Written Commentary
SOYBEANS
Soybeans had a positive start to the week this morning, as traders look forward to some fundamental direction from the USDA supply and demand data, expected to be released on the 14th. The pullback last Thursday failed to carry lower, and prices have recovered a good portion of Thursday’s sharp break. The overall trend remains higher, and the bulls retain the edge. The macro markets may be giving beans an additional boost this morning as stocks, energies, softs, and metals are all showing strength.
SOYBEAN MEAL
Although soymeal pulled back during the 2nd half of last week, prices have recovered some of those losses, and the break has so far been unable to extend lower. US meal export values remain well above South American origin, which has closed the US export window except for “captive” business. Brazil’s January through October meal exports hit 19.6 million tonnes, a record high for the period.
CORN
There was a slightly higher start for corn this morning following a very small trading range on Friday. March corn remains stuck in neutral, trading within its recent $0.11 range as traders look ahead to the WASDE report at the end of the week. Pre-report estimates should be out over the next day or so.
WHEAT
There was a positive start for wheat this morning following a selloff Thursday and Friday, which stopped just short of giving back 50% of the rally since the lows in mid-October. Weakness in Black Sea and EU prices continues to be a bearish issue for wheat, and there is very little additional market-moving news for traders to go on this morning. There has been no confirmation of any further Chinese purchases other than the 2 cargoes of US wheat announced last week. However, it appears lawmakers are close to ending the government shutdown, which could shed some light on whether China’s purchases were larger than announced
CATTLE
Cattle prices bounced back on Friday but closed poorly for the week. Late Friday afternoon, President Trump asked the Department of Justice to begin an investigation into meatpacking companies for potential antitrust violations, including price-fixing, collusion, and price manipulation. This news was expected to pressure the market at the opening this morning, and today’s close may be an important gauge of price direction. If the market can overcome the bearish headlines and close higher today, the odds of an upside correction will increase.
HOGS
February hogs closed lower again on Friday, and daily trading volume was the highest since July 14. Open interest fell by nearly 3,000 contracts, mostly in the December futures. February did reach downside retracement support, and traders will be looking for any sign of a technical bottom to indicate this extended downtrend has run its course. For now, the bear camp retains the edge.
MILK CLASS III
December Class III milk finished with a moderate weekly loss after reaching a 2-week low on Tuesday.
ENERGIES
January Crude Oil is slightly higher this morning but inside yesterday’s range. The market is not reacting to strongly to optimism that the US government shutdown could end this week. On Friday Hungary was granted a waiver from sanctions on buying Russian oil and gas after Hungarian President Orban met with President Trump at the White Houses. This was somewhat bearish as it would allow some of the Russian oil to hit the market without sanctions.
December RBOB is higher this morning but inside Friday’s wide range. News that the government shutdown may end this week may ease economic concerns, but it would also ease flight delays and open the way for Thanksgiving air travel, which may ease driving demand expectations. December ULSD is lower today after a spike higher on Friday to its highest level since October 23 and nearby prices reaching their highest level since July 14.
January Natural Gas traded to its highest level since July 21 overnight with cold temperatures/wintry conditions moving into the central US over the weekend and continuing east during the first part of the week. Temperatures have fallen below average for a change, but conditions are expected to turn mild as we move through the week.
DOLLAR INDEX
The USD index slipped to 99.52 after the Senate passed an initial stage of a deal to end the government shutdown. The agreement provides funding for the Departments of Agriculture, Veterans Affairs, and Congress, along with funding for other agencies through January 30. However, it does not include a key demand from Democrats to extend enhanced Affordable Care Act tax credits. The dollar has fallen for three straight sessions, with recent pressure coming from a sharp drop in consumer sentiment, with the University of Michigan’s consumer sentiment index falling to its lowest level in nearly three and a half years.
COCOA
March Cocoa edged lower overnight, following-through on a selloff from last week that began when the market traded up to the 50-day moving average and failed to move above that line. Some of the selling last week came from demand pessimism after Barry Callebaut said it expected sales of cocoa products to decline by a mid-single-digit percentage in its coming financial year due to high prices.
COFFEE
March Coffee is higher this morning, inside a triangle bound by the October 22 contract high at 414.80 and a low from three sessions later at 359.20. There has been no reported progress on talks between US and Brazilian trade representatives over the 50% tariff on Brazilian imports into the US.
COTTON
December Cotton has is higher this morning on optimism on reports that the US government shutdown may be nearing an end. Equity markets are higher and the dollar is lower, and both moves are supportive to cotton. Soybeans are higher as well, which lends support to cotton. Any optimism about China buying US soybeans seems to lends some hope that they will buy US cotton as well.
SUGAR
March Sugar is higher this morning after finding support above the 14-cent level last week. Indian Government and trade sources told Reuters that the government plans to allow 1.5 million metric tons of sugar exports in the 2025/26 season, up from 1.0 million allowed in 2024/25. Sugar producers had been asking for 2.0 million, so the 1.5 million may be construed as bullish against expectations.
PRECIOUS METALS
Gold prices are over 2% higher, as a softer dollar and expectations over a December rate cut from the Fed lifted prices, despite hawkish comments from policymakers. Fed Funds futures imply a 64.6% chance of a rate cut from the Fed, down slightly from a week ago.
Silver surged 3% to $49.745, reaching its highest level since October 20.
Copper prices are higher, lifted by hopes that the US government shutdown will end soon, sparking a risk-on rally in global equity markets that also lifted industrial metals prices. Benchmark three-month copper on the LME gained 0.9% to $10,815. Also lifting prices is data out of China that showed easing producer price deflation and a rise in consumer prices; however, some analysts have warned that deflationary pressures may not be over.
EQUITIES
The indexes are higher as optimism that the US government shutdown could end following the passing of a procedural vote lifted risk sentiment and led to a rise in global equities. In a procedural vote, senators advanced a House-passed bill that will be amended to fund the government until January 30. If the Senate passes the measure, it will still need to be approved by the House of Representatives and sent to President Trump, a process that could take several days. US markets logged their worst week since April last week, as worries of a growing AI bubble and high valuations triggered a selloff in tech that dragged on other sectors.
INTEREST RATES
Yields are higher across the curve as hopes that the US government shutdown could end fueled a risk-on rally, leading demand away from Treasurys. More importantly, the ending of a shutdown will allow for the release of US government data, including September’s nonfarm payroll report, which could shape expectations of how the Fed will move in December.
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