AM Comments March 17 2025
Good morning. Feed grain markets are leading the ag space higher to start the new week in Chicago, as high winds and dusty/dry conditions over the weekend likely caused some amount of damage to the wheat crop in the southern Plains. KC futures are the highest of the bunch so far, but Chicago and Minneapolis are in rally mode also and have both taken out last week's highs. Otherwise, like we mentioned going home last week, we expect a bit of 'hurry up and wait' trading over the next couple weeks, as NASS's seeding intentions report on the 31st and the new proposed tariffs on April 2nd will keep large new investment into the space somewhat subdued over the next ten trading sessions. Corn futures to start the week are trading 3-5 cents higher, soybean futures are trading 1-2 cents higher, and the Chicago wheat market is up 10-12 cents; KC wheat is up 15-17 cents and Minneapolis wheat is up 10-12 cents also. Products are mixed, soybean meal is down around 50 cents/ton, and soybean oil is up 10-15 points. Outside markets are mixed, crude oil futures are up around 90 cents/bbl, the Dow Jones index is down 130 points, and the US$ index is near unchanged. The S&P500 and NASDAQ are each about 10 points lower. Gold futures are quietly higher.
Today's Reports: Monthly Retail Sales; Weekly Export Inspections
- March deliveries were again fairly busy on Monday; the CME Group assigned another 5 contracts of soybean meal, 25 contracts of soybean oil, 5 contracts of rice, 68 contracts of corn, 3 contracts of soybeans, and 9 contracts of Chicago wheat.
- CFTC data released Friday afternoon showed another heavy week of selling by the funds in corn, as they've now shed over 190k contract's worth of length in the past two weeks. Managed money traders are now seen net-long 146,541 contracts as of Tuesday the 11th (-73,212 on the week), and also net-short 15,544 contracts of soybeans (+19,943), and net-short 77,412 contracts of Chicago wheat (+4,987). In soy products, funds are now net-short 72,027 contracts of meal (+13,317), and net-short 13,852 contracts of oil (-23,521).
- NOPA (the National Oilseed Processors Association) will release monthly soybean crush data for the month of February later this morning; according to a survey of Reuters analysts, the report is expected to show crush in the month at 185.229 mil bu's, which would be down about 8% from last month and also down from February of last year (note Feb 2024 was a Leap Year, and had one extra day). Soybean oil stocks held by NOPA members as of February 28th are estimated at 1.386 bil lbs, which would be up nearly 20% from a year ago.
- According to the USDA, federally inspected pork production in the week ending March 15th totaled 544 mil lbs, which was up nearly 4% from last week, while beef production in the week totaled 512 mil lbs, which was up 1.4%. YTD pork production is down nearly 4% from last year, while beef production is down 2.3%.
- Despite a somewhat active data slate otherwise, focus in the financial world this week will be on the US Federal Reserve's Wednesday afternoon interest rate decision; the CME's FedWatch tool shows a 99% chance that rates will be held unchanged as of this morning, but also shows a nearly 60% chance that rates will be trimmed another quarter percentage point by June. Along with the US, Switzerland, Britain, and Japan will also be making interest rate decisions this week.
- Yemen's Houthi rebel group was back in the news over the weekend and is in part contributing to the rise in crude oil prices to start the week; the group said late last week that they would resume targeting Israeli shipping vessels in the Red Sea due to a lack of aid reaching Gaza, which sparked fresh military action and missile strikes on several of the group's locations by the US. The strikes, which are the first in the region under Trump, are said to be more 'far-reaching' than the one's done by the previous administration according to sources familiar with the matter.
- President Trump on Sunday also told reporters that he expects to have a phone conversation with Russian President Vladimir Putin on Tuesday, as there continues to be progress towards an end to the war in Ukraine. Trump said "we'll see" in response to whether there would be any sort of announcement on Tuesday, but added that there was a "good chance" for a deal.
- Satellite precip data for South America over the weekend shows a mostly dry 72-hour period through Argentina, with just light/scattered precip effecting a limited area in the southeast of the country. In Brazil, good rains returned to parts of the south-central growing regions, but coverage spotty and some areas remained dry.
- For the next five days, forecasts show this pattern largely continuing, as Brazil is expected to see better rains than have been had over the past week or two but not quite the coverage that was forecast last week, while Argentina's growing regions in the south and southeast will be mostly dry. Week-two forecasts also trended drier for Argentina in the period than was seen going home at the end of last week.
- Satellite rainfall data for the US over the weekend shows a good portion of TN/KY receiving upwards of 3+", while a lot of the Midwest east of the Mississippi received a more general 0.5-1". On the snowfall side, the heaviest accumulation was in north-central MN, while parts of the Dakota's, northern IL, and MI also picked up measurable amounts.
- For this week, forecasts show additional rain/snow for the Midwest Wednesday/Thursday, as the active pattern of the lasts several days looks to remain in place; an active Tropical Jet will keep pushing low pressure systems through the country, which will be good for continued moisture increases across the Midwest. Week-two maps this morning are drier in the southwest, but have maintained above average precip potential in the east and northeast into the end of the month.