AM Comments March 18 2025
Good morning. Tuesday trade this morning has started similar to how Monday's ended, as choppy, low volume, markets are once again the theme on day two of this week. Wheat futures spent most of the overnight session following through on yesterday's buying, but have since fallen back a bit in the early morning hours as the buying begins to subside. News-wise, yesterday's NOPA crush report was on the disappointing side for the soybean market, but otherwise Monday did little to alter the overall existing fundamental outlook, with focus still squarely centered on the US spring acreage mix and final crop sizes out of Brazil and Argentina. Tariffs continue to be the other feature, but it appears an announced April 2nd date has caused a temporary pause in the day-to-day juggling of this story, with most in 'wait and see' mode on what tariffs actually get applied and on whom. Corn futures to start Tuesday are trading 1-4 cents lower, soybean futures are trading unchanged to a penny higher, and the Chicago wheat market is also unchanged to a penny higher. Products are mixed, soybean meal is down around $1/ton, and soybean oil is up 30-40 points. Outside markets are also mixed, crude oil futures are up around 80 cents/bbl, the Dow Jones index is down 130 points, and the US$ index is down 10-15 points. The S&P500 is down 25 points and the NASDAQ is down 100 points. Gold futures are up $25-30/oz and have again made new contract highs overnight.
Today's Reports: API Energy Stocks
- Tuesday's delivery slate was light yesterday evening; the CME Group assigned another 450 contracts of soybean meal, and another 151 contracts of rice.
- Monday's NOPA February soybean crush figure of 177.87 million bu's was down more than 11% from January's figure, and was also a new five-month low as low prices for meal and another stretch of frigid weather likely slowed some facilities in the month. Soybean oil stocks inversely reached an 8-month high at 1.503 bil lbs, which continues to reflect the lack of domestic biofuel demand due to the absence of policy guidance.
- Yesterday afternoon's weekly winter wheat progress update for select states in the US showed conditions in KS further declining on the week, while conditions in TX and OK stabilized but remain below last year; the KS crop was rated 48% g/ex, down 4% on the week, while TX at 28% g/ex and OK at 46% g/ex were both unchanged from last week.
- Also on yesterday afternoon's weekly data slate was updated crop progress info from Conab for Brazil; the most recent data shows as of Sunday, March 16th, soybean harvest in the country has reached 69.8% complete, while safrinha corn planting has reached 89.6% complete as of the same day. Corn planting remains about 1% behind average pace, while soybean harvest pace has eclipsed the five-year average now by almost 5%.
- US sources are indicating that the Chinese government late on Sunday renewed export registrations for some US meat plants that traders were fearful would be expiring by the end of the day. Sources say the move should allow pork shipments to China to go through without problem, but dozens of US beef plants had their eligibility expire, and are hopeful for a similar announcement in the days ahead. The USDA in a statement last week said they and the GACC (China's customs authority) would continue working closely, but had not offered additional comment.
- According to sources familiar with the matter, Russian President Vladimir Putin has demanded that all US arms shipments to Ukraine stop as part of a proposed 30-day ceasefire in Ukraine; the statement comes ahead of scheduled phone talks between Putin and US President Trump, which sources believe will occur sometime between 4pm and 6pm local time in Moscow today (8am-10am central).
- In other war news, it appears the two-month "ceasefire" that has been shaky at best by most accounts in Gaza has fallen apart overnight, as Israel launched a series of strikes across the region Monday evening. Hamas officials say more than 400 people were killed in strikes that Israeli PM Benjamin Netanyahu said the were result of the armed militant group's refusal to return Israeli hostages.
- A strip of area through central/south-central Brazil saw decent rains on Monday of up to an inch, but otherwise, the rest of the country, as well as most of Argentina, were on the dry side. Five day forecasts continue to show better rain chances through central and northern Brazil, while what limited moisture there will be in Argentina will be mostly north and west of the country's main growing regions. Heat remains a concern in the short term, with models in good agreement on well above average temperatures for the bulk of both countries into March 25th.
- The next low pressure system coming out of the western US is expected to make its way into the western Midwest late tonight/early tomorrow, and is once again expected to bring possible heavy winds, rain and snow to a fairly wide swatch of the central Corn Belt; the GFS this morning sees heaviest accumulations of snowfall in a band from east-central NE, through N IA/S MN and into WI and then the Great Lakes. Rainfall outside of this will be light, with no more than a half inch expected for the rest of the eastern Midwest.
- Extended forecasts into the last week of March in poor agreement, which is keeping our confidence in their solutions low; the EU ensemble is the driest of the bunch and sees the southern US drought expanding north and east, while the GFS, the CPC, and the EU AI are all keeping above average moisture potential in the upper Midwest and northeast into the end of the month. Temperature outlooks this morning in the 5-10 day period see a shot of cooler air coming into the eastern US, but then quickly turn back warmer for the whole of the country in the 10-15 day period.