Written Commentary
CORN
Prices were $.01-$.04 lower today. Spreads were mixed as Mch/May dipped to a new low at $.15 ½ ahead of tomorrow’s FND for the Mch-25 contract. May-25 was not been able to hold trade back up to the $5.00 level. At midday Pres. Trump announced tariffs on imports from Canada and Mexico will go into effect April 2nd, pushed back from early March extending the opportunity to strike a trade deal. Trump also stated he would be announcing tariffs on the EU very soon. Ethanol production slipped to 318 mil. gallons, down from 319 mil. the previous week while up 1% from YA. Production was at the high end of expectations. There was 108 mil. bu. used in the production process, or 15.5 mil. bu. per day, above the 14.83 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 2.667 bil. bu. used, or 15.3 mbd, an annualized pace of 5.594 bil. Implied gasoline demand rose 2.6% LW to 8.454 tbd, however slightly below YA at 8.467 tbd. A Reuters poll shows analysts expected corn acres will expand 3 mil. in 2025 to 93.6 mil. with production reaching 15.4 bil. Ending stocks are expected to rise to just over 1.9 bil. bu. Export sales tomorrow are expected to range between 35-65 mil. bu.
SOYBEANS
Prices turned lower across the complex with beans down $.06-$.08, meal was down less than $1 while oil was 45-50 lower. Spreads were mixed as nearby meal spreads traded to new lows. May-25 beans held above yesterday’s low and another test of its 50 day MA support. May-25 meal was back consolidating just above $300 ton. May-25 oil plunged to a new low for the month before recovering. Spot board crush margins were little changed at $1.15 ½ per bu. while bean oil PV fell back to 3 week low at 3.4%. Waves of rain are forecast to move across the central and southern growing regions of Argentina thru the first week of March. While most areas will benefit, some isolated flooding may occur. Northern crop areas will see little moisture as crop stress will be on the rise. Center south thru NE growing regions of Brazil will likely remain in a dryer than normal pattern thru early March causing stress for the late maturing soybeans and first crop corn. Wetter conditions in Mato Grosso will slow the remaining soy harvest and 2nd crop corn plantings, however following the big strides made in recent weeks, the moisture should prove beneficial longer term for corn development. On Friday the monthly Biofuel Capacity, Production and Feedstocks usage update from the EIA for the month of Dec-24 comes out. The pushing back of tariffs with Canada enabled canola prices to rebound while weighing on bean oil prices. The Reuters poll expect bean acres will fall 2.7 mil. from 2024 to 84.4 mil., while production and stocks are expected to be little changed from 2024. In fact the 25/26 endings stocks est. at 380 mil. exactly matches the current USDA forecast for the 24/25 MY. Final ending stocks have been below the USDA est. in the Feb Outlook 10 of the past 15 year. Export sales are expected to range from 8-22 mil. bu. of beans, 200-500k tons of meal and 0-25k tons of oil.
WHEAT
Prices were $.07-$.13 lower across all 3 classes today as MGEX was the downside leader triggered by the pushback of Canadian tariffs. The May-25 contracts fell to fresh 3 week lows for all classes as well. Nearby spreads in KC futures hit new lows. Talk that China cancelled another 3-4 cargoes of wheat imports from Argentina also weighed on valuations. This is on top of the 9-10 cargoes cancelled from Australia last month. Nearly a year ago China was busy cancelling US SRW purchases. In the US little moisture over the next week for the WCB and southern plains. Precipitation will largely be confined to the Great lakes region and ECB. Heavy rains are expected for the southern Midwest and Ohio valley early thru the middle part of next week. The Reuters poll shows wheat stocks are expected to jump roughly 35 mil. bu. in the 25/26 MY to 830 mil. Wheat stocks have ended above the Feb. outlook forecast 10 of the past 15 years. Ukrainian Pres. Zelensky acknowledged reaching a “framework agreement” with the Trump Administration over mineral resources, however details of the agreement still need to be finalized.
Charts provided by QST.
>>See more market commentary here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
