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Wkly Futures Market Summary For 2.3.2025

SOYBEANS

The soybean market is not suffering as much damage as corn this morning following the implementation of import tariffs by the US administration. However, as opposed to corn, the soybean market opened the new trading month $0.44 below the late January high, and “speculative” long positioning in soybeans was much more balanced. On the other hand, managed money and the index traders held combined net longs of 207,000 contracts, while the small specs held a marginal net long of only 16,000 contracts.

SOYBEAN MEAL

Soymeal traders remain in a holding pattern, awaiting a more definitive response from Mexico, Canada, and China regarding the newly imposed tariffs. Trump and Mexico agreed to delay the implementation of tariffs until March 1 to allow for negotiations. The key question is whether these tariffs will extend long-term, or can be removed as quickly as they were implemented once specific requirements (such as immigration and fentanyl concerns) are addressed. The broader concern is whether the tariffs are part of a larger strategy to rebalance trade deficits or merely a temporary pressure tactic.

CORN

While weather issues in the Brazil mid-crop and the main Argentine crop areas remain concerning, significant chart damage from last Friday on top of a massively overbought spec condition leaves the corn market vulnerable to further corrective action. In a possible response to the US import tariffs, Chinese grain handler Sinograin indicated it will expand its domestic corn stockpiling by purchases of the 2024 harvest. Anecdotal reports of smaller than usual corncobs in portions of Argentina add to recent chatter of another reduction in that crop, with the latest Buenos Aires Grain Exchange estimate of 49 million tonnes potentially lowered again. The Buenos Aires Grain Exchange climatologist suggested the crop might only be 45 million tonnes, and could lose 5 million tonnes every week without rain this month.

WHEAT

While the bias in wheat to start the week is pointing down along with the rest of the grain complex and most physical commodities, the minimal speculative positioning in wheat should cushion prices against massive declines. According to the weather forecast, the US southern Plains will see well above normal temperatures and scattered showers late in the week, and there has been recent precipitation in the Midwest and Delta regions. Dormant winter wheat in the Eastern Black Sea region generally remains in poor condition, with the Ukraine/Russian growing areas being the driest of global wheat areas.

CATTLE

The cattle market sold off to finish last week, but the bullish fundamentals of tightening supplies remain in place. Friday’s cattle inventory report confirmed the lowest cattle herd since 1951. Cash cattle continued to be a bullish force as well. CFTC data showed a new record high in fund net longs as of Tuesday last week

HOGS

Hogs ended lower Friday, and the CFTC data showed little change in the managed money long position from the prior week. Cash and cutout prices were stronger Friday. The US dollar is higher this morning, and if hog prices continue to remain weak over the next several sessions, there is the possibility of a double top on the daily chart.

MILK CLASS III

March Class III milk finished on Friday with a moderate weekly gain after reaching a 2 1/2-week high earlier in the week.

ENERGIES

March Crude Oil is higher this morning but well off the overnight highs. The tariffs against Canada and Mexico are expected to impact US product prices more than crude oil. The Trump administration announced 25% duties on imports from Canada and Mexico, with an exception for Canadian oil imports, which will face a 10% duty. The tariffs are expected to go into effect tomorrow. Canada and Mexico together account for 25% of crude oil processed in the US. The US imports roughly 4 million barrels per day from Canada, 70% of which is refined in the Midwest. It also imports 450,000 bpd from Mexico, mainly for refiners concentrated around the US Gulf Coast.

The tariffs announced overnight are likely to have a more direct effect on the product markets as the US gets about 25% of its refinery feedstocks from Canada and Mexico.

March Natural Gas gapped higher overnight as the market reacted to the tariff announcements.

DOLLAR INDEX

The U.S. dollar index surged over 1.0% on Monday, approaching two-year highs after President Donald Trump imposed tariffs on key trading partners over the weekend.

COCOA

March Cocoa has found support after bouncing off a two-week low on Friday. Ivory Coast cocoa arrivals totaled 47,000 metric tons for the week ending February 2, down from 52,000 the previous week but up from 43,000 for the same period a year ago. The five-year average for the week is 57,700 tons.

COFFEE

March Coffee extend the rally overnight to trade to a new all-time high for the eighth straight session. Some analysts are saying Brazil’s coffee crop may not be as bad as some have feared, given the ample rain over the past couple of months, but that is not borne out by market action. The question remains whether the rains have come in time to do much good, as it is believed that the historic drought last year has deprived coffee trees of the energy needed to produce a strong crop.

COTTON

March Cotton was sharply lower overnight in the wake of the new tariff announcements on imports from Canada, Mexico, and China. The dollar is sharply higher this morning, which makes US cotton less competitive on the world market, and the stock markets are sharply lower, which is not supportive to cotton demand in general.  Traders are also concerned about retaliation from China and Mexico, which are both important buyers of US cotton. As of last week, China and Mexico were the fourth and fifth largest buyers of US cotton in terms of total commitments for the 2024/25 marketing year.

SUGAR

March Sugar is lower this morning but remains inside last Monday’s wide range. The market is consolidating its bounce off 22-month lows the previous week that came after US cane producing areas suffered extreme cold that threatened this year’s crop.

METALS

March gold futures advanced to record highs despite sharp gains in the U.S. dollar. Most of today’s strength in precious metals can be linked to flight to quality buying after the U.S. introduced 10% tariffs on China and 25% tariffs on Canada and Mexico, raising concerns about slower global economic growth.

March silver futures were lower in the overnight trade in response to the sharply higher U.S. dollar. However, there has been a recovery as the flight to quality influence has taken over.

March copper futures declined to their lowest point in more than three weeks.

EQUITIES

Stock index futures are lower on Monday after President Donald Trump imposed new tariffs on major trading partners over the weekend, ramping up concerns about the potential impact on the economy. The U.S. introduced a 25% tariff on goods from Mexico and Canada, alongside a 10% levy on imports from China.

INTEREST RATES

Futures are steady at the front of the yield curve and higher at mid-curve and at the long end of the yield curve.

Please contact us at 1.877.690.7303 or via email at sales@admis.com for any questions or comments on this report or would like more information about ADMIS research. 

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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.

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