First Sale of U.S. Soyoil to China Since 2020-21 Marketing Year

Modified format for today’s Updates.

— Today is the last trading day of the month and is typically one of the lightest-volume trading days of the year, as many U.S. market participants are still out for the Thanksgiving holiday that was Thursday. The U.S. stock market closes early. The Dow today opened up around 70 points higher.

— USDA daily export sales:
• 840,000 MT soybeans to unknown destinations during 2024=2025 marketing year
• 151,700 MT soybeans received in the reporting period to unknown destinations during 2024-2025 marketing year

— U.S. soybean oil, soybeans and initial 2025 pork, beef sales to China. USDA’s weekly Export Sales data for the week ended Nov. 21 included activity for 2024-25 of net sales of 465 metric tons of corn, 175,450 metric tons of sorghum, 1,087,018 metric tons of soybeans, 28,190 running bales of upland cotton, and 13,000 metric tons of soybean oil, the first such sales for 2024-25 (and first sales of soybean oil to China since the 2020-21 marketing year). Activity for 2024 included net sales of 1,519 metric tons of beef and 1,441 metric tons of pork. The first sales for 2025 were reported, including 233 metric tons of beef and 20 metric tons of pork.

— Ag trade: South Korea tendered to buy 70,000 MT of optional origin non-GMO soybeans. Turkey tendered to sell 100,000 MT of durum wheat. Egypt made no purchases in a tender to buy an unspecified amount of wheat and vegoil. South Korea purchased 60,000 MT of rice to be sourced from Vietnam and Thailand.

— No overnight grain trade; abbreviated trading session today. There was no overnight grain trade due to the Thanksgiving holiday. Grain and livestock markets opened at 7:30 a.m. ET and will close at 11:05 p.m. ET. Chinese soybean, corn and soymeal futures at the Dalian Commodity Exchange closed lower on Friday, while soyoil futures rose. Chinese cotton futures at the Zhengzhou Commodity Exchange closed higher on Friday. The U.S. dollar index is around 150 points lower this morning, while front-month crude oil futures are about 45 cents higher.

— Cash cattle trades sharply higher. Cash cattle traded $2 to $5 higher on Wednesday as packers actively bid for cattle to secure supplies for the week. Live cattle futures should be supported by the cash trade, as prices were stronger than expected.

— Cash hog fundamentals continue to weaken. The CME lean hog index is down another 39 cents to $85.51 as of Nov. 26, extending the belated seasonal price slide, though it remains above the mid-October low. The pork cutout fell $2.21 on Wednesday to $88.94, the lowest since Feb. 14.

— Eurozone inflation edges higher in November, as expected. The Eurozone’s annual inflation rate rose to 2.3% in November 2024, up from 2% in October, aligning with market expectations, according to preliminary data. This increase reflects base effects as last year’s sharp energy price declines fade from annual comparisons. Energy prices fell by 1.9%, easing from a 4.6% drop in October, while non-energy industrial goods costs climbed 0.7%, up from 0.5%. Inflation slowed slightly for services (3.9% vs. 4%) and food, alcohol, and tobacco (2.8% vs. 2.9%). Core inflation remained steady at 2.7%, defying expectations of a rise to 2.8%. Month-on-month, the CPI decreased by 0.3%, reversing October’s 0.3% increase.

— Euro faces worst monthly decline in over a year amid economic and political pressures. The euro dropped roughly 3% in November to $1.0575, marking its worst monthly performance in over a year. Weak Eurozone growth, fears of U.S. tariffs, and political instability in Germany and France have positioned the Euro as the worst-performing G10 currency. Despite hawkish ECB comments and a temporary reprieve from U.S. trade focus, concerns over stagnating business activity and subdued German inflation persist. While Eurozone inflation reached 2.3% in November, steady core inflation at 2.7% has reinforced expectations for aggressive ECB rate cuts. Investors now increasingly speculate on parity with the dollar, as divisions among ECB policymakers complicate the outlook.

— Gold rises as dollar weakens, geopolitical tensions mount. Gold extended its rally for a fourth day, climbing 0.9% to $2,662.52 an ounce, buoyed by a weaker U.S. dollar and escalating tensions in Ukraine. Russian President Vladimir Putin’s threats to target Kyiv with ballistic missiles heightened demand for safe-haven assets. The Bloomberg Dollar Spot Index slipped 0.2% and is down 1.1% this week, making gold more affordable for global buyers. Despite a weekly decline of 2% amid deescalating Middle East tensions, gold remains up nearly 30% year-to-date, driven by Federal Reserve monetary easing, central bank purchases, and geopolitical risks. Analysts predict record highs by 2025, with bullish forecasts from Goldman Sachs and UBS. Silver, platinum, and palladium also rallied as markets priced in a growing likelihood of a Federal Reserve rate cut next month.

— The dollar is recording its biggest weekly loss in three months as investors rethink the Trump trade. Bloomberg’s U.S. currency index slid 0.2% on Friday, bringing the week’s decline to 1.1%. The greenback weakened against most Group-of-10 currencies, notably falling sharply against the yen, which rose to the highest level in more than a month against the greenback, strengthening past 150 for a time. The dollar slipped against major currencies, with an index of greenback strength headed for its first weekly decline in two months. The dollar’s rally faltered following President-elect Donald Trump’s tariff threats, the nomination of Scott Bessent as Treasury Secretary, and a drop in U.S. Treasury yields. Analysts suggest the decline reflects market exhaustion after the post-election surge, with some attributing it to portfolio rebalancing and profit-taking. Despite this week’s retreat, Bloomberg’s dollar index remains up over 5% for the year. Currency traders anticipate sideways volatility until clearer policy direction emerges after Trump’s January inauguration. Meanwhile, the Brazilian real dropped to a record low as a proposal to cut $12 billion in public spending disappointed investors.

— Mexico’s president refutes Trump’s border closure claim. Late Wednesday, Trump announced that he had a “productive” call with Mexico’s President while Canada announced measures to strengthen the border, easing trade tensions between the three countries. But Mexican President Claudia Sheinbaum rejected President-elect Donald Trump’s assertion that she agreed to “close the southern border” during a recent call. Trump posted on Truth Social that Sheinbaum promised to halt migration to the U.S., but Sheinbaum clarified on X that “Mexico’s position is not to close borders.” Instead, she emphasized Mexico’s ongoing efforts to manage migration internally, stating no caravans are currently reaching the U.S. border. The leaders also discussed strategies to address the fentanyl crisis. Their conversation followed Trump’s announcement of potential 25% tariffs on Day One of his second term on Mexican imports to curb drug trafficking. While Sheinbaum ruled out a tariff war, she warned of Mexico’s potential economic countermeasures. President Biden criticized the tariffs as “counterproductive,” highlighting the importance of strong relations with North American allies.

— Technical perspectives for WTI crude oil, via The Sevens Report:
• Technical View: The primary trend in oil remains bearish despite the countertrend rally at the start of the fourth quarter that carried WTI back to the mid-$70s range.
• Primary Trend: Bearish (since the week of Aug. 19, 2024)
• Key Resistance Levels: $71.62, $72.67, $74.40
• Key Support Levels: $70.13, $$69.04, $67.97

— Tensions persist despite Lebanon ceasefire. Israel and Hezbollah traded accusations of violating the ceasefire in Lebanon, which began on Wednesday. Israel reported firing at “suspects” in southern Lebanon and later claimed its air force targeted a Hezbollah rocket-storage facility. Meanwhile, Hezbollah accused Israel of attacking Lebanese border villages. The truce, intended to last 60 days, is already under strain.

— GOP faces slim majority in House amid Trump 2.0 appointments. The Republican Party’s majority in the U.S. House of Representatives has narrowed to a razor-thin margin. This is due to Democratic electoral gains and President-elect Donald Trump selecting three GOP House members for his administration. Starting January, Republicans will hold no more than 217 seats, compared to Democrats’ 215 after an expected California win — Democrat Derek Tran defeated Republican incumbent Michelle Steel in the race for California’s 45th Congressional District, AP projected. Tran, an Army veteran of Vietnamese descent, will flip a seat that Steel had held since 2021. The slim two-seat majority leaves “no room for error” in advancing Trump’s legislative agenda, analysts note. Special elections to fill the vacant seats won’t occur until April.

— World Trade Organization (WTO) members unanimously agreed to reappoint Ngozi Okonjo-Iweala as director-general for a second term, solidifying her position for another four years. Okonjo-Iweala’s new term will begin on Sept. 1, 2025. The upcoming term is anticipated to involve numerous tariff-related conflicts.
• Trump factor: The return of Donald Trump to the U.S. presidency poses a significant threat to the WTO’s operations. Trump’s previous administration was critical of the WTO and undermined its dispute resolution mechanism.
• There are concerns about widespread trade conflicts and new tariffs on countries like China, Canada, and Mexico.
• Reform pressures: There is mounting pressure for reforms within the WTO, especially concerning its dysfunctional appeals system.
• Governments are increasingly using trade measures to address issues such as security, competition, and re-industrialization, often disregarding WTO commitments.

— Cotton AWP moves back higher. The Adjusted World Price (AWP) for cotton is 57.53 cents per pound, effective today (Nov. 29), up from 55.91 cents per pound the prior week. The AWP has remained below 60 cents per pound since the week of Oct. 18, but remains above the 52-cent-per-pound threshold for any LDP. Meanwhile, USDA announced Special Import Quota #7 will be established Dec. 5 for 31,716 bales of upland cotton, applying to supplies purchased no later than March 3 and entered into the U.S. no later than June 2.

— Agroconsult forecasts record Brazilian soybean production, exports. Brazil is expected to produce a record 172.2 MMT of soybeans in 2024-25, according to Agroconsult. That would be up 10.7% from last year and 6.0% above the 2022-23 record. Brazil’s government crop forecasting agency Conab expects production to be 166.1 MMT. Agroconsult forecasts Brazil will export a record 103.4 MMT of soybeans in 2025. Agroconsult forecasts Brazil’s corn production rising to 132.7 MMT.

— EU lowers wheat crop estimate to 12-year low. The European Commission reduced its estimate of usable common wheat production in 2024-25 by 300,000 MT to 112.6 MMT. That’s down 10% from last year and the lowest since 2012-13. The forecast for EU soft wheat exports in 2024-25 was kept unchanged at 25.0 MMT, down 10.3 MMT (29.2%) from 2023-24.

— India to sell wheat reserves to flour millers. India plans to sell 2.5 MMT of wheat from its state reserves to bulk consumers such as flour millers and biscuit makers. State-run Food Corporation of India (FCI) will soon start offering wheat from its inventories by inviting tenders and will sell the grain at 23,250 rupees ($275.34) a ton, a government official said. The offered quantity is far lower than market expectations and will not be sufficient to bring down prices substantially. India’s wheat stocks in state warehouses stood at 22.3 MMT at the start of November, slightly higher than 21.9 MMT last year, but far below five-year average of 32.5 MMT.

— France’s biggest grain ports risk more disruption due to strikes. A French dock workers union called a series of strikes covering all of the country’s ports, potentially slowing grain exports in the EU’s biggest agricultural producer. The National Federation of Ports and Dockers-CGT announced a 48-hour work halt starting Dec. 9 and a suspension of all overtime and special work shifts, according to a statement on Thursday. Four-hour strikes are planned on 10 different days between Jan. 7-31. Ports affected by the dock workers strike include the biggest grain terminals at the northern towns of Le Havre and Rouen that handle 50% of the country’s wheat and barley exports.

— Indonesia committed to introduce B40 on Jan. 1. Indonesia remains committed to start implementing a 40% mandatory biodiesel mix with palm oil-based fuel, or B40, on Jan. 1, its chief economic minister said. Indonesia currently requires B35 usage. He said Indonesia’s palm oil fund agency would be able to finance the gap between the cost of palm-oil based fuel and fossil fuel. B40 will boost Indonesia’s palm oil use for biodiesel to 13.9 MMT, from the estimated 11 MMT needed this year with B35, Indonesia’s biofuel producers association APROBI has previously estimated.

— Coffee prices surge to 47-year high. Global coffee prices have soared to their highest level in 47 years, fueled by severe weather in Brazil and Vietnam, the leading producers of arabica and robusta beans. Brazil experienced its worst drought in 70 years, followed by heavy rains, while Vietnam has faced three consecutive years of low output. Arabica beans hit $3.18 per pound on Wednesday, prompting Nestlé, the world’s largest coffee company, to raise prices amid tightening global supplies.