67 1/2 cents to $83.85 but closed nearer the daily high. Hog futures saw some routine profit-taking pressure from shorter-term speculators, after prices last Friday hit a six-week high. Still, the near-term chart posture for the market remains bullish. Recent gains in the cash market and the CME hog index also suggest seasonal bottoms are in place for cash and futures markets. February lean hogs have pushed above the CME lean hog index, also a positive sign. The latest CME lean hog index is up 23 cents to $82.80. Today’s projected cash index price is up another 19 cents at $82.99. Monday’s national direct 5-day rolling average cash hog price quote is $71.84.