PM Comments February 28 2025
Good afternoon. Happy Friday. Ugly week in the grain markets this week with corn and wheat futures each making it a perfect five for five on the down side, while soybeans were four for five and finished just a penny higher on their one up day. As the weather situation in South America has normalized over the past couple weeks, there just hasn't been a lot of bullish input to keep the funds engaged in their already rather sizeable long position, which data this afternoon showed continued to fall.
CH ended the week at 4.53 1/2, down 11 and 1/4. CK was down 11 and 1/2 at 4.69 1/2. SH closed at 10.11 1/2, down 11 and 1/4. SK finished at 10.25 3/4, down 11 and 1/2. WK closed at 5.55 3/4, down 6 and 3/4. All five made new lows for both the week and the month. Products were mixed lower, May soybean meal closed at 300.20, unchanged on the day, and May soybean oil closed at 44.12, down 1.23. New lows for both the week and the month here also. Livestock markets ended the week lower, April live cattle were down $3.47 at 192.65, April feeders were down $2.55 at 273.00, and April hogs closed at 83.67, down 70 cents. New lows for the move in both live cattle and hogs and an outside day lower for feeders. Outside markets are mixed, crude oil futures are down 30 cents/bbl, the Dow Jones index is up 550 points, and the US$ index is up 30-40 points. The S&P500 is up 80 points and the NASDAQ is up 300 points. Inside day for crude oil and new lows for the move in all three major stock indexes; gold futures are down $30-40/oz.
Spreads were mixed to end the week, corn spreads were up a quarter of a cent to down 4 and 3/4, and soybean spreads were up a quarter of a cent to up a penny. CH/CK closed at -16, up 1/4 of a cent, and SH/SK closed at -14 1/4, also up 1/4 of a cent. New contract low for CH/CK at -17 1/2 and new low for WH/WK at -18 1/2.
For the week: March corn was down 37 and 3/4 cents; May corn was down 35 and 1/2 cents; March soybeans were down 28 cents; May soybeans were down 31 and 1/2 cents; May Chicago wheat was down 48 and 1/4 cents; May soybean meal was down $3.70/ton; and May soybean oil was down 3.22 cents/lb.
For the month of February: March corn was down 28 and 1/2 cents; May corn was down 23 and 1/2 cents; March soybeans were down 30 and 1/2 cents; May soybeans were down 31 and 3/4 cents; March Chicago wheat was down 22 and 1/2 cents; March soybean meal was down $9.40/ton; and March soybean oil was down 2.58 cents/lb. As February is also crop insurance pricing month, we will add that December corn futures in the month averaged a close of $4.70, and November soybeans averaged a close of $10.54.
USDA this morning announced a daily sales flash this morning for the first time since Friday, February 14th; private exporters reported the sales of 20,000 mt's of soybean oil for delivery to unknown destinations during the 2024/25 marketing year. Of note, this is also the first flash sale of bean oil in the 2025 calendar year.
Since we already mentioned the funds we'll start there this afternoon; commitment of traders data from the CFTC showed that in the week ending Tuesday February 25, managed money traders were sellers of 16,079 combined contracts of corn futures/options, sellers of 8,318 combined contracts of soybean futures/options, and sellers of a combined 6,037 contracts of Chicago wheat futures/options. This makes them now net-long 337,454 contracts of corn, net-long just 8,209 contracts of soybeans, and net-short 67,614 contracts of Chicago wheat. In soy, products funds were sellers of 6,200 contracts of soybean meal, which makes them net-short 63,193 contracts, and were sellers of 10,420 contracts of soybean oil, which makes them net-long 43,052 contracts. Of note, this was the first week of net-selling in soybean oil since the week of January 7th.
Otherwise, the White House was again the center of attention on Friday, where the meeting between President Trump and Ukrainian President Zelensky, by most accounts, could not have gone much worse. Zelensky was in Washington to sign a framework agreement on rare Earth minerals with the US that had been worked out during the week, but the trip was cut short following a heated back-and-forth between the two in the Oval Office, in which Vice President Vance was also involved. Footage of the interaction was widely available on social media all afternoon, and showed the American side berating Zelensky over his lack of appreciation for US support and also his apparent lack of desire for peace. Taking to Truth Social following Zelensky's departure from the White House, Trump penned "Much was learned (today) that could never be understood without conversation under such fire and pressure. It's amazing what comes out through emotion, and I have determined that President Zelensky is not ready for Peace if America is involved..." The President also added that Zelensky disrespected the US and the Oval Office, and that he could return when he was ready for peace.
As we get into March, the next fundamental market mover will be the March WASDE report on the 11th, and then the quarterly stocks and March acreage reports which will be out on the 31st at the end of the month. In the meantime, traders will continue to be exposed to market moving geopolitical headlines, as the number of events on this front does not appear to be decreasing. Looking more short term, Monday looks to be an interesting session, as we are as of now unable to rule out the possibility that some sort of trade agreement could be reached with either Canada or Mexico at some point between now and 11:59pm that night. We've said it repeatedly, but we can not understate just how difficult it is to predict which direction Trump's rhetoric will go on any given day. The one thing that farmers and ag traders do know for sure is that time is not stopping and the US spring planting season is right around the corner.
There is still not a lot new on weather going into the weekend, as South American forecasts into next week remain largely the same as the last several days. Argentina's growing regions will continue to see good rains which will benefit crop development, while further dryness in Brazil is expected to continue allowing good soybean harvest/corn planting progress. Heat will continue to be a concern in southern Brazil and northern Argentina, but Argentina's southern growing regions will see mostly below average temps.
For the US, Midwest farmers will have their attention on a pair of low pressure systems that are expected to bring rainfall to most of the Corn Belt next week. The first, expected mid-week next week is, is predicted to provide 1-2+" for an are from Texas up through Missouri and into Illinois/Iowa, while the second looks to add another inch further to the south. The northwest corner of the Midwest looks to largely miss out on this precip, which leaves it as the number 1 area of concern going into spring. Temperature forecasts trended even armer for the eastern half of the US at id-day today, with the both the EU and GFS showing temps that are now in the 10-15 degrees above average range as opposed to the 5-10 range seen earlier this week.
Have a good weekend and enjoy the warmer weather. Markets likely will get off to a hot and fast start Sunday evening, with tariff talk to be the main theme throughout the day.