Good morning!
Grain futures prices steady-firmer overnight… As of 6:00 a.m. CST, May corn was unchanged and May soybeans up 3 1/4 cents. May SRW and HRW wheat futures were up 6 1/2 to 7 1/4 cents, with SRW hitting a three-month high and HRW a six-month high. Winter wheat futures have taken over leadership in the grains complex late this week. On tap today for the grains is the USDA Ag Outlook Conference (see item below). The key outside markets today see the U.S. dollar index near steady, with crude oil prices modestly higher and trading around $65.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.1 percent.
Winter weather returns to much of the U.S. … The National Weather Service today reported there will be a very active weather pattern across much of the Lower 48 over the next few days. A dynamic winter storm will spread snow, ice and sleet from the northern/central Plains today to the Great Lakes and the Northeast beginning tonight. A winter storm is bearing down on the Midwest today. An active West coast pattern continues, with additional heavy low-elevation rain across California and additional heavy snow through the Sierra Nevada region. Much-above-average temperature are likely to continue for much of the eastern half of the country, while below-average temperatures slowly spread from the west into the northern/central Great Plains. An elevated to critical fire weather threat will continue across the southern Plains.
Major wildfire in Oklahoma, Kansas… A massive wildfire raging out of control across Oklahoma’s panhandle is being pushed by dry, tropical storm-strength wind gusts and has spread into neighboring Kansas, Bloomberg reported Wednesday afternoon. “The Ranger Road Fire has consumed 145,000 acres and is one of four active wildfires raging in the northwest, according to the Oklahoma Department of Agriculture, Food & Forestry. In total, the fires have consumed about 156,000 acres,” said Bloomberg. Oklahoma Governor Kevin Stitt declared a state of emergency for three counties and some residents have been forced to evacuate.
“The highest fire danger indices (Wednesday) will again be focused in the Oklahoma Panhandle and northwestern Oklahoma,” the state forestry agency said in a statement Wednesday.
While not as bad as Tuesday’s conditions, established blazes may spread quickly through dry grass, brush and ranges. Oklahoma is a hub of U.S. oil flows and is known as the pipeline crossroads of the world. About 25 million barrels of crude is stored in Cushing, in north-central Oklahoma, the largest onshore storage hub in the U.S. and delivery point for benchmark futures.
U.S. bristling with firepower in Middle East; attack on Iran seems likely… “The Trump administration is closer to a major war in the Middle East than most Americans realize. It could begin very soon,” Axios reported Wednesday. CNN reported U.S. military strikes against Iran could occur as soon as this weekend. The Axios report said a U.S. military operation in Iran “would likely be a massive, weeks-long campaign that would look more like full-fledged war than last month’s pinpoint operation in Venezuela.” Axios sources said it would likely be a joint U.S.-Israeli campaign that’s much broader in scope than the Israeli-led 12-day war last June, which the U.S. eventually joined to take out Iran’s underground nuclear facilities. “Such a war would have a dramatic influence on the entire region and major implications for the remaining three years of the Trump presidency…. By bringing so much force to bear, Trump has raised expectations for what an operation will look like if a deal can’t be reached. And right now, a deal does not look likely,” said Axios.
- The U.S. armada in the region has grown to include two aircraft carriers, a dozen warships, hundreds of fighter jets and multiple air defense systems. Some of that firepower is still on its way to the Middle East.
- Crude oil prices rose today, with Brent crude futures climbing above $71 a barrel and U.S. WTI crude futures surpassing $66 a barrel, their highest levels since last August, extending the nearly 5% surge recorded in the previous session, driven by the fears of a U.S.-Iran conflict.
USDA’s annual Ag Outlook Conference kicks off this morning… USDA’s closely watched annual Ag Outlook Conference gets under way in Washington, D.C. this morning with crop supply and demand forecasts. A Bloomberg survey of analyst expects, on average, this year’s U.S. corn plantings at 95 million acres. U.S. soybean plantings are seen at 85 million acres. U.S. wheat planted acres are forecast at 44.7 million. The agency is expected to forecast U.S. cotton planted acres at 9.2 million.
Fed minutes signal inflation concerns remain among policymakers… Wednesday afternoon’s release of the minutes of the January meeting of the Federal Open Market Committee showed policymakers signal renewed worries over inflation with several suggesting the Fed may need to raise interest rates if inflation stays above their goal. Several participants said they would have preferred a post-meeting statement that raised the possibility of raising the Federal funds rate “if inflation remains at above-target levels,” the minutes said. “While the minutes fell far short of suggesting most officials were contemplating the possibility of rate increases, they made clear the Fed is shifting further away from agreeing on another cut. And that could put it on a collision course with the man President Trump has selected to be the next Fed chair,” Kevin Warsh, said a Bloomberg report.
Deere earnings beat market expectations… Deere & Company this morning reported net income of $656 million for the first quarter, or $2.42 per share, $0.40 above market expectations and compares to net income of $869 million, or $3.19 per share, for the quarter ended January 26, 2025. Worldwide net sales and revenues increased 13 percent, to $9,611 million, in the most recent quarter. Net sales were $8,001 million for the quarter, compared with $6,809 million in the same quarter of 2025.
- “While the global large agriculture industry continues to experience challenges, we’re encouraged by the ongoing recovery in demand within both the construction and small agriculture segments,” said John May, chairman and CEO of Deere. “These positive developments reinforce our belief that 2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward.”
Trump signs order protecting U.S. supplies of phosphorus, glyphosate… President Trump on Wednesday signed an order aimed at protecting domestic supplies of elemental phosphorus used by the U.S. military and glyphosate-based herbicides common in U.S. agricultural production, according to a White House official and as reported by Bloomberg. The executive order invokes the Defense Production Act to protect domestic supply chains of both materials. Elemental phosphorus is processed into white phosphorus, which can be used in military munitions or altered further for agricultural uses.
- The order instructs Agriculture Secretary Brooke Rollins to follow up with regulations and other measures to determine the proper allocation of materials necessary to ensure a continued supply of the products, in consultation with the Defense Department.
Latest crops update from Agriculture and Agri-Food Canada… Agriculture and Agri-Food Canada’s (AAFC) January outlook report for the 2025-2026 and 2026-2027 crop years said “market uncertainty in both Canadian and global grain markets remains elevated, primarily due to persistent geopolitical factors that continue to disrupt trade flows and market stability.” For 2025-26, stocks of all principal field crops in Canada are estimated to be 10.2% higher than in 2024 and 15.8% above the previous five-year average. This build-up in stocks reflects record production in 2025, which is estimated to have risen 10% year-over-year and 16% above the five-year average. As a result, carry-out stocks for all major field crops are projected to rise substantially by 65%, supported by record supplies and a 2% decline in export volumes. Prices for most principal field crops are expected to soften on a year-over-year basis, with the exceptions of soybeans and mustard seed, which are forecast to post modest gains. For 2026-27, Canadian crop exports are expected to ease slightly, while carry-out stocks are projected to fall significantly, said the report.
Malaysian palm oil futures rally… Malaysian palm oil futures jumped around 2% to around MYR 4,100 per MT Thursday, bouncing back from the prior session’s weakness as trading resumed after the two-day Lunar New Year break. Support came from a weaker ringgit and firmer soyoil prices on the Chicago market, while China’s Dalian exchange remained closed for the Spring Festival. Buying was also driven by bargain hunting after prices fell to a four-week low ahead of the holiday. On the demand side, India, the top importer, raised palm oil purchases by 51% mom in January to a four-month high, recovering from December’s sharp decline. Meanwhile, industry data showed inventories dropped 7.7%, and production slid 13.8% in January, lending further support. However, gains were capped by weaker export prospects. Cargo surveyors estimated shipments for February 1–15 fell between 11.2% and 14.9%, highlighting near-term demand concerns during Ramadan and the upcoming Eid-ul-Fitr celebration.
Cattle futures markets pause Wednesday… April live cattle on Wednesday fell 27 1/2 cents to $242.525. March feeders lost 40 cents to $370.575. The cattle futures markets paused at mid-week, following gains on Tuesday that pushed the markets to four-month highs. Sharply higher cash cattle trading last week limited selling interest. USDA Monday reported cash cattle trading last week averaged $245.62, up $4.31 from the week prior. Cattle traders are awaiting Friday afternoon’s monthly USDA cattle-on-feed report.
Lean hog futures market also see mid-week pause… April lean hog futures on Wednesday rose 25 cents to $92.55. Hog futures saw a pause following the recent steep sell off that has produced serious chart damage. Bulls are still shaky. More price strength in lean hog futures is needed this week to at least stabilize the market. The latest CME lean hog index is up 7 cents at $87.13. Today’s projected cash index price is up 5 cents at $87.19. The national direct five-day rolling average cash hog price quote Wednesday was $62.50.