Written Commentary
Grains ended lower. US stocks were lower. US Dollar was lower. Crude was lower. Gold was higher. All markets reacting to US tariffs against Canada, Mexico and China and their retaliation.
CORN
Prices were steady to $.04 higher by old crop as nearby contracts ended a streak of 8 consecutive lower closes. Spreads were steady to firmer. The 100 day MA, at $4.63 ¼ for the May-25 contract, now serves as resistance. Strength was largely attributed to comments from US Commerce Sec. Lutnick who late yesterday stated the import tariffs on products from Mexico and Canada could quickly be “rolled back”. So far the only rollback is the Trump Administration considering a 1 month delay for tariffs on automobile’s. Headline to headline trading continues. Ethanol production rebounded to 1,093 tbd, or 321 mil. gallons, up from 318 mil. the previous week while up 3.4% from YA. Production was above expectations. There was 109 mil. bu. used in the production process, or 15.64 mil. bu. per day, above the 14.9 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 2.758 bil. bu. used, or 15.24 mbd, an annualized pace of 5.562 bil. Ethanol stocks slipped to 27.3 mil. barrels, in line with expectations. Implied gasoline demand rose 5% LW to 8.877 mil. barrels per day, however still down 1.5% YOY. The Chinese Govt. raised their grain production target by 2030 to 745 mmt, up from YA record of 706.5 mmt. Export sales tomorrow are expected to range from 28-40 mil. bu.
SOYBEANS
Prices were higher across the complex with beans up $.06-$.13 led by old crop, meal surged $5-$7 while oil was up 15-20 points. Spreads across the complex are firmer. For now May-25 has rejected trade below $10 while ending a run of 5 consecutive lower closes. Next major resistance is the 100 day MA at $10.29 ½. Spot FOB prices between US and Brazilian soybeans continues to narrow, down to $.45 for April offers, well off the $1.00+ per bu. in late Jan-25. Healthy rains will continue to impact central and southern Argentina thru Saturday before a much needed drying pattern for week 2 of the outlook. Some rains will likely shift into NE Argentina by early next week bringing only modest relief from heat/drought stress. Dryness in EC and NE growing areas of Brazil is forecast to continue for another week with improved prospects for rain in week 2. A good mix of rain and sunshine for southern and WC growing areas of Brazil. After today’s Celeres lowered their Brazilian bean production forecast 2.4 mmt to 171.6 mmt, still just above the Feb USDA est. of 169 mmt. May-25 oil plunged to a 2 month low however held just above the $.42 level before recovering. Bean oil ended a run of 8 consecutive lower closes. Early pressure was likely being felt from sharply lower energy prices. After holding support just above the contract low yesterday, May-25 meal recovered back to the $300 level. Spot board crush margins rebounded $.03 ½ to $1.13 ½ bu. with bean oil PV slipping to 42%. The CME Group has announced they will launch a soybean oil share contract that pending regulatory approval will start trading as early as Mch 31st. The Chinese Govt. raised their budget for grain and vegoil stockpiling by 6%. Tomorrow’s export sales are expected to range from 12-20 mil. bu. for soybeans, 150-400k tons of meal and 20-45k tons of oil.
WHEAT
Futures held gains of $.08-$.12 into the close across all 3 classes, however remained within yesterday’s range. The higher closes ended 7 consecutive lower closes in CGO and KC, and 10 consecutive lower closes for May-25 MGEX. New contracts lows were scored across all 3 classes yesterday. Next major support for spot CGO futures is $4.93 ½, the low from last Aug-24 on the weekly bar chart. The Aug-24 low for spot KC is $5.12 and $5.37 ½ for spot MGEX. A major winter storm continues to pull across the nation’s midsection bringing heavy rains to the central Midwest yesterday. Snow on the back end of the system brought some heavy accumulations in central IA and SE MN. As the system pulls east over the next 24-36 hours, rain may turn to snow with sharply cooler temperatures and extremely high winds. The northern plains remain in a net drying pattern. Russia’s Ag. Ministry indicates they plan on expanding 2025 crop area to 84 mil. hectares, up 1 mil. from YA. They went on to report 55.8 mil. hectares have already been planted with winter crops adding that 87% of these areas were in good or satisfactory condition. The recent speculative selling in CGO futures has likely driven the speculative short position back out to 95k contracts, up from only 61k 2 weeks ago. Export sales are expected to range from 8-16 mil. bu.
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