Written Commentary
OPENING COMMENTS
GEOPOLITICS:
Russian and US officials met this morning for the first time since January of 2022 today to begin talks surrounding the end to the war in Ukraine. European leaders including Ukraine’s Zelensky met yesterday to discuss their possibilities and defensive needs moving forward.
MACROECONOMICS:
So far the US Department of Government Efficiency has accounted for $55 billion dollars saved. Most of the cuts so far (over $8 billion) were from the Department of Homeland Security and (over $6 billion) from the USAID. They have placed a $2 trillion savings goal for July 2026. This is relevant because it helps combat inflation.
AG FUNDAMENTALS:
The Funds took off some length in their corn (-32K contracts) and Soybeans (-29K contracts), but cover some of their wheat shorts. The funds are still extremely long corn with both domestic demand and export participation giving corn support. Although it will not be long before we hear the planting intentions for the next US corn crop, possibly above 93 million acres. The soybean harvest underway in Brazil (25% harvested) along with the the recent board rally pulling another 10-15% from the US farmer’s bins has put pressure on bean values. AS of Friday, the US farmer is now 70-75% sold on their corn and bean positions. Negotiations between the US, Russia, and China will start to take shape and US crop values are in the balance. The US dollar is around 107.0 on the index this morning, weaker than last week’s start. the Russian Ruble, Canadian Dollar, and the peso all stronger against the dollar. Gold and assets like bitcoin are in high demand as uncertainty surrounds global relationships.
The CFTC Commitment of Traders Disaggregated with highlighted changes to the managed money positions.
Minimum Temperatures on Thursday 2/20/25 threatens the wheat belt and may increase winter kill in the dormant wheat crop.
EXPORT & WORLD NEWS
South Korea is thought have purchased 60K MT of soybean meal on Friday, likely sourced form the United States.
Malaysian palm oil futures were down 38 ringgit overnight, at 4504.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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