AM Comments April 7 2025

Posted on Apr 07 at 06:59

Good morning. Ag markets in Chicago are trading mixed/lower this morning as spill-over selling from the financial markets has largely continued to cast a dreary cloud over the space through most of last night's trading. Bean oil seems to again be the downside leader of the group at least early today, but the rest of the group has actually held up fairly well, with soybeans challenging and holding last week's last week's lows. The bottom line remains though that until the fear and anxiety that was present last week, and also the headlines associated with these emotions, begin to fully subside, it will be difficult for any of the ag markets to break away to the upside without something fundamentally specific happening to change sentiment. Keep in mind that amid all the outside market chaos, there is a WASDE report due out at the end of this week, which could potentially provide said fundamental spark. Corn futures to start Monday morning are trading 1-2 cents lower, soybean futures are trading mixed, and the Chicago wheat market is also mixed. Products are mixed as well, soybean meal is up $2-3/ton, and soybean oil is down 0.80-0.90 cents/lb. Outside markets are again mostly lower, crude oil futures are down around $1.40/bbl but some $1.50+ off their lows, the Dow Jones index is down 900 points but nearly 1,000 points off their lows, and the US$ index is mixed, and nearly 100 points off its lows. The S&P500 is down 130 points and the NASDAQ is down 500 points and are also both well off the lows. All three of the major stock indices had a gap-lower open to start last night. Gold futures, and most metals actually, are trading mixed/higher, with gold up $20/oz. No livestock markets yet this morning, but as we mentioned Friday, both cattle and hogs will see expanded trading limits today.

 

Today's Reports: Weekly Export Inspections; Weekly Crop Progress

 

• Friday afternoon's CFTC commitment of traders report for the week ending Tuesday the 1st showed funds in the week were sellers of another 17,850 contracts of corn (now net-long 56,757), and sellers of 19,453 Chicago wheat contracts (-112,040); funds were buyers of soybeans though, covering 13,112 contracts (-29,847). Of note, this is the largest the funds' net short in Chicago wheat has been since November of 2023.

 

• In soy products, managed money traders were sellers of 16,683 contracts of soybean meal, and were buyers of 38,856 contracts of soybean oil, making them net-short 100,733 contracts in the meal and net-short just 5,762 contracts in the oil. Of note here, this is the largest fund short position in meal on record, while last week's buying in oil was the largest for any week since the week of January 14th.

 

• According to French crop group FranceAgriMer, soft wheat conditions in the week ending March 31st improved 2% to 76% g/ex, which is now 11% ahead of conditions on the same date last year. On a related note, the USDA is set to resume releasing its national-level crop progress reports for the US this afternoon, with the first report of the season due out at 3pm central time. Data will be mostly wheat related to start, but as is the case every year, will evolve to include planting progress for corn and soybeans as that data becomes relevant in the coming weeks.

 

• Argentine ag export group Vicentin over the weekend announced that it would be shuttering operations at its soybean crush plants due to a lack of contracted supply which is a result of the company's bankruptcy proceedings. The announcement comes following the group's inability to pay worker's wages just a few weeks ago that made news headlines, but spokespeople for the group say they plan to resume operations once the legal proceedings are resolved.

 

• In addition to 34% tariffs on US goods announced by China last week in retaliation for Trump's new measures, sources familiar say China has also over the weekend suspended chicken product imports from two American companies, as well as imports of sorghum from another company and a form of feed meal from three others.

 

• Sources familiar have indicated that protests and other logistical issues in Brazil's north have delayed soybean shipments from the area to ports further down river. The protests, led by the area's indigenous Munduruku people, are over a law started in 2023 that limits the group's land rights. Spokespeople say trucks with pre-scheduled access have not experienced delays, but that the protests still hinder around 12,000 tons of soybeans from reaching their destination per hour.

 

• Speaking to reporters aboard Air Force One over the weekend, President Trump indicated that there would be no trade agreement signed with China unless the current trade deficit is addressed. He added that price action in the stock market was more or less expected, and that "some day people will realize that Tariffs, for the United States of America, are a very beautiful thing!" Both he and Treasury Secretary Bessent also warned other countries not to retaliate against the new measures or they would risk further escalation.

 

• In other tariff-related news, Israeli Prime Minister Benjamin Netanyahu is scheduled to meet with Trump at the White House later today to discuss a trade deal, as well as presumably the ongoing conflict in Gaza among other things; Israel was tagged with 17% tariffs last week in Trump's announcement. Vietnam and Taiwan have also tried make deals with Trump, with the first offering to erase all trade tariffs on US goods, while the latter indicated intent to remove long-standing trade barriers with the US and increase investment here.

 

• 7-day US precip maps show last week's rains in the south-central part of the country totaled 13-14" through a fairly large area in the southern Midwest, while areas to the south closer to the Gulf saw a more general 2-3". Noted rains also filled in over parts of the TX/OK panhandle and also parts of NM in the southwest, which were among the driest areas in the country according to last week's drought monitor.

 

• Forecasts for this week are in fairly good agreement on a return to drier conditions in the southwest though and most of the country's mid-section in general, while rains are seen returning to the northwest and also lingering for another couple days along the East Coast as this weekend's Midwest/mid-south system works its way into the Atlantic. Week-two forecasts over the weekend trended slightly wetter in the mid-south and the northeast, but continue to show dryness in the west and also through most of the southeast into April 20th.

 

• Argentina saw better than expected rainfall over the last 72 hours, with satellite data showing a majority of the country's eastern growing regions receiving trace amounts to a half inch of rain. Brazil saw dry conditions in the south, with light rains in the south-central part and better rains to the north and west. Forecasts have added rains to a pocket in east-central Argentina for this week, while also trending drier through most of Brazil. Better rains are seen returning by the weekend and into next week, but this will need monitoring over the next few days.