AM Comments February 24 2025

Posted on Feb 24 at 07:31

Good morning. Futures markets in Chicago are mostly lower to start the last full week of February trading, as further incendiary rhetoric towards China over the weekend out of the Trump administration has caused further downward pressure to start Monday. As we've mentioned numerous times over the past month since Trump has retaken office, the only certainty regarding the tariffs is that Trump will not hesitate to go after anyone if he feels their trading relationship with the US is unfair; but who that target might be on day-to-day basis is nearly impossible to predict. Otherwise, the USDA's Ag Outlook Forum at the end of this week will be front and center in the ag space, with attention ever so slowly beginning to shift back north of the equator. Corn futures are trading 3-5 cents lower to start the week, soybean futures are trading 2-3 cents lower, and the Chicago wheat market is down 9-10 cents. Products are mixed, soybean meal is up 50 cents/ton, and soybean oil is down 50-60 points. Outside markets are mixed also, crude oil futures are down 10-15 cents/bbl, the Dow Jones index is up 260 points, and the US$ index is near unchanged. The S&P500 is up 25 points and the NASDAQ is up 100 points. Of note, crude oil futures gapped to new lows for 2025 overnight, and the $ index traded to its lowest level since early December. Quiet trade to start the week in gold and coffee.

 

Today's Reports: Weekly Export Inspections

 

• CFTC data released Friday afternoon for the week ending February 18th showed managed money traders in the week were buyers of 21,144 contracts of corn (now net-long 353,533 contracts), sellers of 11,950 contracts of soybeans (now net-long 16,526 contracts), and buyers of 21,232 contracts of Chicago wheat (now net-short 61,577 contracts). This was the largest week of net fund buying in Chicago wheat since April of last year.

 

• In soy products, managed money traders were sellers of 9,762 contracts of soybean meal and buyers of 6,912 contracts of soybean oil. This makes them now net-short 56,993 contracts of soybean meal, and net-long 53,472 contracts of soybean oil.

 

• Also out Friday afternoon was the USDA's Cattle on Feed report for February, which was nearly exactly as the trade had expected. The US feedlot herd as of February 1 was seen at 11.716 mil head, or 99% of last year. Placements in January totaled 1.822 mil head, or 102% of last year, and marketings in the month totaled 1.869 mil head, or 101% of last year. To view the full report, please click here.

 

• Farmers in Brazil have continued to make notable progress on soybean harvest and safrinha corn planting over the past week; Coanb will release nation-wide numbers this evening, which we will share tomorrow morning, but IMEA on Friday showed top producing state Mato Grosso at 66.2% complete on soybean harvest, which is now ahead of the five-year average of 65.6%, but still behind last year's 76.4% progress as of the same date. Safrinha corn planting in the state is seen at 67.2% complete, compared to 80.4% last year and the five-year average of 70.3%.

 

• Further south in Argentina, officials from the Rosario Stock Exchange say that rains over the past 2-3 weeks have caused a "better than expected" stabilization of yields, especially for the soybean crop. Sources estimate that instead of the 40-50% production loss that was expected, now losses will maybe only be in the 20-30% ballpark. However, they also add that there will be significant yield variance (possibly 15-20 qq/ha) throughout the crop.

 

• President Trump's EPA announced that they would be holding to an April 28th deadline for implementation of new guidelines that would effectively put E10 ethanol blends on the same regulatory footing as E15 in as many as eight states in the Midwest, in a shift that was started early last year under the Biden administration. Administrator Lee Zeldin said in a statement that the EPA would also be considering granting one-year delays for states seeking additional compliance time.

 

• In what seems like response to new fees on Chinese-built vessels entering US ports that were by announced the Trump admin. over the weekend, China's government issued a new guideline document on Sunday titled "No. 1 Central Document", which outlines plans to boost rural financing and increase income in the country's farm sector; the plan describes the use of monetary policy tools such as re-lending and rediscounting, to promote financing for rural revitalization. The plan also mentions improved policies on corn and soybean subsidies.

 

• US federally inspected beef production in the week ending February 22nd was 491 mil lbs according to the USDA, which was up just 0.4% from the week prior. Pork production in the week was seen at 552 mil lbs, up just 0.1% on the week. YTD beef production is down 3.6% so far in 2025, while pork production is down 5.2%.

 

• 72 hour satellite data shows weekend rainfall in Argentina was limited in the north, but plentiful in the south, where growing regions south of Buenos Aires picked up anywhere from 0.1" to 4+", with the heaviest totals favoring the southeast. Rainfall was also decent through west-central Brazil, which likely caused a few days of harvest delays; totals here were seen in a range of 0.5-2.5" generally speaking.

 

• Forecasts for this week show mostly a continuation of this weekend pattern for the first couple days early in the week, with rains in Argentina continuing to favor areas to the south, before moisture becomes more widespread in the north through the end of this week and into next week. Rainfall in Brazil will be similar to the last 10-15 days, with there being a fairly stark dividing line between the wetter west/northwest and the drier east/southeast. Extended forecasts are non-threatening as well, with continued dryness seen for most of Brazil's ag belt, and continued moisture for that of Argentina.

 

• Temperature anomaly forecasts for the next week show southern Argentina transitioning to a cooler pattern, while areas in the north and into southern Brazil look to stay on the warm side. The warmest temps will be in far southern Brazil, mostly south of the main growing regions in the country.

 

• Forecasts for the US this week will see spring-like warmth as the main feature, with temps some 20+ degrees F above average across the central part of the country multiple times between now and net Monday. Precip looks to be mostly limited to the PNW, where an active pattern is expected to continue, while the upper Great Lakes area and into the northeast also sees moisture potential towards the end of the week. Week two maps coming out of the weekend show near-average temps for most of the Midwest, with above average precip potential.