AM Comments March 12 2025
Good morning. Attention in the ag space has quickly returned to geopolitical happenings and world trade to start Wednesday, as the March WASDE report offered little input to either side of the proverbial 'trading aisle'. Yesterday's back and forth tariff confusion yielded an ushering in of new 25% duties on all steel and aluminum imports into the US, not just from Canada, at midnight last night, which has caused bearish reverberations throughout the commodity space. Otherwise, focus continues to shift to back north of the equator, with early summer-like warmth noted across a wide swath of the Midwest this week and the next fundamental report of note being the March acreage report at the end of the month. The US spring planting season will be here sooner than later. Corn futures this morning are trading 4-8 cents lower, soybean futures are trading 7-8 cents lower, and the Chicago wheat market is down 3-4 cents. Products are lower, soybean meal is down around $1/ton, and soybean oil is down 15-20 points. Outside markets are in the green, crude oil futures are up 60-70 cents/bbl, the Dow Jones index is up 210 points, and the US$ index is up 30 points. The S&P500 is up 40 points and the NASDAQ is up 170 points.
Today's Reports: Statistics Canada Principal Field Crop Areas; Monthly CPI/Inflation; EIA Weekly Ethanol Production/Energy Stocks
- Mid-week deliveries included another 56 contracts of soybean oil, 36 contracts of rice, 29 contracts of KC wheat, 60 contracts of soybeans, and 12 contracts of Chicago wheat.
- Yesterday's March WASDE update from the USDA offered little input to the markets, with ending stocks in both corn and soybeans unchanged from the February estimates on little/no balance sheet adjustments; click here to view our snapshot of the numbers. The next big data day will be now at the end of the month, when NASS releases the prospective plantings report and the quarterly grain stocks report.
- This morning's weekly ethanol production report for the week ending March 7th is expected to show daily production in the week between 1.060 and 1.081 mil bbls, while stocks for the week are seen similar to last week in a range of 26.788 to 27.168 mil bbls.
- According to a Bloomberg survey of analysts, traders expect Conab tomorrow morning to increase their Brazilian soybean production estimate by 2.7 mil tons from last month to 168.7 mmt's. Corn production is also seen increasing by about 3 mil tons to 125.0 mmt's. Corn planted area is expected to tick slightly higher also, with traders expecting this number at 21.4 mil ha's vs 21.2 mil last month.
- Sources in Argentina say oilseed workers at soybean processing plants will launch a nationwide strike starting today over a wage dispute with export behemoth Vicentin. Speaking to Reuters, the source said the strike would last indefinitely, with no further details given. Documents show Vicentin was unable to pay the full amount of February's wages to workers, and that they were scheduled to receive just 30% of what they were owed.
- A local Ukrainian Governor on Wednesday said that the previous day's Russian missile strike on the Odesa port had killed 4 people on a ship that was loading wheat. The attack happened just several hours before Ukrainian officials had agreed with their US counterparts to a 30-day ceasefire agreement, which now awaits Russian agreement. The US also agreed to resume military aid and intelligence sharing following more than 8 hours of talks in Saudi Arabia.
- In response to new 25% steel and aluminum tariffs by the Trump administration, senior EU officials said that the bloc would be targeting politically sensitive goods in Republican-led states, though it is unclear exactly how such tariffs would work. The total list of announced retaliatory tariffs included $28.3 billion USD worth of goods. Sources also indicated that further plans would be made with member countries to adopt additional lists of ag products that could also be subject to tariffs by mid-April.
- The US House of Representatives on Tuesday voted 217-213 to pass a funding bill that would avert a government shutdown at the end of this week, with the bill now in the hands of the Senate. Sources familiar say the Senate's biggest objection has been over Elon Musk and the DOGE team, which now puts them in an interesting spot: vote to keep Elon's cost-cutting mission intact, or vote to reject the bill and bring the government closer to a shutdown.
- This morning's monthly inflation update is expected to show annual headline inflation at 2.9%, which would be down just marginally from last month's 3.0% reading. Core inflation is also seen coming in slightly lower from last month at 3.2% vs 3.3%. However, the numbers are expected to be somewhat of a moot point, as economists are more concerned about the current trade war and the prospects of further tariffs causing an uptick in inflation in the months ahead.
- Southern Argentina saw slightly better than expected rains on Tuesday according to satellite, but the forecasts this morning show the same pattern that has been seen all week; limited precip will be seen across most of Argentina in the next 5 days, while rains return to southern and south-central Brazil over the same period. Extended forecasts show generally the same, with light shower potential in central Argentina and better rains through southeast Brazil.
- Midwest weather will stay quiet for another few days, but models continue to be in good agreement on possible severe weather coming into the area Friday/Saturday/Sunday; most of the precip from this system will be rainfall, but parts of the upper Midwest in the Dakota's/MN still see snow potential. In the south/southeast, severe thunderstorm/tornado potential exists while wind gusts could exceed 60-80 mph. Once this system passes, things again look drier next week.