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A trio of flash sales and solid weekly export transactions for corn and soybeans provided support on Friday. The question is whether a strengthening U.S. dollar will soon provide a significant headwind.
The dollar rallied versus major rivals this week, with a closely watched index of its value trading at its highest since April 2026. A hotter-than-expected October consumer price index reading on Tuesday accelerated gains, cementing expectations for a quarter-point rate hike by the Federal Reserve in December and encouraging bets for a consecutive hike in January. The October producer price index released Friday showed wholesale prices rose at a slower pace than the previous month but did little to alleviate worries of building inflation pressures. Treasury yields rose sharply across the curve, particularly at the more policy-sensitive short end, with the rate on the 2-year Treasury note jumping nearly 30 basis points, or 0.3 percentage point, this week to end Friday at 4.86%. The dollar takes much of its cue from moves in short-dated rates, particularly relative to moves on yields of short-dated bonds in rival countries.
- “It is hard to see what is going to change this hawkish Fed/dollar-positive mindset in the next few weeks,” said Chris Turner, FX strategist at ING. “The Fed centrists might try to emphasize the need for a gradual adjustment in policy, but it is probably only a big U.S. tech sell-off that can put a dent in short-dated U.S. yields now.”
Weekly recap: Grain and soybean futures entered the week heavily oversold on the charts. Soybeans bounced sharply after USDA on Tuesday unexpectedly cut its 2026-27 ending stocks estimate despite bumping the national average yield to a record. Corn futures popped higher after USDA made a larger-than-expected cut to yield but have traded below Tuesday’s reaction high, while wheat futures bounced off multi-month lows late in the week as Russia-Ukraine peace talks produced no breakthroughs on grain shipments out of the Black Sea. Cattle futures rebounded this week as Tyson announced plans to restart a second shift at its Amarillo beef plant. Lean hog futures attempted to stabilize after hitting contract lows last week on dismal cash and wholesale fundamentals.
- December corn rose 3 cents to close at $4.45 ½, for a weekly gain of 4 cents.
- January soybeans gained 12 ½ cents to finish at $12.31 ½, hitting a two-week high and rising 37 ¾ cents on the week. December soybean meal finished $4.40 higher at $329.80 and December bean oil advanced 35 points to 63.77 cents.
- December soft red winter wheat rose 9 cents to close at $5.93 ¼, eking out a weekly gain of 2 cents. December hard red winter wheat gained 6 ½ cents to finish at $6.28 ¾, down 3 ¾ cents for the week. December spring wheat rose 4 cents to $6.26 ¾ – a weekly gain of 10 ¾ cents.
- December cotton ended 11 points higher at 78.78 cents, trimming its weekly loss to 33 points.
- December live cattle rose $1.75 to close at $220.65, bringing the weekly gain to $6.60. January feeders rose another $3.675 to end at $335.35, for a weekly gain of $16.975.
- December lean hog futures saw modest short covering for a rise of $0.30 to $55.45, leaving a weekly gain of $1.925 after a recent run of contract lows that saw the nearby at the lowest price since 2020.
U.S.-China Board of Trade meets… The U.S. and China on Friday held the first meeting of their bilateral Board of Trade, just days ahead of President Donald Trump’s expected meeting next week in Shenzhen with Chinese leader Xi Jinping at the Asia-Pacific Economic Cooperation Summit. “The Trump administration looks forward to continuing our engagement with China as we work to establish fair and balanced trade between the two largest economies in the world,” the Office of the U.S. Trade Representative said on X. The board was set up in September as both countries drew up lists of non-sensitive goods that could be eligible for tariff cuts. China has said that implementation of tariff cuts as part of that “$30 billion-for-$30 billion” list is a prerequisite for additional agricultural purchases. Meanwhile, U.S.-China trade relations have shown strains amid the political and diplomatic fallout from former Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy (see item below).
Commerce’s Lutnick under fire… News reports say that senior Trump administration officials have put the blame for the political and national-security fallout surrounding former Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy on Commerce Secretary Howard Lutnick, a key player in trade and tariff policy. The Wall Street Journal reported that some political allies of the president have told Trump and his senior advisers that Lutnick had given cover to Nvidia and Huang through what they view as a lack of action on export controls. On Friday, Treasury Secretary Scott Bessent told CNBC that his department and others have long supported imposing restrictions on Megaspeed, the company formerly helmed by the alleged spy, but that the Commerce Department was in charge. The departments of Treasury, Defense and State and the Office of the U.S. Trade Representative all “were in favor of putting Megaspeed on the entity list for months,” Bessent said. The Journal noted that Trump himself opposed tight export restrictions, largely echoing Huang’s argument that it was more important to keep Chinese firms hooked on U.S.-made chips.
October crush expected to rise… Members of the National Oilseed Processors Association on Monday are expected to show the soybean crush in October rose from a 13-month low the previous month as harvest moved into the home stretch and provided fresh supplies, according to a Reuters survey of analysts. NOPA members, who represent nearly all U.S. soybean processing capacity, were estimated to have crushed 225.428 million bushels last month. If realized, that would be a 14.8% rise from the 196.300 million bushels processed in September but down 1.0% from the record-large October 2025 crush of 227.647 million bushels. Soyoil stocks held by NOPA members as of October 31 were projected to rise to 1.079 billion pounds, based on estimates from six analysts.
Russia ramps up attacks on food facilities… Russia is stepping up attacks on Ukraine’s crop-processing facilities, Bloomberg reported, putting a further strain on an industry vital to the war-battered economy and global food supplies. The report said food giant Kernel Holding SA halted operations at all of its oilseed crushing plants after massive Russian drone attacks damaged its equipment and storage tanks. “Oilseed crushing is a continuous technological process with an elevated fire risk,” the company said. “A strike on operating equipment poses a direct risk of a large-scale fire and a threat to employees’ lives.” The Kremlin is preparing to hit more silos, dairy plants and sunflower oil factories, along with meat and poultry producers, the report said, citing a person at Ukraine’s military intelligence.
FAA issues nationwide ground stop… The Federal Aviation Administration on Friday afternoon issued a rare nationwide ground stop, effectively halting air traffic. “The FAA issued a nationwide ground stop for all U.S. airports following communication issues impacting multiple Air Route Traffic Control Centers,” the FAA said in a statement. The agency said “FAA technicians are investigating the issue” and that inbound international flights would be managed on a case-by-case basis. The incident comes a day after a massive outage that left millions of workers around the world unable to use Microsoft’s Outlook email and Teams meeting tools.
Global oil markets begin to rebalance… Global oil markets are tentatively rebalancing as supplies surpassed demand for the first time since the Iran war began, the International Energy Agency said in its November report on Friday. October global supply rose 2.3 million barrels a day (mb/d) to 105.4 mb/d on recovering Gulf crude exports, while annual 2026 demand is projected to fall 2.7 mb/d before rebounding by 2 mb/d in 2027, the Paris-based agency said. The IEA’s November supply and demand balances suggest that the global oil market will return to a surplus in 4Q26, with a more substantial build in 2027, but the agency warned that downside risks to the forecast persist, as attacks on shipping undermine maritime security.
- What about diesel? “For now, the severe tightness in product supply, especially for diesel, remains the overriding concern of the broader market and consumers,” the report said. “Persistent attacks on Russian energy infrastructure continue to choke off the country’s diesel supplies to international markets, adding to losses from the Middle East. At the same time, Atlantic Basin refineries, particularly in the United States, are running hard to capture high margins, while improved crude availability in Asia and fresh Chinese product export quotas could support higher refinery throughput rates in the region.”