Periodic Updates on the Futures Markets

January canola is down $5.00 per metric ton (mt), March canola is down $5.70 per metric ton (mt), March soybean oil is down 1.37 cents/pound, February European rapeseed is down 5.50 euro per mt and February Malaysian palm oil is down .76%. March oats are up 2 cents/bushel. January crude oil is down $1.33 per barrel, January ULSD is down $.0473 per gallon, and the December Canadian dollar is up .00090 at .73000. The March U.S. Dollar Index is down .172 at 97.785 and the January Brazilian real is down .00135 at 0.18240.

The December liquidation event continued with selling intensifying again once the day session resumed. The main driver continues to appear to be President Trump’s obsession with getting food and fuel prices down. Besides doing whatever could be done to bring an end to the war in Ukraine and get Russian oil supplies back on the market, the administration officially delayed a final ruling on biofuel blending mandates for 2026 until the first quarter of 2026. A decision on small refinery exemptions has also been kicked down the road, leaving vegetable markets at a loss when it comes to details impacting their largest demand component. The larger-than-expected November soybean oil inventories in Monday’s NOPA crush report demonstrated the real impact of such delays.

With that, crude oil has fallen to lows not seen since February 2021 with gasoline futures doing the same. The national pump price would be higher, but gasoline futures have now fallen to $1.68/gallon, far below Trump’s $2/gallon objective. Diesel futures have not taken out their April lows and remain above $2/gallon but are roughly at five-year lows as well.

With that, selling intensified across grain and oilseed markets with gaps higher from the end of October now filled for both soybeans and wheat. Soybean oil is much weaker than soybean meal on the developments, falling to the lowest levels seen since June when the new budget bill pointed to strong support for the biofuel industry. The break in soybean oil has naturally pulled the rug out from under canola and European rapeseed as well. But with ag markets so oversold, it does suggest a bounce shouldn’t be far off.

In outside markets, it turns out bad news is being treated as bad news. Equities are sharply lower while Treasuries are quietly higher on a weak payroll report Tuesday morning; 64,000 jobs were added in November, above the 50,000 expected — but 105,000 jobs were lost in October, much worse than expected. That left the unemployment rate at 4.6%, above the expected 4.5%, September’s 4.4% and August’s 4.3%. It also marked the highest unemployment rate since 2021, leaving the door open to further rate cuts ahead. That said, the market is still not pricing in another quarter-point cut in the fed funds rate until April. The U.S. 10-year note rate is barely lower at 4.16%. With that, the prospects of lower interest rates to come (in defense of the labor market) continue to weigh on the U.S. dollar.