DeLong Commentary

CBOT Pricing:

Corn closed mixed, with nearby contracts lower and new-crop months 1–2 cents higher. The Mar26 contract fell 1.25 cents to close at $4.275. May26 futures slipped 0.75 cents to $4.365. Deferred contracts posted modest gains. Spreads widened, with the Mar–May settling at -9.0 cents and the Jul–Dec at -15.5 cents.

Soybeans traded lower overnight but reversed mid-morning and moved higher into the close. The Mar26 contract gained 1.5 cents to settle at $11.24. May26 futures added 2 cents, closing at $11.395. Nov26 futures rose 4 cents to finish at $11.105. Spreads weakened, with the Mar–May at -15.5 cents and the Jul–Nov at +42.0 cents.

Market Headlines:

Strong January job data reaffirms the Federal Reserves’ choice to not cut interest rates:

Last month, Federal Reserve policymakers ended their streak of rate cuts and held the federal funds rate at 3.5–3.75%, despite pressure from the administration to lower rates. January labor market data reinforced that decision. Nonfarm payrolls increased by 130,000 in January, exceeding expectations for a 70,000 gain. The unemployment rate declined to 4.3% from 4.4%. The data points to a stable labor market and reduces the immediate urgency for additional rate cuts. Several officials, including Dallas Fed President Lorie Logan, are now focusing their concern on inflation and wanting to avoid excessive rate cuts.

Fed Governor Christopher Waller stated that labor market conditions in 2025 have been weaker than desired and voted against holding rates steady. Revised data released alongside the report showed average monthly job growth throughout the year was 15,000, supporting his concerns about underlying labor market softness.

Poland and Italy will not join US President Trump’s Board of Peace:

The proposed Board of Peace aims to address global conflicts, though some critics argue it could overlap with or affect the role of the United Nations. Membership terms last three years, with the option for permanent status for countries that contribute $1 billion toward the board’s activities. Of the 50 invited countries, 35 leaders have committed to participate. Confirmed participants include Israel, Saudi Arabia, the UAE, Jordan, Qatar, Egypt, Turkey, Hungary, Morocco, Pakistan, Indonesia, Paraguay, and Vietnam, among others.

Polish Prime Minister Donald Tusk cited concerns about the structure of the board as the reason for declining the invitation but noted that Poland does not rule out participation if circumstances change. Italy’s Foreign Minister Antonio Tajani stated that constitutional constraints prevent Italy from joining, as their constitution states international organizations that operate under unequal terms among member states.

Weekly EIA Energy Data:

(week ended 2.6.26)

US ethanol production averaged 1.110 million barrels per day (mbpd), exceeding market expectations of 950,000-1.056 million bpd. Output increased from the previous week’s 956,000 bpd, which severe cold temperatures across the Midwest had reduced. Production returned to a pace consistent with recent trends. Excluding the weather-impacted week and the week of 1.9.26, which saw an unusually large surge in output, the four-week average stands at 1.110 mbpd. When excluding only the prior week, the four-week average is 1.114 mbpd.

US ethanol stocks totaled 25.247 million barrels, within market expectations of 25.0-25.7 million barrels. Stocks increased 0.44% from the previous week’s 25.136 million barrels but remain 1.7% below the same week last year, when inventories stood at 25.692 million barrels.

US ethanol exports were estimated at 137,000 bpd, down from 216,000 bpd the previous week and below the four-week average of 182,000 bpd. Export volumes also trailed last year’s same-week level of 150,000 bpd.

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