Mexico confirmed it has agreed with the United States on a technical water management plan, signaling cooperation on cross-border water issues. The agreement addresses a sensitive area tied to treaty obligations and agricultural water supply and helps ease near-term political and trade friction related to water access and management between the two countries.
Barkin said the policy rate is now at the upper end of estimates for neutral, noting recent economic data have been encouraging on demand, employment, and inflation, but he remains concerned about risks on both jobs and inflation. He said it is still unclear when inflation will return to 2% and expects only gradual progress, with inflation remaining above target for now. On employment, he cautioned that a period of no job growth would be uncomfortable even if the unemployment rate stays low, though firms report demand is holding up and are not conducting layoffs at scale. Barkin said he is open to discussing changes to the Fed’s balance sheet or other operations and added that while he does not know Kevin Warsh well, he appears capable and charismatic.
The U.S. House of Representatives passed a government funding package today, ending the partial government shutdown. The vote occurred in the early afternoon, and the legislation now heads to President Donald Trump’s desk for signature. Passage clears near-term funding uncertainty and allows affected federal agencies to resume normal operations, removing a key source of political and market disruption.
ADM’s 2026 guidance highlights the gap between improving policy optics and near-term earnings reality. While soybean oil demand, biofuel policy under 45Z, and India trade alignment all point to a stronger medium-term outlook for crush, ADM is not yet underwriting a material, immediate expansion in margins, instead assuming flat year-over-year crush economics at the low end of guidance and only gradual improvement at the high end. This reinforces the idea that 2026 is a transition year: structural support for soybeans and soybean oil is building, but margin capture will be uneven and back-end loaded as new capacity comes online. For grains, it means downside risk is reduced by policy support, but upside in corn and soybeans is still likely to arrive incrementally rather than through a near-term step change in demand or pricing power.
Redbook data show U.S. retail sales remained strong through late January, with sales up 6.3% year over year for the first four weeks of the month and accelerating to a 6.7% gain in the week ending January 31. The consistency between the two readings suggests consumer spending momentum held firm rather than fading as the month progressed. While the figures are nominal and partly reflect higher prices, they still point to resilient demand at a time of elevated interest rates and tighter credit conditions. This reinforces the view that consumer spending continues to support overall economic growth and complicates the inflation outlook by reducing pressure on the Federal Reserve to ease policy in the near term.
U.S. farmer sentiment declined in January, according to the latest Purdue University Ag Economy Barometer, reflecting ongoing financial and policy pressures across the farm sector. The reading suggests producers remain cautious about the year ahead amid weak commodity prices relative to costs, tight margins, high interest rates, and continued uncertainty around biofuel policy, trade, and input expenses. While balance sheets in some areas remain solid, the drop in sentiment points to restrained capital spending intentions and a more defensive posture as farmers head into 2026 planning decisions, reinforcing the broader theme of cautious optimism at best rather than a confident recovery.
The IRS released a detailed proposed rulemaking for the Section 45Z Clean Fuel Production Credit that lays out how clean transportation fuels will qualify for tax credits beginning in 2025, including eligibility rules, lifecycle emissions calculations, feedstock requirements, and registration and certification standards. The proposal confirms that fuels must meet strict greenhouse gas intensity thresholds, be produced at qualified U.S. facilities, and generally rely on feedstocks grown or produced in the U.S., Mexico, or Canada, with explicit rules to prevent double counting and stacking with other energy credits. For agriculture, the document is critical because it directly shapes demand for corn, soybeans, oilseeds, animal fats, and manure-based feedstocks used in ethanol, renewable diesel, and sustainable aviation fuel, while clarifying how emissions models, indirect land use change treatment, and feedstock sourcing affect credit values. While the proposal moves the market closer to regulatory clarity, the length, complexity, and continued comment process underscore why uncertainty around 45Z implementation has weighed on biofuel investment decisions, crush margins, and earnings across the ag and processing sectors.
Hogs
Bought 400 Aug 106/104 put spread paid .70
Sold 2500 april 90 puts from .675 to .650
Bought 500 feb27 84/78 put spreads vs selling the 92 calls .030 cr
Sold 200 Oct 88/86 put spreads @ .70
Sold 150 June 102 puts @ 1.975 down to 1.95 covered 110.50
Sold 125 April 88/82 put spread @ .35
Bought 200 July 96/88 put spreads paid .60
Sold 350 May 90 puts @ .925 covered 100.65
Bought 350 Dec 86 puts paid 7.575 up to 7.60
Bought 300 Feb27 86 puts paid 6.80 up to6.875
Bought 150 March 94 puts paid 1.45
Bought 350 June 114 puts paid 3.4750 up to 3.525 covered 110.850
Bought 150 April 98/88 put spreads paid 2.450
Live Cattle
Sold 350 May 90 puts @ .925 covered 100.65
Bought 350 Dec 86 puts paid 7.575 up to 7.60
Bought 300 Feb27 86 puts paid 6.80 up to6.875
Bought 150 March 94 puts paid 1.45
Bought 300 April 220 puts paid .95
Bought 200 April 244 puts paid 3.15 up to 3.175
Sold 400 April 240 calls @ 4.7750 down to 4.7250
Bought 600 April 240/230 put spread v. 248 call paid .25 up to .375
Bought 500 April 242 calls paid 4.80 up to 4.90
Bought 400 Feb 239/236 put spreads paid .775
Sold 350 April 246 calls @ 3.025 down to 2.9750
Sold 150 March 241/236 put spread @ 1.675 down to 1.65
Bought 200 Feb 241 puts paid 1.85
Sold 200 June 208 puts @ 1.425 down to 1.30
Feeder Cattle
Sold 150 March 368/344 put spreads @ 1.85 down to 1.775
Sold 100 March 370 calls @ 6.55 down to 6.525
sources
news bloomberg
options data globex
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