AM Comments April 2 2025

Posted on Apr 02 at 07:27

Good morning. And welcome to Liberation Day. Ag markets are seeing a bit of turn-around-Wednesday action to start mid-week trading this morning, with most all markets in the space correcting yesterday's gains. If you have 'tariffs' on your bingo card for today, you're in luck, as this will be the dominant theme for at least the next 10-12 hours, and more likely through the rest of the week this week and into the weekend. We aren't entirely sure what to expect today from an ag standpoint, with the White House Rose Garden ceremony currently slated to begin after the 1:15pm central time close in Chicago, but would assume both volatility and anxiety will be heightened throughout the session. Stay aware of headlines that could quickly change the direction of markets throughout the day today, and don't get caught asleep at the wheel. Corn futures to start Wednesday are trading 4-6 cents lower, soybean futures are trading 2-4 cents lower, and the Chicago wheat market is down 5-7 cents. Products are in the red also, soybean meal is down $2-2.50/ton, and soybean oil is down around 5 points. Outside markets are also lower, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is down 300 points, and the US$ index is down 10-15 points. The S&P500 is down 50 points and the NASDAQ is down 220 points. Gold futures are quiet and have not made new contract highs for the first time this week.

 

Today's Reports: Monthly ADP Employment; Monthly Factory Orders; EIA Weekly Ethanol Production/Energy Stocks

 

  • This morning's weekly ethanol report for the week ending March 28th is expected to show daily production in the week in a range of 1.033-1.083 mil bbls, while stocks for the week are seen in a range of 26.990-28.400 mil bbls. The high end of expectations on stocks, if realized, would be a new all-time record and obviously then also a new high for the marketing year.

 

  • The USDA released monthly corn and soybean crush data yesterday afternoon for February; the reports showed soybean crush in the month at 189 million bu's, which was down 11% from January and also down 2% from February of last year. Of note, NOPA earlier estimated soy crush in February at 178 mil bu's. Soybean oil stocks as of the end of the month totaled 1.924 bil lbs, which was up 6% from January but down 10% from Feb of last year.

 

  • For corn, corn used for ethanol in February totaled 421 mil bu's, which was down 10% from January and also down 5% from Feb last year. Total corn usage was seen at 465 mil bu's, similar down 10% on the month and down 6% on the year. To view the fats and oils report, please click here; and to view the grain crushing report, please click here.

 

  • Private US ag group StoneX on Tuesday lowered their Brazilian soybean production estimate by a little less than 1 mmt to 167.5 mmt's, citing further yield loss in the southern part of the country due to dryness. The group also trimmed their corn production estimate to 129.7 mmt's, again due to dryness in the south but also due to dryness in the northeast where more corn is grown compared to soybeans.

 

  • The President of Argentina's grain export chamber said on Tuesday that a build-up of sediment on the Paraguay River had caused delays for barges carrying soybeans from Paraguay to the port of Rosario in Argentina. He added that situation was improving due to rising water levels and dredging, but data shows soybean exports out of Paraguay in Jan-Feb were down more than 14% from 2024 despite production being only marginally lower.

 

  • There are still not a lot of details out this morning regarding yesterday's meeting between the EPA and a joint coalition of oil and biofuel producers, but sources familiar have indicated one development from the meeting was a proposal by the EPA to set blending mandates that cover a period of two years as opposed to the year period that has been proposed in recent weeks.

 

  • Ukraine's Deputy Ag Minister said in a statement on Tuesday that the country would not be expanding wheat export quotas at this time, which are set at 16.2 mmt's for the 2024/25 season, despite a relatively robust export pace over the past couple months. Data shows Ukraine wheat exports in the season have already reached nearly 13 mmt's, with the possibility at another million tons of exports being shipped in April; data shows exporters have already contracted roughly 850k tons for the month.

 

  • Purdue University's ag sentiment index fell to 140 for the month of March, down from February's 152 reading, with weaker expectations for the future being the primary driver of the decline; current conditions also declined but to a lesser extent, based primarily on lower crop prices. Of note, the 140 figure shows farmer sentiment is still significantly better than last year, when the March reading came in at 114.

 

  • Aside from this afternoon's tariff announcements, equity markets on Wednesday will also have an eye on this morning's ADP jobs survey, which is expected to show employers added 105k jobs in the month of March vs adding 77k in February. Also of note for Wednesday, Elon Musk's Tesla is scheduled to report Q1 sales later today following months of consumer distaste for his newfound political agenda; analysts see the number coming in around 390k vehicles, which is down from a January estimate of more than 460k.

 

  • Nothing new weather-wise for South America this morning; rains on Tuesday were as-forecast, with Argentina pretty much completely dry and Brazil seeing very light/limited precip in a small part of the south-central part of the country. Forecasts were little changed also overnight, and continue to show a continuation of this pattern through the rest of this week/weekend and into next week. Week-two forecasts show better rains returning to southern Argentina, while most of eastern Brazil is seen returning again to a drier pattern.

 

  • The southern Midwest and southeastern US will continue to see severe weather threats through the day today and into tonight, with the Storm Prediction Center's convective outlook for today showing the greatest risk from about Memphis up to the southern tip of IL. Precip out of this system, along with an additional system through mostly the same areas over the weekend, could cause rainfall totals to exceed 10" in some places, which will obviously lead to flooding risks.

 

  • Updates to the extended forecast were again minimal though, as there continues to be decent model agreement in a pattern shift occurring beyond the start of next week. Week two precip maps continue to show below average precip potential throughout most all of the country, while week two temp maps show above average warmth for most all of the country, especially in the west; the east will see possibly more average temps, but as the calendar hits mid-April, this still means highs will be in the 50's/60's.

 

  • Good luck with today's tariff events, and remember to keep risk management a priority as volatility stays elevated.