AM Comments February 21 2025
Good morning. Happy Friday. As has been the case the past few mornings this week, corn and soybean futures are trading either side of unchanged so far to start Friday in what has been an uneventful night of trading. Corn futures don't have even a 2 cent trading range, while the soybean market has scored new highs for the week but also has a small range to this point. As we go into the weekend and next week, grain markets of corn and wheat will likely continue paying more attention to South America and the Black Sea region, while so long as trade talk with China is in the news, it will have the attention of the soy complex regardless of what is happening weather-wise south of the equator. Once the calendar flips to March, focus will then slowly begin shifting back to the north, as the US spring planting season will be dead ahead. Corn and soybean futures are both trading unchanged to a penny lower so far to start Friday, and the Chicago wheat market is up 4-5 cents. Products are mixed, soybean meal is up around 50 cents/ton, and soybean oil is down 30-35 points. Outside markets are mixed, crude oil futures are down around 60 cents/bbl, the Dow Jones index is down 240 points, and the US$ index is up 35 points. The S&P500 is unchanged and the NASDAQ is up 75 points. Gold futures are lower and have not made new contract highs.
Today's Reports: Weekly Export Sales; February Cattle on Feed
- This morning's weekly export sales report for the week ending February 13th is expected to show corn sales in a range of 900k-1.6 mil mt's, soybean sales in a range of 100k-500k mt's, and wheat sales in a range of 300k-600k mt's. Estimates for 2025-26 corn sales are seen between 0 and 200k mt's, and estimates for 2025/26 soybean sales are seen between 0 and 100k mt's.
- The weekly update from the Buenos Aires Grain Exchange, released yesterday, showed a 2% shift in soybean conditions from the poor to the excellent category and a similar 3% shift in corn conditions from the poor to the excellent category. The normal category remained unchanged in both crops, and there was also once again no production estimate updates made to either crop.
- The International Grains Council (IGC) on Thursday lowered their estimate of 2024/25 world corn production by 3 mil tons to 1.216 bil tons, mostly on reductions in South America. The group also lowered their estimate of 2024/25 soybean production by 2 mil tons to 418 mil tons, while wheat production was increased by 1 mil ton to 797 mil tons.
- Data from the EPA shows the US in January produced fewer renewable blending credits (RINs) than the month prior; roughly 1.25 billion ethanol credits were generated in the month (D6) compared to about 1.3 bil in December, while around 486 mil biodiesel credits (D4) were generated, compared to 906.8 mil the month prior.
- Staying along the same lines, the EPA on Thursday also showed production of renewable diesel in the month of January plummeted by more than 40% from the month prior, as blenders slowed production due to a lack of guidance on policy and tax credits. This was the biggest monthly drop in the last four years.
- The USDA's monthly livestock slaughter report, released on Thursday, showed combined red meat production in the US in the month of January at 4.89 bil lbs, which was up 2.5% from the December figure. Beef production in the month was up nearly 8% at 2.37 bil lbs, and pork production was up 7% at 2.5 bil lbs. Cattle slaughter in the month was down 0.5% from last year at 2.72 mil head, and hog slaughter was up 0.9% from last year at 11.467 mil head.
- Barge shipments down the Mississippi River in the week ending February 15th were seen at 671k tons, which was up nearly 8% from the week prior. Corn shipments were up 19% at 384k tons, and soybean shipments were up 6% at 272k tons. STL barge rates were down 16 cents on the week to $18.71/short ton.
- Rinse and repeat on South American weather on Thursday, with the bulk of Argentina remaining dry and showers in Brazil limited mostly to the north and to the west. Heaviest rains in the area were again off the coast of southern Brazil out into the open Atlantic.
- Forecasts into the weekend were little changed overnight, with southern/southeast Argentina still expected to pick up decent rains into the first part of next week, with an outright wet forecast still seen for the whole of the country into the first week of March. In Brazil, most of the country's growing regions see light/no precip chances through the weekend and first part of next week, while moisture is expected to creep back further to the south by the end of next week. The eastern half of the country will largely remain dry through at least the first week of March.
- The Midwest sees a quiet forecast for the weekend, with limited precip expected for the Corn Belt and surrounding areas. The PNW will be the wettest area in the country, with more heavy precip expected to start Sunday and run into next week. Temperatures are still expected to gradually warm over the next 72 hours, with Monday's highs forecast to be some 10-20 degrees F above average for most all of the country, with the warmest air centered in/around the Dakota's in the upper Midwest.
- Extended forecasts continue to zig and zag, which is keeping confidence in their output low; precip forecasts for the first week of March trended back drier today than was seen yesterday, while the temp outlook also shows more agreement on a return to cooler air for the eastern US than was seen yesterday. Models have kept the west warm in the extended period all week, which means if there is another cold air intrusion, it likely doesn't impact as large of area as the previous two outbreaks.
- Have a good weekend! As we mentioned earlier, be cautious of weekend headlines from Trump and his administration, as there are several skillets on the fire that could produce sharp reactions when the markets reopen on Sunday evening.