AM Comments February 18 2025
Good morning. Ag markets are mixed/quiet at the CBOT coming out of the long three-day holiday weekend, with corn and soybeans trading either side of unchanged and the wheat market so far trading inside of the range made on Friday. NOPA will be out later this morning with fresh soybean crush data for the month of January and we'll get an updated monthly cattle on feed update the end of this week on Friday, but otherwise, market-specific data in the US looks to be largely on the quiet side this week, with macroeconomic and global geopolitical happenings continuing to presumably dominate most of the trade action. Weather in South America will also remain a factor, as improving conditions over the past 7-10 days in Argentina have stabilized crops to some extent, and a drier forecast in Brazil has allowed soybean harvest to get caught up closer to average. Corn futures to start Tuesday trade are unchanged to a penny higher, soybean futures are 1-2 cents lower, and the Chicago wheat market is down 4-5 cents. Products are mixed, soybean meal is up around 50 cents/ton, and soybean oil is down 5-10 points. Outside markets are mostly higher, crude oil futures are up 40-50 cents/bbl, the Dow Jones index is up 80 points and the US$ index is up 30 points. The S&P500 is up 20 points and the NASDAQ is up 90 points. Gold futures are up $30/oz and coffee futures are down 5-10 cents/lb; neither have made new contract highs so far to start the new week.
Today's Reports: Weekly Export Inspections; NOPA Monthly Soybean Crush
- CFTC data from last week showed managed money traders were sellers of both corn and soybeans for the first time since the middle of December in the week ending February 11th; funds are now net-long 332,389 contracts of corn (-31,827 on the week), net-long 28,475 contracts of soybeans (-28,554), and net-short 82,809 contracts of Chicago wheat (+7,633). Funds were also sellers of 13,771 contracts of soybean meal in the week (net-short 47,232) and buyers of 4,344 contracts of soybean oil (net-long 46,560).
- Of note on the funds, this was the largest week of selling in corn since the week of October 15th last year, and the largest week of selling in soybeans since the week of July 9th last year.
- Trade news over the weekend included reports that the EU was threatening to impose trade restrictions on imports of US soybeans and other food products in what was seen as a response to Trump's reciprocal tariffs, and also headlines that major shipping companies such as Hapag-Lloyd were arguing against the use of crop-based biofuels due to them being more environmentally damaging because of deforestation and other land-use impacts than traditional fuels.
- Weekly crop progress from Brazil's Conab showed soybean harvest pace in the country at 29.4% as of Monday the 17th, up just 4% on the week; second crop corn planting was seen at 45.3% complete as of the same day, up nearly 10%. In top producing state Mato Grosso, soybean harvest as of Friday the 14th was estimated at 50.1% complete, compared to 65.1% last year and the five year average of 53.2%.
- According to the USDA, federally inspected beef production in the week ending February 15th was seen at 489 mil lbs, down 4.2% from last week; pork production in the week was unchanged at 554 mil lbs. For the year so far, beef production is down 4.1% from last year and pork production is down 5.6%.
- US and Russian officials met in Saudi Arabia on Tuesday to further discuss an end to the war in Ukraine; notably, there were no representatives from Kyiv or any other European nations present, though President Trump has vowed repeatedly that Ukraine would have a seat at the negotiating table when it came to ending the war. Most notable out of the meeting were new demands by Russia that a 2008 NATO membership promise to Ukraine be formally disavowed.
- Rains in Argentina over the three-day weekend were generally better than expected, with a strip through the northern part of the country receiving 5+"; areas further to the south, which make up more ag production, picked up 0.5-1.5" generally speaking. The heavy rains stretched over into southern Brazil also, while south-central Brazil saw just scattered precip and Brazil's northern growing areas saw a similar 0.5-1.5" with some heavier spots.
- Forecasts over the next week show rains continuing to impact the wettest areas of northern Argentina and southern Brazil over the next few days, while the bulk of the growing regions in each country will be mostly dry. Week-two forecasts show a return of light precip for southern Argentina into the opening days of March, while a good stretch of central Brazil stays dry, which will further aid soybean harvest. Heat will continue to be an issue in places, with forecasts trending warmer for the bulk of Argentina over the last three days.
- 72 hour snowfall data for the US shows a bulk of the country picked up measurable accumulation over the three day weekend, with places at elevation around the Rocky Mountains picking up more than 18", while the northeast also saw a fairly widespread area pick up 10-20" on the downwind side of the Great Lakes. Parts of E NE/W IA, along with areas in WI and MI, saw the heaviest Midwest totals of 8-14" generally speaking. In the southeast, flooding has been an issue in parts of KY/TN, where rainfall amounts are approaching 10" going back to the end of last week.
- Forecasts for this week show another snow event favoring the southern tier of the Midwest and into the mid-south tonight and into tomorrow, while further precip is expected to continue to falling in the northwest; the northern/northwest part of the Corn Belt appears to stay mostly dry for a few days. Temperatures will be the main focus though, with highs expected to be some 20-40 (!) degrees F below average for a wide majority of the eastern half of the US through the week this week, stretching as far south as the Gulf. Once this cold spell passes though, there is good model agreement into the end of the month of a return to warmer temps.