PM Comments March 20 2025
Good afternoon, and happy first day of spring! Corn and soybean markets closed higher on Thursday, as a lack of farmer selling seemingly produced rising tides in both board prices and also cash basis levels.
CK closed Thursday at 4.69, up 7 cents. CN was up 6 and 1/4 at 4.75 1/2. New highs for the week in both. SK finished at 10.13, up 4 and 3/4. SN closed at 10.25 and 1/4, up 3 and 3/4. WK was down 6 and 1/4 at 5.57 and 1/4. New lows for the week in beans and wheat. Products were mixed, May soybean meal closed at 297.10, down 60 cents/ton and May soybean oil closed at 42.71, up 35 points. New lows for the week in meal and an outside day higher for oil. Mixed day for livestock markets, April live cattle closed at 208.47, up $1.65, April feeders closed at 288.45, up $1.72, and April hogs closed at 85.55, down 2 cents. New contract highs in both cattle markets, and an inside day for hogs. Outside markets are mixed, crude oil futures are up $1.20-1.30/bbl, the Dow Jones index is down 30 points and the US$ index is up 35-40 points. The S&P500 is down 15 points and the NASDAQ is down 50 points. Gold futures are up around $10/oz and made new contract highs again overnight. Inside day for the S&P and the NASDAQ.
Spreads were higher to end Thursday, corn spreads finished the day unchanged to 5 and 3/4 cents higher, and soybean spreads were up a half cent to up 4 and 1/2 cents. CK/CN closed at -6 and 1/2, up 3/4 of a cent, and SK/SN closed at -12 and 1/4, up a penny. The WK/WN wheat spread matched its contract low for the second straight day at -17 and 1/4.
Cash rumors dominated a lot of the intraday chatter in the markets on Thursday, as word was circulating that Brazil had purchased 2-3 cargoes of US corn out of the Gulf. While the business would be uncommon, its not all together unheard of; however, confirmation of the sales seems to be lacking this afternoon. It has been the case for some time now, but the competitive position of US corn on the global market is one of the few bright spots in that market these days, with it helping to offset some of the bearishness created by perceived increases in acreage that will likely add bushels to the balance sheet.
Other demand related news on Thursday included the weekly export sales report for the week ending March 13th, which like in recent weeks was good for corn, but disappointing for both soybeans and wheat. Corn sales in the week totaled 1.497 mil mt's, a new five-week high, with featured buyers being Japan (487,700 mt's), Korea (397,200 mt's), and Mexico (303,700 mt's); unknown destinations assigned out/rolled/canceled 383,600 mt's in the week. Soybean sales totaled 353k mt's in the week, a new five-week low, with the featured buyer being China (269,900 mt's); unknown destinations assigned out/rolled/canceled 62,900 mt's. And lastly, wheat sales in the week totaled (-249k) mt's, as cancelations of 272,900 mt's from Panama were featured, as well as 123,800 mt's canceled or rolled from unknown destinations. The wheat figure is curious to us following Panama being the leader buyer of US wheat last week, and has led us to question whether last week's figure was possibly an error. This is purely speculation, but the two week breakdown is interesting nonetheless. Sales of meal and oil were both within trade expectations for the week, and offered little input to their respective futures markets.
Otherwise, it continues to be hurry up and wait in the ag space, as all parties are interested in NASS's spring seeding intentions report that is due out a week from Monday. Quarterly stocks data will also be released on that day, which had a bullish lean the last time it was updated in December and caused spot futures to close 14-15 cents higher. We are not predicting this will be the case again at the end of the month, but are noting that NASS has had a seemingly hard time estimating quarterly domestic corn disappearance in recent reports, and would not be surprised to see a market moving number this go around either. And on top of that, it is impossible to predict what will happen with the proposed reciprocal tariffs between now and then, with that situation also adding uncertainty.
There's not a lot new in South America, as conditions are continuing to improve in Brazil for the safrinha corn crop, and rains are also expected to return to Argentina after a few days of dryness early next week. The Buenos Aires Grain Exchange lowered their soybean production estimate marginally this afternoon in their weekly crop update to 48.6 mmt's, but made no adjustments to their corn production figure. If there is going to be a market story from South America at this point, it is likely going to have to come from the rainy season ending early in Brazil, causing pollination issues for the second crop. Five day forecasts continue to show little change from previous days this week, and offer average to above average precip chances for the bulk of the growing regions in both Argentina and Brazil. Argentina has trended cooler since mid-week, but most of central and eastern Brazil will continue to see temps that are above average.
New seasonal outlooks from the CPC released earlier today show an expanded area of potential dryness across the northern and northwestern US, stretching into the western Corn Belt. The outlooks also show above average temperatures throughout the whole of the country, and especially in the west/southwest. Shorter term, models remain in good agreement on an additional low pressure system for the upper Midwest Sunday/Monday next week following additional light precip possibilities Friday night/Saturday morning. Week two forecasts are wetter at mid-day today, and are in good agreement on the northeastern US continuing to see above average precip potential, along with the most of the eastern US in general. There was also some divergence on temperature forecasts at mid-day today, with the GFS now seeing cooler air staying further to the north next week than was seen yesterday and overnight. 10-15 day maps are warm throughout the country, which is making it appear likely that April will see a warm start.