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The commodity market is mostly looking bleak on this new moon day, especially driven by a significant drop in the energy sector.
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Treasury futures are showing slight increases, hinting that the next chair of the US Federal Reserve may very well cut the federal funds rate this June.
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In the grain markets, soybeans have managed a small lift, hitting 11, though most sectors are still down.
Morning Snapshot: With February’s winter days (and summer in South America) rolling in, the commodity landscape looks quite red. If you check the futures market heatmap early Monday, you’ll notice that financials, particularly US Treasury futures, are standing out in the green. This might be due to recent comments from the self-proclaimed Venezuelan president about appointing a figurehead to the U.S. Federal Open Market Committee. As the new month kicks off, the next FOMC meeting isn’t until March, but there’s a market expectation for a 25 basis point cut in June. Interestingly, that’s likely because of the anticipated first chair, Kevin Warsh, known for his puppet connections. On the far side of the heat map, energy is really struggling, averaging a loss of 7.3%. Natural Gas, often nicknamed the Widow Maker, dropped an alarming 15.9%. As for metals, silver is showing a slight bounce back from last Friday’s downturn, while gold remains under pressure.
Corn: Like other grain sectors, corn has been in decline since early on. During morning trading, the March futures for corn (ZCH26) fluctuated within a 3.75-cent range, with an increase in trading volume to 26,000 contracts, but it was down 1.75 cents by the time of this writing. Last Friday saw March corn finish 2.5 cents lower, having dropped 5.5 cents earlier in the session. On the positive side, the decrease in the carry for both March-May and May-July futures indicates some commercial interest. The National Corn Index rounded off January at approximately $3.9475, down around 2.0 cents, offering some stabilization. Yet, the March futures plunged to 33.5 cents, down from the previous week’s low of 32.25 cents—marking a five-year low, alongside last week’s closing at 33.75 cents, the lowest in a decade. The latest Commitment of Traders Report shows a net short position in futures of 31,670 contracts as of January 27, down 20,030 from the prior week. Goldman Roll is set for this Friday.
Soybeans: The soybean market was also grappling with pressure before dawn today. The March futures (ZSH26) dipped 12.5 cents overnight despite a trading volume of 22,500, and it was down 6.25 cents at this point. If you’re thinking about what tune matches the current state of U.S. soybeans in February, maybe give REM’s “It’s the End of the World as We Know It (and I Feel Fine)” a spin. By the end of this month, Brazil will be wrapping up its soybean harvest for 2026, aimed for export. They’ve become quite efficient, thanks to infrastructure investments, cutting transport time from fields to ports to under a month. Consequently, there may be diminishing demand for U.S. soybeans by that time. It’s estimated that U.S. fleets will represent about 77% of total export shipments as we reach the midpoint of the marketing year. Recent export reports reveal that U.S. shipments totaled 1.146 bb, down 38% compared to last year’s 1.841 bb, and there remains 226 MB of unshipped sales to China.
Wheat: The wheat sector is also down across the board from the beginning of the day and week. After a significant winter storm impacted the U.S. plains and Midwest regions, attention now shifts to the new winter crop. There have been discussions regarding potential winterkill affecting both HRW and SRW winter wheat, which is always intriguing given that both types are designed for this season. Nevertheless, there’s been commercial support for new crop futures recently, with the July-September SRW spread ending last Friday covering 54% of the full commercial carry—down from 63% the previous week and 58% the same week last year. As for HRW, the July-September spread still covers 64%, a decline from 69% a week earlier and 74% a year ago. Although these figures aren’t exactly bullish, they’re not straightforwardly bearish either. Currently, the SRW July futures (ZWN26) are down 4.25 cents, after dipping 7.75 cents overnight, while HRW July futures (KEN26) are down by 6.0 cents early this morning.
