BQC Afternoon Comments Mar 26.2025

Geopolitics: The USTR is conducting a second day of hearings regarding Trump’s plan to impose fees on Chinese owned vessels. Many reject the proposal due to the inability of US steelworkers to build ships in time before the business cost repercussions to hit the export/import markets. Trump also mentioned today that next week’s April 2nd tariffs will not be as bad as previously implied. His words were tariffs will “probably be more lenient than reciprocal”. The Black Sea ceasefire is still at mid court without a clear sense of momentum. Russian officials would like to see their state bank reconnected to the SWIFT international payment system. Russia also stated early this morning that Ukraine was still attacking Russian energy sites. 

Ag Fundamentals: Corn acres set to increase nearly 4 million acres, pulling from mostly soybean and cotton acres, but also contributed to by wheat, oats, rice and milo acres. An extra 4 million acres at an average yield of 175 bu/acre would be an additional 700M bushels of corn. If the growing season allows for a trend-line yield the US has the potential to grow a record corn crop. Ethanol production was down -52K barrels per day from the previous week and penciled an 8-week low production at 1.053 M barrels per day. Despite the low production, stocks increased. Canada may be putting less ethanol imports on the books due to the trade war, and overall fuel demand is contracting alongside the US economy. Crude oil inventories were 3.3M barrels lower last week which was 4.8M barrels less than estimated. We are still waiting to hear what announcement Brooke Rollins has in store for us. 

Weather: Southeast Texas, Louisiana, and Mississippi will receive rain between now and the weekend, followed by a shot of precip in Minnesota and Wisconsin by Sunday and then multiple showers are expected to cover the Ohio River Valley Monday-Friday next week. The precipitation in MN and WI over the weekend will be mostly in the form of snow. Soil moisture in the upper and lower wheat belt have built up dryness in the last couple months, some of these systems will help shrink those areas down. Rain in South America is both helping kick-start the 2nd corn crop’s growing season and also causing delays in soybean harvest.