PM Comments March 13 2025
Good afternoon. It's hard to say exactly what led to Thursday's buying, but for the first time in several sessions it appears something other than tariffs keyed the daily price action in corn and soybean markets. Unexpected production cuts in Argentina late yesterday afternoon led to buying right from the word go last night, which pretty much lasted through the day session and into the close.
CK closed Thursday at 4.65 and 1/4, up 4 and 1/2 cents. CN was up 4 and 3/4 at 4.72 and 1/4. Inside day for both. SK closed at 10.10 and 3/4, up 10 and 1/4. SN finished at 10.25, up 9 and 1/2 cents. WK was up 8 and 1/2 cents at 5.62 and 1/2. Products were mixed, May soybean meal closed at 307.10, up $6.90/ton, and May soybean oil closed at 41.28, down 40 points. This the highest close in May meal since February 10th, and soybean oil has now closed lower in 12 of the last 15 sessions. Livestock markets were mixed, April live cattle closed at 202.05, up 65 cents, April feeders closed at 279.97, down 75 cents, and April hogs closed at 85.62, down 87 cents. Feeders again made new contract highs again today at 282.35 before reversing and closing lower. Outside markets are mixed/lower, crude oil futures are down $1-1.10/bbl, the Dow Jones index is down 500 points, and the US$ index is up 20-25 points. The S&P500 is down 70 points and the NASDAQ is down 350 points. New lows for the move in both the Dow and the S&P. Gold futures are up $40-50/oz, with the April contract making new contract highs at $2998.50/oz.
Spreads were mostly higher on Thursday, corn spreads finished the day down a quarter of a cent to up 3/4 of a cent, and soybean spreads were down a penny to up 5 cents. CH/CK closed at -11 and 3/4, up a quarter of a cent, and SH/SK closed at -14, down a penny. CK/CN closed at -7, down a quarter of a cent, and SK/SN closed at -14 and 1/4, up 3/4 of a cent.
We've cautioned in recent writings against completely forgetting about South America despite the warm Midwest weather and rapidly advancing calendar, and today was a perfect example as to why. The production falls out of Argentina led to buying in both meal and corn, which spilled over into the other markets and lifted the whole space higher. In the case of meal, Argentina is the world's number one exporter, and the corn buying reflects just how the tight the world balance sheet has become and why every ton out of both there and Brazil is important. On the topic of Brazil, Conab also released updated production figures this morning; the numbers, as has been the case the last several months, weren't overly market-moving, but were a little friendly in relation to expectations. The group raised their soybean production estimate by a little over a million metric tons to 167.37 mmt's, while also raising their corn estimate by about 750k mt's to 122.76 mmt's. Both figures continue to trail those of the USDA at 169.0 and 126.0 mmt's respectively, but there is more agreement between the two groups this year than last year.
Weekly export sales data this morning for the week ending March 6th showed a second consecutive week of good soybean sales, while wheat sales were the best since the week of June 27th last year; corn sales were up from last week, but were still just mediocre for the third week in a row. Corn sales totaled 967k mt's, with featured buyers being the usual suspects of Mexico (431,600 mt's) and Japan (194,100 mt's); Spain also booked 144,100 mt's, and unknown destinations assigned out/rolled/canceled 285,900 mt's. Soybean sales totaled 752k tons, with featured buyers being China (208,300 mt's) and Indonesia (151,800 mt's). And lastly for wheat, sales for the week totaled 783k mt's, with featured buyers being Panama (237,600 mt's) and Korea (180k mt's); unknown destinations assigned out/rolled/canceled 113k mt's.
Other news on Thursday included an update on the war situation in Ukraine, with reports indicating Russian President Putin has agreed in principle to the 30-day ceasefire that had been laid out by the US earlier this week. Final details of any such agreement are still to be worked out, with sources also indicating that it was unlikely the US and Russian sides would have communication between now and the end of the week. That being said, it does appear as though there continues to be further progress made on some sort of a resolution to the ongoing conflict that Trump during his campaign vowed to bring a swift end to. Otherwise, the geopolitical was relatively quiet all things considered on Thursday, with there not being a particularly large amount of headlines for what seems like the first time in a long time.
Weather news for Thursday remained largely the same as the rest of the week, as Argentina is expected to be mostly dry through the weekend, while central/south-central Brazil looks to see totals of 1-2" over the next 5 days. The week-two forecast is wetter at mid-day through Argentina and also keeps moisture in Brazil, which is a near ideal outlook for crops here. In the US, focus remains on a strong storm system that is expected to bring potentially severe weather to the Midwest and southeastern US Friday night into Saturday. The GFS sees the heaviest moisture potential around the state of Kentucky, where totals are expected to possibly exceed 2" in places. Wind gusts are still expected to exceed 50-60 mph throughout the central Midwest, while the storm prediction center's severe storm outlook continues to show a rather large area of moderate storm risk through Missouri and Illinois. Once this system passes, a few days of drier conditions are expected to start next week, before another system is expected to impact the norther Midwest late Tuesday into Wednesday. Extended forecasts into the end of the month see this active pattern continuing, with most areas east of the Mississippi expected to continue seeing above average precip potential. There remains little change to the temperature forecasts, with models remaining in good agreement on mostly above average to much above average air temperatures for the Midwest into the end of the month.