AM Comments February 28 2025

Posted on Feb 28 at 07:39

Good morning. Happy Friday. CBOT markets are seeing a bit of a dead cat bounce this morning following the lashing of the last few days, with the wheat market once again being seen at the front of the line. Despite market-specific data from the USDA that was at least somewhat important to traders yesterday, it remains politics and trade that have continued to drive values this week, with all eyes on Tuesday's tariff deadline amid the confusion that has been created by conflicting reports the last few days. Remember, it is the retaliation by our trading partners that will potentially be fundamentally negative to ag prices, not Trump's tariffs on their goods; Canada largely excluded US ag on its first proposed counter list a month ago and Mexico simply cannot source all of its domestic corn needs from outside the US, meaning it will be interesting to see what kind of response is seen assuming the US duties take effect on Tuesday. Corn futures to start Friday are unchanged to a penny higher, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is up 6-7 cents. Products are higher, soybean meal is up around 50 cents/ton, and soybean oil is up 10 points. Outside markets are mixed, crude oil futures are down 80-90 cents/bbl, the Dow Jones index is up 180 points, and the US$ index is up 5 points. The S&P500 is up 10 points and the NASDAQ is down 20 points. Gold is down another $20/oz.

 

Today's Reports: Monthly PCE Price Index; CFTC Commitment of Traders

 

  • The CME Group this morning reported that there were 641 contracts of March soybean meal assigned for delivery yesterday, along with 792 contracts of soybean oil, 314 contracts of KC wheat, 466 contracts of Chicago wheat, and 71 contracts of oats. There were no deliveries of corn or soybeans on day 1 of the period.

 

  • Won't continue to beat the horse on the USDA numbers from yesterday, but if you happened to miss the full report or want to look further into it this weekend, you can find all the numbers by clicking here. Like we mentioned previously, the USDA has to start somewhere and we caution against taking what was released yesterday as gospel; there are a lot of variables between now and fall that will impact the final balance sheets.

 

  • The USDA on Monday next week will release monthly corn and soybean crush data in the Fats & Oils and Grain Crushings reports; traders expect to see soybean crush in January at 210.9 mil bu, which would be up a little more than 8% from last year, while bean oil stocks are seen falling more than 13% from last year to 1.757 bil lbs. Corn used for ethanol is seen at 465.8 mil bu, which would be up a little less than 6%.

 

  • According to data from StatsCan released yesterday, Canada crushed 1.011 mmt's of canola in the month of January, which is up almost 8% from the same month last year. Oil production was seen at 424k tons, while meal output was seen at 591k tons, which are both also up from January 2024. Crush for the full marketing year, which started August 1, has reached 5.93 mmt's, which is up 7.5% from the previous season.

 

  • The weekly crop progress report from the Buenos Aires Grain Exchange in Argentina yesterday showed the amount of the soybean crop in the normal/excellent category at 67%, up just 1% from the week prior. Corn similarly improved from 70% to 71% in the same category. The group also noted that corn harvest in the country had reached 5.4% complete, which is well ahead of both last year and the five year average, and appears to be the fastest start in the last 10 years. Production was held steady at 49.0 mmt's for corn and 49.6 mmt's for soybeans.

 

  • FranceAgriMer, in their weekly crop progress report, showed 73% of the country's soft wheat crop was rated good or very good as of Monday the 24th, which was down 1% from the week prior but still up 5% compared to last year. Barley conditions were unchanged on the week at 69% good or very good, while durum wheat also declined 1% on the week to 82%.

 

  • According to the USDA, barge shipments down the Mississippi River in the week ending February 22nd totaled 410k tons, which was down nearly 40% from the week prior; corn shipments were down 41% at 227k tons, and soybean shipments were down 38% at 168k tons. STL barge freight rates were down 28 cents/short ton for the week at $18.43/short ton.

 

  • The latest headlines out of the White House have 25% tariffs on goods coming from Canada and Mexico going into effect Tuesday, March 4th, along with an extra 10% duty on imports from China. Trump also said in a post on Truth Social that reciprocal tariffs were still planned for April 2nd. The President remains unhappy with the flow of illegal drugs coming into the US, and said that until it stops or progress is made, the tariffs will remain in effect. Other White House news for Friday includes a scheduled 10am central time meeting between Trump and Ukrainian President Zelensky in Washington.

 

  • Rainfall was a little more spotty through Argentina on Thursday, with a small area north of Cordoba being really the only area the picked up measurable precip. Southern Brazil also saw steady rains, while otherwise moisture here was again limited to the north and west. Forecasts remain little changed into next week, with Argentina's ag belt still expected to continue seeing good rains and the bulk of Brazil's growing areas staying dry for at least the next 5-7 days.

 

  • In the US, forecasts have trended wetter overnight for the eastern part of the country, and now see multiple low pressure systems coming out of the Gulf and potentially providing ample moisture to most of the mid-south and south east. The heaviest rainfall totals have slowly been moving north all week, with the EU model now showing a band of 1-2" through N AR/S MO and into IL and IN by the end of next week. Temperatures in the east will remain average to above average, while the models continue to show a return to cooler air on the West Coast beyond next week.

 

  • Have a good weekend and enjoy the warmer weather! Tomorrow marks the first day of meteorological spring, while daylight savings time starts in just one more week on March the 9th. The end of winter is approaching.