PM Comments March 12 2025
Good afternoon. Corn and soybean markets saw lower to sharply lower price action throughout the day on Wednesday, as the new tariff war is spreading and continues to dominate most of the day to day headlines. The back-and-forth cycle of Trump announcing (or proposing) new tariffs during the day hours and then waiting for the response from whatever country was targeted the day following has led to a bit of exhaustion on behalf of both the producer and the trader; this has caused daily trading volumes to decline throughout the week, which we assume is a trend that lasts into the weekend.
CK closed Wednesday at 4.60 and 3/4, down 9 and 1/2 cents. CN was down 9 and 1/2 also at 4.67 1/2. SK ended the day at 10.00 and 1/2, down 10 and 3/4. SN closed at 10.15 and 1/2, down 10 cents. Corn ended the day roughly 4 cents off the lows, while soybeans were roughly 6 cents off their lows. WK closed at 5.54, down 2 and 3/4. Products were lower, May soybean meal closed at 300.20, down $1.60/ton, and May soybean oil closed at 41.68, down 25 points. New lows for the move in bean oil. Livestock markets were mostly higher, April live cattle closed at 201.40, up $1.85, April feeders closed at 280.72, up $3.02, and April hogs closed at 86.50, down just 5 cents. New contract highs for April feeders. Outside markets are mostly higher, crude oil futures are up $1.40-1.50/bbl, the Dow Jones index is down 80 points, and the US$ index is up 25-30 points. The S&P500 is up 20 points and the NASDAQ is up 160 points. Inside day for the $ index. Gold futures are up around $20/oz.
Spreads were mixed/mostly lower; corn spreads were up a penny and 3/4 to down 3 and 1/4, and soybean spreads were up a half cent to down a penny and 3/4. CH/CK closed at -12, up a penny and 3/4, and SH/SK closed at -13, up a half cent. CK/CN was unchanged on the day at -6 and 3/4, and SK/SN closed at -15, down 3/4 of a cent. New contract lows in WK/WN at -16, and it closed at -15 1/2.
Today's main tariff news was retaliatory action by both the EU and Canada in response to Trump's 25% steel and aluminum tariffs that went into effect at midnight last night. Canada, who is the biggest supplier of steel and aluminum to the US, announced like 25% tariffs on a list of goods totaling 29.8 bil Canadian dollars. In the case of Europe, the European Commission announced counter measures worth 26 billion euros, which are proportionate to the roughly $28 bil USD worth of tariffs installed by the US; the wording is a bit confusing, but it appears along with these new measures, they will also be ending a current suspension of separate tariffs on April 1, with the whole package expected to be implemented by April 13th. However, Commission President Ursula von der Leyen told reporters following the announcements that she had already instructed the EU's Trade Commissioner to resume dialogue with US counterparts, which means we can't rule out the possibility of a deal being struck between now and then.
Ethanol production data from the EIA this morning for the week ending March 7th showed a new six week low in daily production, while stocks stayed at similar levels to last week and remain near the top end of recorded historic levels. Daily production in the week totaled 1.062 mil bbls/day, which was down nearly 3% from last week but up about half a percent from the same week last year. Stocks were down 87k bbls from last week at 27.376 mil bbls, which is still below the marketing year high from two weeks ago but well above year ago levels. We estimate corn usage in the week at 104.9 mil bu's, which brings cumulative marketing year use to 2.878 bil bu's. As we mentioned yesterday, USDA did not make any adjustments to their full marketing year ethanol production figure of 5.500 bil bu's. EIA data also showed petroleum product stocks figures for the week; crude oil stocks were up 1.448 mil bbls at 435.223 mil, gasoline stocks were down 5.737 mil bbls to 241.101 mil, and distillate stocks were down 1.559 mil bbls to 117.595 mil. Implied gasoline demand in the week was estimated at 9.182 mil bbls/day, compared to 8.877 mil last week and 9.044 mil in the same week last year.
Other mid-week news included updated Canadian acreage estimates from StatisticsCanada (StatsCan) that were released this morning; of note in the figures were a bump in total wheat area to 27.48 mil acres (a four-year high), and also a nearly 2% drop in canola acres to 21.65 million. Barley area was adjusted lower by 2% to 6.28 million acres, while corn acres were adjusted higher by just over 3% to 3.77 million acres; soybean acres were seen down 1.3% to 5.64 million acres. The data set is interesting in that is based on survey results that were collected in December and January, which would've been well ahead of the current political landscape that exists today. The biggest adjustment traders see possible is in canola, where some commentors on social media say the final number could be below 20 million acres due to recently applied tariffs by the Chinese on Canadian exports.
Weather news remains a back-burner topic, as there continues to be very little shift in the forecast for either South America or the US. Starting south of the equator, models continue to show a gradual return of moisture to southern/south-central Brazil over the next week, while rains will become more limited for a period in Argentina. 10-15 day forecasts though continue to show these rains returning by the end of the month, which has kept concern levels limited following weeks of soil moisture improvement. The biggest story here remains Brazil, where safrinha corn has gotten off to a slightly drier-than-desired start in some areas; we mentioned it at the beginning of this week, but this is why it is important the currently forecasted pattern shift verifies.
US weather focus remains on the mid-south/southeast/Midwest as we get into the end of the week and weekend, as a potentially powerful storm system is expected to bring heavy winds and possibly tornadoes to the southeastern part of the country, while rainfall totals are expected to exceed 1.5-2" by Sunday afternoon through parts of Tennessee/Kentucky/Georgia/South Carolina. A wider swath of the eastern US is expected to see a lesser 0.5-1". Beyond this, maps are wetter at mid-day for next week, and see another low pressure system bringing moisture to the Midwest the middle of next week. Extended guidance is in fair agreement on above average moisture chances for the northeastern Midwest and more generally the eastern half of the country, while the south/southwest continues to expect dry conditions, which has been ongoing now for weeks. Temperature forecasts are little changed, and continue to offer well above average air temps throughout most of the month of March, especially in the eastern US.