AM Comments March 4 2025
Good morning. Markets went down, down, down in a burning ring of fire; or something like that. CBOT values are once again lower in overnight trading to start Tuesday, as Trade War 2.0 is officially underway. Trump's 25% tariff increases on our neighbors to both the north and the south went into affect at midnight last night, with the President saying neither country, nor China, had done enough to curb the flow of illegal drugs and migrants coming into the US. Almost immediate retaliation was announced from both the Chinese and Canadians on a host of US ag goods, which has produced additional headwinds to the space so far. Mexico has not made any announcements as of this writing, but President Sheinbaum is expected to speak with reporters in Mexico City later this morning. Tuesday looks to be all about trade/tariffs. Corn futures to start the day are down 2-5 cents, soybean futures are down 11-12 cents, and the Chicago wheat market is down 3-5 cents. Products are lower, soybean meal is down $3-4/ton, and soybean oil is down 20-30 points. Outside markets are lower; crude oil futures are down 80-90 cents/bbl, the Dow Jones index is down just 90 points and the US$ index is down 60-70 points. The S&P500 is down 20 points and the NASDAQ is down 70 points; gold futures are up $20-30/oz. Also of note, cotton futures are down sharply and have made new contract lows this morning.
Today's Reports: API Energy Stocks
- Deliveries for Tuesday according to the CME Group included 1,012 contracts of soybean meal, 215 contracts of soybean oil, 59 contracts of corn, 247 contracts of KC wheat, 259 contracts of soybeans, 33 contracts of Chicago wheat, and 29 contracts of Minneapolis wheat.
- After the close on Monday, the USDA released both the Fats & Oils report and the monthly Grain Crushing report for the first month of 2025; starting with the Fats & Oils, data showed soybean crush in January at 213 mil bu's, which was down 2.3% from December's figure, but up 9.8% from January 2024. Soybean oil stocks as of January 31 totaled 2.090 bil lbs, which was surprisingly up more than 23% from December and also up 3% from last January. To view the full report, please click here.
- The Grain Crushing report for January showed corn used for ethanol in the month at 457.4 million bu's, which was down 5% from December's figure but up 4% from January of last year. Total corn consumption in the month was seen at 503 million bu's, and as ethanol makes up a majority of this, the figure was similarly down 5% from December but up 4% from last January. To view the full report, please click here.
- In retaliation for the new tariffs, China almost immediately announced it was suspending soybean imports from three US firms, and also placed restrictions on dozens of other US companies citing security concerns. Beijing also announced new 15% duties on US ag imports including chicken, wheat, corn, and cotton, and also announced 10% duties on soybeans, pork, beef, fruits, vegetables, and dairy products. The Chinese tariffs have a start date of March 10th.
- Canadian Prime Minister Justin Trudeau said last night that his country would be responding by putting 25% tariffs on roughly $30 bil Canadian dollars worth of US goods, with this list jumping to $125 bil Canadian dollars worth of goods if the measures on the US side are still in place after three weeks.
- According to Brazil's Conab, soybean harvest progress in the country has officially caught up to last year, with data showing progress as of Sunday at 48.4%; this compares to 36.4% last week and 47.3% last year. Safrinha corn planting has advanced to 69.6% complete, up from 53.6% last week but still well behind last year's pace of 73.7%.
- The Australian Board of Agricultural and Resource Economics and Sciences (ABARES) yesterday raised their forecast of Australian wheat production in the current season from 31.9 mmt's to 34.1 mmt's as yields continue to run better than expected. The group also released initial estimates for 2025/26, showing production slightly down year/year at 30.5 mmt's.
- The latest on the war in Ukraine includes a pausing of US military aid to the country announced yesterday, following comments from President Zelensky that an end to the war was "very, very far away." News stories also reported that the White House seemed to be mulling whether to lift some sanctions on Russia, which the Kremlin has said recently was a necessity to normalize working relations between them and the US. Trump also mentioned on Monday that the minerals deal that was supposed to be signed last week isn't entirely dead.
- Rinse and repeat for both Argentina and Brazil weather on Monday, as rains continued to fall in the Argy south, while most of Brazil's farmers enjoyed another dry day of soybean harvest/corn or cotton planting. Satellite data shows rainfall in Argentina totaled a similar 0.5-1.5" to what was seen on Sunday, the coverage appears to be about half of what it was over the weekend. Forecast wise, there continues to be very little change expected for either country over the next 10-15 days.
- US weather continues to focus on a storm system that is set to impact the central and eastern parts of the country today/tonight and into tomorrow; potentially heavy snowfall is being forecast for a band through IA and S MN and then into WI and further north through the U.P. and Great Lakes into Canada while the rest of the astern US is expected to pick up anywhere from a tenth to 1.5" of rainfall. The GFS this morning is also showing an additional system for this weekend/early next week, but the EU is drier and keeps this system closer to the Gulf.
- Despite a brief bout of cold air that will allow for the coming snowfall, temperatures overall look to remain well above average throughout the eastern 2/3's of the country, with models this morning continuing to be in good agreement on warmer than normal temps in both the 5-10 and 10-15 day periods. The west looks to stay below average in the same time frames, as Pacific troughing keeps temps here cool.