Govt Shutdown Risk, Farm Aid Delays?? + Winter Storm + E15

Joe's Premium Subscription

Apple Podcasts

Welcome back. In today’s update, we’re covering rising government shutdown risk, potential impacts on farm aid payments, a major winter storm across the Plains, strength in grain markets, backlash over E15, strong export sales, fund positioning, and the latest Cattle on Feed data.

🏛️ Government Shutdown Risk

The risk of a partial government shutdown is rising as the Senate prepares to vote later this week on a House-passed $1.2 trillion funding package. Following another fatal shooting involving federal immigration agents in Minnesota, Democratic lawmakers are threatening to oppose the bill due to DHS and ICE funding concerns. Democrats argue the package lacks reforms to rein in ICE.

While funding for many other agencies is included, there may still be enough Democratic support to avoid a shutdown. The last shutdown lasted 43 days and delayed key USDA and CFTC reports. Polymarket odds of a shutdown jumped sharply over the weekend. There is growing concern that previously approved FBA payments, currently slated for late February, could be delayed if a shutdown occurs.

See chart below.

❄️ Winter Storm & Cold Impacts

This weekend’s winter storm delivered widespread snow and extreme cold across the Plains. Parts of HRW wheat country in the Southern Plains received beneficial snowfall, reducing winterkill risk. However, below-zero temperatures combined with snow created severe cold stress for livestock, limiting weight gains and increasing risks for producers in calving season.

Wind chills in the Northern Plains plunged to extreme levels, while portions of Texas and Oklahoma face record lows with freezing temperatures expected to persist. Single-digit temperatures may linger another day or two in HRW wheat areas, while SRW wheat country in the Midwest remains locked in frigid conditions this week.

See 72-hour snowfall map below.

🌽 Grain Markets

Corn futures advanced on Friday, led by strong export demand. The most active March contract settled higher, supported by near-record export sales and competitive U.S. prices on the global market. Growing concern over dry conditions in parts of South America has added uncertainty around crop potential. Soybean and wheat futures also posted gains.

See charts below.

⛽ E15 Left Out (Again)

Farm groups and ethanol advocates are pushing back after Congress once again omitted year-round E15 sales from the funding package. Instead, lawmakers plan to form an E15 Rural Domestic Energy Council to study the issue.

The Iowa Corn Growers Association criticized the move as “kicking the can down the road,” while the National Corn Growers Association argued lawmakers are sidelining corn growers in favor of refinery interests.

See comments from Reuters’ Jarrett Renshaw below.

🚢 Export Sales

U.S. export sales were impressive last week:

Corn sales set a marketing-year high, far exceeding expectations, with unknown destinations as the top buyer

Soybean sales also hit a marketing-year high, with China leading purchases

Wheat sales surpassed expectations, with unknown destinations again the largest buyer

Overall, export demand remains a major source of support for the grain markets.

See charts below.

📊 CFTC Fund Positioning

In the latest Commitment of Traders report, large money managers were net sellers across corn, soybeans, and SRW wheat. The net short position in corn is now the largest since late October, reflecting continued bearish positioning despite recent market strength.

See Fund Tracker charts below.

🐄 Cattle on Feed

Friday’s Cattle on Feed report came in largely neutral. Cattle on feed were below last year but slightly above expectations. Placements and marketings were both near or above pre-report estimates.

Notably, heifers made up a large share of cattle on feed, signaling that many are still being fed rather than retained for herd rebuilding — an important long-term signal for the cattle market.

See graphics below.