PM Comments March 11 2025
Good afternoon. Ag markets closed quietly lower on Tuesday as the USDA's March WASDE report has come and gone with very little fanfare. There were next to no adjustments made from the February numbers for either corn or soybeans, which was reflected in the limited trading ranges that were seen in both for the last two hours of the session. As we mentioned yesterday, the bull camp was hopeful for some friendly news in today's report, and as none was had, markets resorted to drifting lower.
CK closed Tuesday at 4.70 1/4, down a penny and 3/4. CN was down a penny and a half at 4.77. SK finished at 10.11 and 1/4, down 2 and 3/4. SN closed at 10.25 1/2, down 2 and 3/4 also. WK was down 5 and 3/4 at 5.56 3/4. Products were lower, May soybean meal closed at 301.80, down 50 cents/ton, and May soybean oil closed at 41.93, down 33 points. Livestock markets were also lower, April live cattle closed at 199.55, down $1.02, April feeders closed at 277.70, down 22 cents, and April hogs closed at 86.55, down $1.75. Outside markets are mixed/lower, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is down 450 points, and the US$ index is down 60 points. The S&P500 is down 40 points and the NASDAQ is down 50 points. New lows for the move in all three of the major stock indices and also the $ index. Gold futures turned around and are $20-25/oz higher.
Spreads Tuesday were mixed, corn spreads finished unchanged to a penny and 3/4 lower, while soybean spreads were up 3/4 of a cent to down a half cent. CH/CK closed at -13 3/4, down a half cent, and SH/SK closed at -13 1/2, up 3/4 of a cent. CK/CN closed a quarter cent lower at -6 3/4, and SK/SN closed unchanged at -14 1/4.
Was more or less a rinse and repeat situation from the February report this morning, as the USDA again punted to next month on making any notable adjustments to either the supply or the demand side for either crop. Starting with corn, there were zero changes made to the domestic balance sheet of any kind, as exports and ethanol were both left alone despite some in the industry thinking increases in both were warranted. This obviously also led to an unchanged ending stocks number of 1.540 bil bu's. On the global side, world ending stocks were down marginally from last month at 288.94 mmt's; production was unchanged for both Brazil and Argentina, while Brazil's exports were trimmed 2 mmt's to 44.0 mmt's. China's imports were trimmed another 2 mmt's to 8.0 mmt's. Interestingly, USDA lowered 2023/24 Brazil corn production by 3 mmt's to 119.0 mmt's; old crop exports were also trimmed 1.2 mmt's to 38.3 mmt's. Argentina old crop corn production was raised 1 mmt to partially offset some of the cuts in Brazil.
For soybeans, the only balance sheet change was a three million bushel shift from seed demand to the residual category, which resulted in an unchanged ending stocks number of 380 mil bu. Exports were left alone and there was no change in the domestic crush forecast, which is possibly the result of a continued lack of policy guidance regarding renewable fuel tax credits. For the products specifically, soybean oil exports were raised by 200 mil lbs, but ending stocks were unchanged as this was offset by a 50 mil lb increase in beginning stocks from the year prior, as well as a 150 mil lb reduction in biofuel demand; there were no changes made to the meal balance sheet. At the world level, ending stocks were trimmed about 3 mmt's to 121.41 mmt's; like corn, there were no adjustments made in either Brazil or Argentina, or actually anywhere else for that matter. The drop in carry was the result of global crush increasing by 3 mmt's, with China accounting for 2 mmt's and Argentina accounting for the other.
Wheat at least had some adjustments to speak of, though they were minimal and produced a similarly dull market reaction to the others. Imports were raised 10 mil bu's to 140 mil bu's, and exports were trimmed 15 mil bu's to 835 mil bu's, which resulted in a jump in ending stocks to 819 mil bu. World ending stocks also increased a similar amount to 260.08 mmt's. This was mostly the result of higher production numbers in several places; Argentina was raised 800k mt's, Australia was raised 2.1 mmt's, and Ukraine was raised 500k mt's. Australia's exports were raised 1 mmt, but exports out of the EU were cut by 1 mmt and exports out of Russia were trimmed by 500k mt's.
Other non ag headlines were also active again on Tuesday, as Trump's afternoon pressers in the Oval Office have become close to appointment viewing with the plethora of geopolitical happenings going on. Of note on today's agenda was Russia/Ukraine, again, as the President said Ukraine had agreed to a proposed 30-day ceasefire following talks in Saudi Arabia, but added "it takes two to tango" in regards to also needing Russia's agreement to any sort of a pause in the war. This would be the first such pause in more than 3 years of fighting, as it continues to appear evident that Trump is making some sort of progress on bringing an end to the conflict. He added that the US would be meeting with Russia sometime either tonight or tomorrow, though it was unclear whether this meant Trump and Putin directly or more likely their respective teams. Other political news included an announcement from Canada that the proposed 25% tariff on electricity exports to some northern US states was to be suspended temporarily following what Ontario Premier Doug Ford said was an 'olive branch offering' from US Commerce Secretary Lutnick. Following this announcement, Trump said he would be reviewing whether new 50% tariffs on Canadian autos announced earlier in the day would be going into effect, with the latest headlines seeming to indicate a switch to a 25% level.
South American weather news was again mostly unchanged at mid-day on Tuesday, with the forecasts continuing to show mostly dry conditions throughout Argentina for the rest of this week and into the weekend, while moisture improves in southern Brazil by the end of this week. Northern and especially northeast Brazil will remain dry, but this does not impact a large amount of ag area. Week two forecasts into the end of the month are drier for eastern Argentina today than was seen yesterday. Temperatures here however will stay mostly below average, while most all of Brazil will see daytime highs that are some 4-5 degrees C above average for the next week.
US weather forecasts are also little changed today, with the models continuing to see light shower potential in the southeastern part of the US the back half of this week while the rest of the Midwest stays mostly dry. The western third of the US will see rain/snow beginning tonight/tomorrow morning, with this system then veering north as it crosses the Rockies and giving precip to the upper Corn Belt. Week two forecasts show this pattern largely continuing into the back half of the month, which provide boosts in soil moisture in the western Corn Belt that are quite badly needed. On the temperature side of things, there continues to be very little shift in either the nearby or the extended forecasts, as both the EU and the GFS are seeing above average air temps lingering for the eastern 2/3's of the US at least into March 26th. As we've mentioned recently, there will be days of intermittent cooler weather, but overall, temperatures should stay seasonably warm for the most part everywhere east of the Rockies.