PM Comments March 7 2025
Good afternoon. Happy Friday. Choppy trade to round out the week at the CBOT on Friday, as headlines continued to dominate a lot of the intraday price action. Yesterday, it was Canada and Mexico; today, the headlines revolved around Ukraine and Russia, with Trump threatening new sanctions on the latter if progress isn't made towards peace.
CK finished the week at 4.69 1/4, up 5 1/4. CN was up 5 cents at 4.75 3/4. SK closed at 10.25, down 2 1/4. SN closed at 10.38 3/4, down 3/4 of a cent. Inside days for all four contracts. WK closed at 5.51 1/4, down 2 and 3/4, and took out yesterday's low by a tick. Products were mixed, May soybean meal closed Friday at 304.40, down 50 cents/ton, and May soybean oil closed at 43.42, up 25 points. Inside day for meal and an outside day for oil. Livestock markets finished higher, April live cattle closed at 200.27, up $4.00, April feeders closed at 278.15, up $3.72, and April hogs closed at 87.35, up 70 cents. Inside day for hogs. Outside markets are quiet/mixed, crude oil futures are up 70-80 cents/bbl, the Dow Jones index is up 210 points, and the US$ index is down 20-25 points. The S&P500 is up 30 points and the NASDAQ is up 120 points. New lows for the move on all three of the major stock index futures and also for the $ index. Gold futures are down around $10/oz.
Spreads were mixed to end the week, corn spreads were a quarter cent to 2 and 1/2 cents higher, and soybean spreads were down a penny and a half to down 8 and 1/2 cents. CH/CK closed at -14, up a half cent, and SH/SK closed at -14 3/4, down a penny and a half.
For the week: May corn was down one quarter of a cent; July corn was unchanged; May soybeans were down 3/4 of a cent; July soybeans were down a penny and a quarter; May Chicago wheat was down 4 and 1/2 cents; May soybean meal was down $4.20/ton; and May soybean oil was down 70 points.
In a post on Truth Social, Trump indicated that due to the fact Russia was "pounding" Ukraine on the battlefield, he was considering "large scale banking sanctions, sanctions, and tariffs" on Russia until a ceasefire and final settlement on peace is agreed to. He added that the two sides needed to get to the negotiating table immediately, before it was too late. The comments seem to be in stark contrast to ideas in the media that Trump was taking sides with Putin. Other news related to the conflict on Friday included headlines earlier in the morning that Putin was allegedly open to discussing a temporary truce in Ukraine if there is progress towards a broader peace deal, but details in the Bloomberg article seem to indicate this was sentiment that was expressed during meetings in Saudi Arabia last month, and not necessarily new news. The headlines come ahead of a scheduled meeting between the US and Ukrainian sides in Saudi Arabia next week, in what will be the first meeting since the Oval Office debacle that occurred in Washington just a week ago.
Tariff news for Friday included rumors that retaliatory tariffs on Canadian dairy and lumber could be announced "as early as today, or Monday, or Tuesday" according to the President. On the Mexican side, comments indicated that roughly 85-90% of goods traded with the US fall under the USMCA agreement, and added that so long as Mexico doesn't put new tariffs on goods coming from the US, the US won't put new tariffs on goods coming from Mexico - whether Trump agrees with this sentiment or not has yet to be seen. It is becoming difficult to keep up with the changing rhetoric on tariffs; who's getting them, who's not getting them, when do they go into effect, are there any exceptions, are they permanent, and so on and so forth. It has become anyone's guess what the next headline is going to read, which has made trading the news nearly impossible. Our advice would be continue to make risk management the priority, and don't chase the market on sharp moves in either direction. Regardless of the trade/political situation, the global corn balance sheet remains fairly tight.
CFTC data for the week ending March 4th showed an expected massive week of selling by the funds to the tune of some 175k+ contracts between corn, beans, and wheat combined. Data shows managed money traders in the week were sellers of a combined 117,702 contracts of corn futures/options (now net-long 219,752 contracts), sellers of a combined 43,695 contracts of soybean futures/options (now net-short 35,487 contracts), and sellers of a combined 14,786 contracts of Chicago wheat futures/options (now net-short 82,399 contracts). This was the largest week of fund selling in corn since February of 2023 and the largest week of fund selling in soybeans since June of last year. In soy products, funds were sellers of 22,151 contracts of soybean meal (now net-short 85,344 contracts) and sellers of 33,383 contracts of soybean oil (now net-long 9,669 contracts). Similarly, this was the largest week of fund selling in soybean oil since April of last year.
Not going to harp a bunch on weather going into the weekend as the forecasts for both the US and South America continue to not show a lot of change from the solutions that have been offered all week. Through the weekend and into next week, Argentina will continue seeing good to in some places too good of rain, while moisture is still expected to work back further north into Brazil by the end of next week. Heat will be confined mostly to the dry areas of eastern Brazil, while elsewhere, temps are expected to be average to below average.
Light/scattered precip looks to linger through the southeast tonight and into tomorrow morning, before another low is seen bringing precip to this area through the day on Sunday. The rest of the Midwest though looks set for several days of drier weather, while temperatures will begin rising on Saturday and continue doing so into the middle of next week; highs across the northern plains and western/northwestern Midwest will reach the upper 60's/low 70's by the first part of next week, which is some 20 degrees+ above average.
As has been the case the past few weekends, and will likely be the case for most weekends going forward, be aware of political headlines that could possibly lead to active markets Sunday evening. Also as a reminder, don't forget to 'spring forward' and turn your clocks ahead 1 hour Saturday night/Sunday morning as daylight saving time begins. Have a good weekend!