Written Commentary
SOYBEANS
There was a mostly steady start to the week this morning on limited market moving weekend news. Beans are bracing for a potentially bearish USDA report tomorrow, as yields are expected to rise and ending stocks to fall, capping bullish enthusiasm at the start of the week.
SOYBEAN MEAL
The pressure on the soymeal market eased last week as prices consolidated after a sharp 3-week-long liquidation selloff. Open interest has been declining since mid-October and now sits near its lowest level since mid-May. Export sales were strong again last week, and a significant export program off the Pacific Northwest coast continues, but that hasn’t stopped the price slide as Managed Money traders continue to liquidate long positions.
CORN
A small range again overnight highlights the lack of speculative interest lately as prices continue to drift sideways. Tomorrow’s USDA Supply & Demand report may usher in higher volatility, and ending stocks are expected to fall slightly to 1.840 billion bushels, down from 1.849 billion in October, with yields sinking to 180.3 bushels per acre, down from 181.2 last month. Lower yield potential is likely to give the market some light support into tomorrow’s report. Still, there are no major weather issues in South America, and US harvest weather looks ideal again this week.
WHEAT
The bearish trend in wheat continues ahead of the midweek Black Sea peace talks in Abu Dhabi between Russia, Ukraine, and the US. While a full-scale peace agreement isn’t expected yet, it wouldn’t be surprising to see at least an agreement on shipping and energy infrastructure attacks, which is keeping selling pressure on the wheat market. Ukraine’s wheat exports since July 1 are down 39% year over year.
CATTLE
The cattle market finished slightly weaker on Friday but bounced well above the intraday lows, closing at the upper end of the day’s range. Trading volume on Friday was strong. Cash weakness and declines in the stock market weighed on the market last week, but stocks are recovering this morning, and with Friday’s high-range close, a higher open is likely.
HOGS
The hog market had a tough week last week, with the December contract closing at its lowest level since summer 2020. December closed lower nearly every day last week and gapped lower on Thursday morning. During the downswing from mid-October through early last week, open interest showed steady gains on new short positioning, but last week open interest began to decline. Friday’s drop was over 13,000 contracts in the December, while overall open interest fell over 5,700. The sharp weakness over the last few sessions suggests a shift, as shorts may now be taking profits.
MILK CLASS III
December Class III milk finished last week with a minimal loss after climbing up to a 2-week high on Tuesday.
CRUDE OIL
January Crude Oil is back near support around $85 that it has held more or less since early September. The latest statements from President Trump that he is highly unlikely to order fresh attacks on Iran as long as the talks to end the conflict progress counters some expectations prior to the election that suggested he was planning a major assault. Last week there was talk of global supply returning to a surplus condition, with Mideast shipments recovering and demand having fallen due to high prices.
NATURAL GAS
January Natural Gas was sharply higher early Monday, as a slowdown in US output this month suggests a tightening supply potential. LSEG said average gas output in the US Lower 48 states has fallen to 111.6 billion cubic feet per day (bcfd) so far in November, down from 113.4 bcfd in October. In the meantime, average gas flows to the nine major US LNG export plants are running around 18.8 bcfd, up from 18.4 bcfd in October and on track to tie the record from April. A little more seasonal showing up in the 6-10 day forecast in the northeast and eastern Great Lakes.
DOLLAR INDEX
The USD index is 0.44% lower at 101.854, giving back part of Friday’s sharp advance as improving risk appetite and lower oil prices reduce demand for defensive positions. Stronger-than-expected employment data reinforced expectations for a December Fed hike. The pullback looks more like a partial reversal of that move than a decisive shift in the dollar’s underlying support
PRECIOUS METALS
December gold contracts are recovering from Friday’s selloff as the dollar and oil prices eased. Expectations for a potential de-escalation in the Iran conflict are helping reduce energy-driven inflation concerns, although continued attacks on shipping near the Strait of Hormuz leave the outlook uncertain. The immediate test comes from Tuesday’s CPI report, followed by producer prices Friday.
December silver contracts are up 1.4% to $52.680.
LME copper rose around 0.6% to $13,853; US prices are up 1.51% to $6.3315. The dollar’s retreat and exceptionally tight physical supply in China return to focus. Physical-market indicators remain supportive. The Yangshan import premium reached a record $230 a ton, while SHFE inventories fell more than 24% last week to 33,848 tons, their lowest since January 2024. Reduced domestic smelter output, raw-material constraints and limited seaborne arrivals have tightened cathode availability despite subdued Chinese demand growth.
EQUITIES
Equity index futures are recovering as traders continue to buy the dip in tech shares ahead of Tuesday’s inflation data. A volatile week in which concerns about tighter data-center regulation and the sustainability of AI investment pushed the Nasdaq Composite into correction territory. Lower oil prices are providing some relief, but strong employment data and elevated expectations for a December Fed hike remain headwinds for valuations. The central question is whether the recent selling represents a broader deterioration in risk appetite or a rotation away from crowded technology positions. Last Thursday’s declines extended across all S&P 500 sectors, suggesting the weakness was not confined to AI, although technology and semiconductor shares suffered the largest losses. A sustained recovery will likely require greater confidence in both the inflation outlook and the durability of AI-related spending.
INTEREST RATES
Yields moved lower across the curve. The rates outlook remains caught between resilient economic activity and instability in equities. Tuesday’s CPI report will test whether current tightening expectations are sufficient. A firmer-than-expected reading could push investors to price a more restrictive policy path into 2027, particularly if underlying inflation remains persistent. A softer report would ease some of that pressure, although the strength of October’s employment data could limit how far expectations for a December hike retreat.
COCOA
March Cocoa fell to its lowest level since June 29 early Monday, pressured by steady growth in exchange stocks and perhaps a less threatening viewpoint regarding El Nino. World Weather Inc. says the “Super” El Nino is not presenting the level of risk that previous events have and that its influence will continue to be less adverse relative to the hype. They noted an erratic rainfall pattern in West Africa over the weekend that was too light to spark a net increase in soil moisture in many areas. More of the same is expected over the next week to ten days, but that is typical for this time of year. However, they also said that cocoa areas are experiencing a good finish to the rainy season.
COFFEE
March Coffee managed to hold above last week’s low early Monday but just barely. Brazil exports in October were very strong and ICE exchange stocks increased last week for a change. Brazil exported 287,348 metric tons of green coffee in October (4.789 million bags), up 23% from 233,094 (3.885 million bags) in October 2025. In contrast, Colombia’s National Federation of Coffee Growers reported on Friday that October washed arabica production totaled 1.11 million bags, down 8% from 1.21 million in October 2025. The group said months of heavy rain had hurt flowering and bean development.
COTTON
March Cotton extended its bounce off last week’s low early Monday and reached its highest level since October 26. Good export sales last week and expectations for a slight tightening in the US and global supply for Tuesday’s supply demand update lent support. The dollar fell back overnight after a rally on Friday, which at least helps export prospects. Last week’s export sales report showed net sales of 277,500 bales for the 2026/27 marketing year, the largest so far. For the USDA supply/demand report on Tuesday, the Bloomberg survey has an average expectation for US 2026/27 cotton production at 13.16 million bales, with a range of estimates of 12.65-13.60 million. This would be down 0.28 million from the 13.44 million bales estimated in the October update.
SUGAR
March Sugar has managed to hold above the 18-cent level, as the expectations for soaring Brazilian exports in the wake of the collapse in their currency perhaps met up with the reality that their sugar output remains low. Brazil exported 3.246 million metric tons of sugar in October, down 21% from 4.163 million in October 2025. This did not come as a complete surprise, as Brazil’s output this year has been hampered by too much rain that interrupted harvest and reduced sugar content in the cane. The weak Brazilian real is expected to boost sales, but their crop prospects are limited for the remainder of the year. This year’s rains are good for next year’s crop.
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