Commodities Mixed; Yen Watch Into Thanksgiving
Agricultural and currency markets diverged as traders recalibrated risk ahead of key USDA updates, shifting currency dynamics, and post-shutdown data delays. Price action was choppy across softs, grains, and livestock, while FX desks weighed the odds of targeted yen intervention during thin holiday liquidity.
Soft commodities delivered a split session. Cotton futures eased modestly, while coffee spiked on support from a stronger Brazilian real before giving back gains as optimism around potential tariff relief rekindled supply concerns. In grains, corn rallied as analysts trimmed yield expectations and cash bids hovered near $3.97 per bushel. Wheat posted slight advances with attention fixed on the upcoming USDA report, where markets are bracing for a possible 23 million bushel increase in U.S. stocks. Regional dynamics remain mixed, with stronger French output offset by a smaller Russian crop.
Livestock was broadly softer. Live cattle contracts slipped by roughly $1.25 to $2, even as feeder cattle found support, with the November contract gaining about $1.35. Boxed beef values weakened and the Choice/Select spread narrowed to approximately $14.51, signaling softer wholesale demand. Lean hog futures fell by $1.20 to $1.80, aligning with a drop in the national base hog price to around $78.78, while the pork cutout stayed comparatively firm near $96.14.
Macro conditions added another layer of uncertainty. Although the government shutdown has ended, backlogs and delayed economic data persist, with estimated costs of $10–15 billion per week during the disruption and travel restrictions expected to unwind over the coming week. In FX, USD/JPY remains on intervention watch. Market chatter suggests Japan’s Ministry of Finance could prefer a thin-liquidity window—such as the Thanksgiving period—to maximize impact, rather than acting during peak trading hours when moves tend to be muted.
Key Points – Cotton slipped while coffee whipsawed, rallying on a stronger real before reversing on tariff optimism. – Corn futures rose on lower yield expectations; cash corn hovered near $3.97 per bushel. – Wheat edged higher as traders eyed a USDA update that may lift U.S. ending stocks by 23 million bushels. – Live cattle declined; feeders firmed; boxed beef softened with the Choice/Select spread near $14.51. – Lean hogs dropped alongside a weaker national base price; pork cutout held around $96.14. – Post-shutdown data delays persist, and USD/JPY faces elevated intervention risk into the thin Thanksgiving trading period.
