AM Comments February 27 2025

Posted on Feb 27 at 06:59

Good morning. Initial new crop numbers from the USDA's annual Ag Outlook Forum this morning did not produce a lot of excitement upon their release, as figures were largely as the trade had anticipated. As such, corn and wheat futures have again lightly resumed their downward slide, while soybeans have spent the majority of the overnight session trading in the green. Traders will debate the new crop balance sheets over the course of the rest of this week, but as there wasn't anything overly Earth-shattering in the data, we assume trade/policy discussions and weather/crop production in South America will again quickly return to the centers attention in the ag space beyond the weekend. Corn futures this morning are trading either side of unchanged, soybean futures are 5-7 cents higher, and the Chicago wheat market is down 4-6 cents. Products are quiet/higher, soybean meal is up around $1.50/ton, and soybean oil is up 10-20 points. Outside markets are higher, crude oil futures are up 70-80 cents/bbl, the Dow Jones index is up 120 points, and the US$ index is up 20-25 points. The S&P500 is up 40 points and the NASDAQ is up 170 points. Gold futures are $30-40/oz lower.

Today's Reports: Weekly Export Sales; Monthly Durable Goods Orders; Weekly Jobless Claims; 2nd Est. Q4 GDP

 

• The USDA this morning estimated corn planted acres in the coming season at 94.0 million, estimated soybean acres at 84.0 million, and estimated wheat acres at 47.0 million. The corn and wheat figures were marginally larger than the trade expected, while the soybean figure was marginally smaller. On production, corn production is seen at a record 15.585 billion bu's, while soybean production is seen at 4.370 billion bu's.

 

• Of note on the balance sheets: for corn, USDA left ethanol use unchanged from 2024/25, but raised feed and residual by 125 mil bu's and cut exports by 50 mil bu's. Ending stocks were seen at 1.965 bil bu's. For soybeans, USDA raised crush by 65 mil bu's and also raised exports by 40 mil bu's, which lowered ending stocks to 320 mil bu's. To view the full report from the USDA, please click here.

 

• This morning's weekly export sales report for the week ending February 20th is expected to show corn sales in the week in a range of 900k-1.65 mil mt's, soybean sales in a range of 200k-600k mt's, and wheat sales in a range of 300k-600k mt's. 2025/26 corn and wheat sales are each forecast between 0-100k mt's, and 2025/26 soybean sales are seen between 0-50k mt's.

 

• Traders expressed confusion yesterday over Trump's comments on tariffs during his first cabinet meeting of his new term; the President initially seemed to indicate that the proposed tariffs were on schedule, only to later say that there would be a delay until April 2nd. While the White House offered no clarification overnight, we see it likely that further clarification will be given sometime before the weekend.

 

• The USDA released its monthly Cold Storage report yesterday for the month of January; the report showed total US red meat supplies in freezers at just under 894 mil lbs, which was up 2.6% from December but down 5.8% from January 2024. Pork supplies at 410 mil lbs were up 3.5% on the month but down 11.5% on the year, and beef supplies at 463 mil lbs were up 2.2% on the month but down 0.3% on the year.

 

• Reuters reported yesterday that Argentina's main oilseed union, SOEA, is threatening a national strike at soy processing plants in the country over a salary dispute; the union says that global logistics firm Vicentin has failed to pay its workers February wages following a court ruling earlier this month that found agreements between the company and its lenders unconstitutional.

 

• Ukraine's Deputy Ag Minister on Thursday told reporters that soybean seeded area in the 2025 season could possibly be down by 10-15% and sunflower area could be down by as much as 5%, as farmers are planning to plant more corn area instead. No reason was given for the switch, but the Minister added that other winter crops were in mostly good shape despite a recent period of sub-zero temps due to adequate snow cover.

 

• Democratic Senator Cory Booker on Wednesday called for accountability from new Ag Secretary Brooke Rollins should stalled farm payments not be released in the near future; speaking to a panel hearing on the farm economy, Booker said the Secretary should be called to explain why the payments hadn't gone out, adding that farmers who invested in conservation practices with expectations of government reimbursement were now in immediate crisis situations.

 

• Strength in the NASDAQ yesterday afternoon and this morning is likely largely a result of a 'good but not great' earnings report from tech behemoth Nvidia; the company reported quarterly sales of roughly $43 billion (+78%), which was slightly above estimates, but added that gross profit margins would likely be tighter than expected due to the implementation of a new chip design.

 

• White House news for Thursday includes meetings between US and Russian officials in Istanbul, Turkey over the war in Ukraine, and also a meeting between Trump and British Prime Minister Keir Starmer in Washington later this afternoon, where the war is also expected to be one of the main topics of conversation.

 

• Good rains continued falling in Argentina on Wednesday, with satellite data showing a wide area of 0.5-3" through the country's southern ag belt; these rains also stretched into southern Brazil, while northern Brazil remained wet in the west and dry in the east. Forecasts into next week continue to show a continuation of this pattern for the next several days, while on the temp side, the most extreme heat will largely be centered on Uruguay and southern Brazil, though northern Argentina and the eastern half of Brazil will also remain above average.

 

• US forecasts added a bit of moisture to the system expected at mid-week next week, but were otherwise also relatively unchanged from Wednesday's runs; the EU now sees the possibility at an inch of rainfall for the upper Midwest through IA and into WI, along with still showing similar potential further south along the Gulf. In the meantime though, things look to be mostly dry through the weekend and into the first part of next week.

 

• Temperature forecasts this morning have put some cooler air in place for the West Coast both in the 5-10 day and 10-15 day periods, but still show no signs of trending back cooler in the east. In fact, the EU AI model output now shows a return to temps that are some 20+ degrees F above average for a wide chunk of the east-central US March 9th-14th, which is warmer than was offered yesterday.