Written Commentary
OPENING COMMENTS
Ag Fundamentals:
Keep hitting the refresh button on your news sites as trading headlines has become the standard. The first round of tariff headlines have hit the market hard. Speculators that anticipated a head-fake from Trump lost as the corn market has aggressively sold off despite the weaker dollar and additional export sales to Mexico. The dollar is now below 104.75 on the index. The funds have aggressively sold corn length, nearing record high long liquidation week-over-week (around -90K contracts of corn, taking them closer to 300K length). Hope of a pivot and quick solution has come from comments made by the US Secretary of Commerce Howard Lutnick. Lutnick said late yesterday that the President was in constant contact with both Mexico and Canadian officials to regarding a possible agreement that would pull the 25% tariffs just applied yesterday. China sounds like they are not interested in negotiating and are prepared to “fight to the end” and ready for “any type of war” with the US following the 20% tariff added to trade. If China does focus their purchases toward South America, it may open new business between the US and other global players. April 2nd is the next established date to watch, that is when the reciprocating tariffs take effect on all trade with the US. There has been a substantial increase in corn call option open interest between yesterday and this morning. Aside from global trade pressure South America is buzzing along with both soybean harvest and 2nd corn crop planting.
The CFTC Commitment of Traders Report on Friday last week showed Managed Money cutting into their corn and bean length. In the last week of trade, the funds have sold a near record number of corn contracts week-over-week, comparable to March 2023.
Mato Grosso’s Soybean Harvest Progress if they remained on the 5-year average pace since late February should put them nearing 80% harvested.
Mato Grosso’s 2nd Corn Crop Planting Progress could have been delayed slightly by recent rains, but if they are near the 5-year average pace they should be close to 85-90% planted.
EXPORT & WORLD NEWS
Yesterday the USDA confirmed a couple sales of both corn and wheat. The US sold around 114K MT of corn to Mexico and 65K MT of wheat to South Korea.
Malaysian palm oil futures were up 68 ringgit overnight, now at 4417.
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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