Written Commentary
SOYBEANS
The bean market retains its positive technical outlook heading into this week. Managed Money traders were huge buyers of nearly 95,000 contracts in the latest COT report, with the net long in beans now at just over 123,000 contracts. China is closed for its Lunar New Year holiday this week, and the USDA Outlook Forum begins on Thursday.
SOYBEAN MEAL
The meal market had a strong finish last week as May soymeal reached its highest price since December 9th, and bullish technical action and short covering remain the dominant supportive factors. China will be on its Lunar New Year holiday this week, and additional soy demand may be limited until their traders return to work next week. Speculative fund buying was very aggressive through the middle of last week in beans, and funds also pared down their net short meal position by just over 7,400 to 14,325 contracts net short.
CORN
Corn is starting the week under modest pressure, due to spillover weakness from wheat and a rally in the US dollar. Prices closed near the week’s highs on Friday, but, as has been the case recently, the market is having difficulty extending to the upside.
WHEAT
Trading volume in Chicago wheat last week set new all-time highs as funds reduced short positions. COT data showed Managed Money traders holding a short position of just over 85,500 contracts as of last Tuesday, but the net short is likely smaller than that based on price action during the 2nd half of the week. Thursday’s strong close was unable to carry beyond the 200-day moving average resistance, and the market is extending the pullback this morning.
CATTLE
The cattle complex closed mixed on Friday, but additional strong cash trade after Friday’s futures close may result in a higher start this morning. Price action late last week was unable to extend to the upside. Open interest was little changed in live cattle on Friday, but declined by 1,000 contracts in feeders. COT data through mid-last week showed
HOGS
April hogs closed lower each day last week on significant fund selling as technicals turned sour. Open interest dropped nearly 4,000 contracts as Managed Money traders continued to liquidate positions in the 2nd half of last week. However, Friday’s COT data showed funds increased their long by just over 4,400 contracts as of Tuesday of last week, taking the net long to a little over 133,000.
MILK CLASS III
March Class III milk finished last week with a sizable loss after falling to a 2-week low on Friday.
ENERGIES
April Crude Oil was higher early Tuesday, inside the rather wide consolidation of the past two weeks. US/Iran talks resumed this week Geneva, but belligerent comments from the nations’ leaders as well as actions by their militaries have energy markets on edge. The US has deployed a battle force to the region and US President Trump has said “regime change” in Iran may be the best thing that can happen. Iran on Monday carried out a drill in the Strait of Hormuz. Two US officials told Reuters that the US military is preparing for the possibility of weeks of operations against Iran if Trump orders an attack. The Baker Hughes rig count on Friday showed US oil rigs in operation were down 3 rigs to 409 last week.
Like crude oil, gasoline and diesel were finding support early Tuesday on uneasiness regarding the US and Iran.
April Natural Gas extended its selloff early Tuesday but subsequently bounced off its lows. The market approached but did not enter the gap from the open on January 20 when it took off ahead of the extreme cold event that came later in the month. The 6-10 and 8-14 day forecasts still show warm weather dominating most of the US through March 2.
DOLLAR INDEX
The USD Index is modestly higher as investors reposition ahead of the latest FOMC meeting minutes and PCE inflation data due later in the week, with liquidity thinner as several Asian markets remain closed for the Lunar New Year. Recent data have delivered mixed signals, combining firm job growth with a cooling headline inflation trend, though pockets of price stickiness persist across select sectors.
COCOA
May Cocoa extended its losses early Tuesday to a new contract lows The nearby contract fell to its lowest level since early October, 2023. The selloff continues as buyers are reluctant to pay official prices for beans in Ivory Coast and Ghana. Ghana cuts its farmgate price for cocoa by a third last week; it had been nearly $5,300 per metric ton, and the new price will be around $3,580. Reports out of Ghana last week said there was about 50,000 metric tons of unsold cocoa sitting at its ports. The drop in the Ghana price is expected to put pressure on Ivory Coast to lower its farmgate price as well. Ivory Coast cocoa arrivals for the week ending February 15 totaled 26,000 metric tons, down from 32,000 the previous week and 27,000 for the same week a year ago.
COFFEE
After a modest rally last week, May Coffee gapped lower early Tuesday and fell to its lowest level since August 11. The market has moved back into month-long consolidation from last July, which it hesitated to penetrate last week. Like cocoa and coffee appears to be under liquidation pressure as supply pressures build following an unprecedented bull market the previous two years. Good weather in Brazil points to a strong crop this year, though there is some disagreement on how strong. More coffee appears to be heading to exchange warehouse stocks.
COTTON
May Cotton was lower early Tuesday following a modest rally off contract lows last week. Short covering and an extremely oversold technical condition may have supported last week’s rally. There also may be a reluctance to push the market too much lower ahead of the growing season ahead of us. The USDA Outlook Forum this Thursday and Friday will offer some initial ideas on plantings this summer. On the other hand, a sluggish stock market keeps cotton demand expectations subdued, and the slow export sales pace does not offer much support.
SUGAR
May Sugar gapped higher overnight following a move to new contract lows on Wednesday. There were some comments last week that India’s crop may not be as large as had been previously expected, but we’re not sure where this is coming from. On Friday, India allowed the export of an additional 500,000 metric tons of sugar for the 2025/26 season, raising the total allocation to 2.0 million, which may have initially been viewed as verification that their crop was even larger than previously estimated. However, this move may have had less to do with the state of the crop and more to do with an attempt by the government to appease growers unhappy about the new US-India trade framework
PRECIOUS METALS
Gold prices are lower as a stronger dollar pressured prices, while investors await updates on US-Iran nuclear talks and PCE inflation data out later in the week. April contracts fell below $5,000, pressured by a stronger dollar and as selling in the equities results in broad-based prompting investors to trim metal holdings to meet margin calls elsewhere.
Silver futures are down over 5% to $73.77 as a stronger dollar and equity weakness force traders to unwind positions.
Copper prices are lower as rising warehouse inventories pressured prices amid thin-trading conditions during the start of the Lunar New Year.
EQUITIES
Equity indexes are lower as investors continue to trim technology exposure globally, with France’s Dassault Systèmes and Germany’s Siemens posting notable losses in European trading amid persistent concerns that advances in AI could disrupt legacy industrial and enterprise software models. The uncertainty has reinforced a rotation into more defensive and “AI-insulated” sectors, including utilities, consumer staples, mining, construction, and telecommunications.
INTEREST RATES
Treasury yields are moving higher at the front end and remain lower at the long end as a tech selloff in the equities markets supported a global bond rally ahead of the Fed’s meeting minutes on Wednesday and PCE inflation data later in the week. January’s CPI print reinforced a broader disinflation trend, but services inflation remained sticky.
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