PM Comments March 26 2025
Good afternoon. CBOT markets continued to have a holiday-like feel at mid-week on Wednesday, as volume remains highly constrained throughout the space due to next week's coming fundamental events. Usually when the markets are this slow its because traders are making preparations for either Turkey day or Santa Clause, but that is not the case in almost April; and preparations for the big, bad Tariff Man do not engender the same warm, happy, feelings as they do for those other events.
CK closed Wednesday at 4.51 and 1/4, down 6 and 1/2 cents. CN was down 6 and 1/4 at 4.59. This the lowest close in both since the spike low made on March 4th. SK closed at 10.01, down 3/4 of a cent. SN finished at 10.15, down a half cent. WK was down 8 cents at 5.35 and 1/4. Also the lowest close in wheat since March 4th. Products were mixed, May soybean meal closed at 293.60, down $1.50/ton, and May soybean oil closed at 42.64, up 34 points. Livestock markets finished Wednesday higher, April live cattle closed at 207.07, up 70 cents, April feeders closed at 285.87, up $1.02, and April hogs closed at 87.55, up 90 cents. Outside day higher for April hogs. Outside markets are mixed, crude oil futures are up 60-70 cents/bbl, the Dow Jones index is down 170 points, and the US$ index is up 30-40 points. The S&P500 is down 70 points and the NASDAQ is down 380 points. New highs for the move for the fourth straight day in crude oil.
Spreads were mixed/lower on Wednesday; corn spreads were down a quarter of a cent to down 2 and 3/4 cents, and soybean spreads were down a penny to up a penny. CK/CN closed at -7 and 3/4, down 1/4 of a cent, and SK/SN closed at -14, down 1/4 of a cent also.
Not going to spend a lot of time discussing the continued lack of volume, as it has been the case all week and more than likely will only get worse between now and the end of the day on Friday. Volume or no volume, it appeared selling in the feed grain markets was centered on ideas that the original Black Sea Grain Initiative could be revived as part of the peace talks involving the US. We mentioned it briefly this morning, but will reiterate that any such revival would be largely viewed as a political move, and would have little actual impact on the amount of grain that is or isn't able to transit the Black Sea region. Because of this, we see today's downside pressure as maybe being slightly overdone, and would not be surprised to see a bit of a recovery bounce occur at least through the overnight hours this evening.
Ethanol data from the EIA this morning showed a drop-off in production from the week prior to the lowest daily average level since the week of January 24th at 1.053 mil bbls/day; this was down 4.7% from the week prior but up 0.06% from the same week last year. Stocks for the week came in at 27.35 mil bbls, which was up nearly 3% from last week and up 5.2% from the same week last year. We estimated corn use in the week at 104.04 mil bu's, which is also a new eight week low; cumulative corn use in the marketing year has reached 3.091 bil bu's, compared to 2.990 bil last year and the USDA's full marketing year forecast of 5.550 bil bu's. The EIA report also showed petroleum and petroleum product stocks data for the week; crude oil stocks were seen declining 3.341 mil bbls to 433.627 mil, gasoline stocks were down 1.446 mil bbls to 239.128 mil, and distillate stocks were down 421k bbls to 114.362 mil. Implied gasoline demand in the week was estimated at 8.643 mil bbls/day, compared to 8.817 mil last week and 8.715 mil in the same week last year.
Other headlines on Wednesday once again included tariffs, as President Trump announced this morning that he would be making an announcement at 3pm central time this afternoon regarding auto tariffs on vehicles coming into the US. The President had previously mentioned that these duties would be part of the package announced on April 2nd next week, but had hinted on Monday that they might be separated, which appears to have ultimately been the case. There were not a lot of details in the announcement made by White House Press Secretary Karoline Leavitt, including whether the new measures would actually be going into effect today/tonight, what the actual rate would be, or what countries would be affected, with her indicating that Trump would have those details in his press conference later this afternoon.
Weather news continues to be mostly limited, as forecasts for both the US and South America remain largely unchanged through the rest of the week and into the weekend. Starting in the US, models continue to be in good agreement on continued scattered precip/thunderstorm activity through the rest of this week and weekend, with a good portion of the Corn Belt expected to receive around an inch of accumulated precip over the next five days. Exact amounts/locations will be hard to predict due to the convective nature of some of the systems and also the varrying wind speeds, but it appears generally speaking, that a lot of the Midwest will continue to see builds in soil moisture over the next 10 days. Also not a lot of change in South America, where rains are expected to continue expanding across southern Brazil and also most of Argentina over the next 7-10 days. Week two maps show things turning a bit drier again after the first of April, which means coming moisture builds are quite important.