PM Comments April 4 2025
Good afternoon. Tariff news was the main driver of the news cycle again today as most commodity markets were down sharply to end the week. The announcement of reciprocal tariffs by China led to the declines today. Nearby corn was the exception as it squeaked out small gains with the expectation that the impact on U.S. corn exports will be limited. Livestock markets finished limit down. Expanded limits will seen on Monday for Live and Feeder Cattle and Lean Hogs. Equities were sharply lower for the 2nd day in a row. Energies were down sharply as well, but the dollar did rebound today.
CK closed Friday at 4.60 and 1/4, up 2 3/4; CN was up 1 3/4 cents at 4.67 and 1/4. Both contracts saw double digit ranges for the 2nd in row and both days ended with recovery efforts . SK closed at 9.77, down 34 1/2 cents. SN was down 33 1/4 at 9.93. May beans lost 52 1/2 cents the last trading sessions. WK closed at 5.29, down 7 cents. Soy products were lower as well, May soybean meal closed at 283.1, down $4.90/ton, and May soybean oil closed at 45.84, down 1.22 cents/lb. New contract lows for May meal were seen again today at 282.1. Livestock markets finished the day sharply lower, April live cattle closed at 202.625, down $5.425, April feeders closed at 279.425, down $5.975, and May hogs closed at 85.125, down $3.45. Livestock markets will have expanded limits on Monday as most of the deferred contracts finished limit down. Limits for Monday will be as follows: Live cattle $9.75; Feeder Cattle $12.25, Lean Hogs $6.00. Outside markets have spent most of the day sharply lower; crude oil futures are down $4.50/bbl and the Dow Jones index is down 2,050 points. June crude lost $9.58 in two days. The US$ index did rebound today and is currently up 980 points. Gold futures were down $80/oz.
Spreads were mixed, corn spreads finished the day firmer, while soybean spreads were weaker. Wheat spreads were mostly firmer. CK/CN closed at -7, up one cent, and SK/SN closed at -16, down 1 1/4 cents. CZ/CH closed a quarter cent higher at -13 and 3/4. SX/SF made a new contract low on Friday and closed at -14.
For the week, May corn gained 7 cents. December corn gained 4 1/4 cents. May beans lost 46 cents and November beans lost 44 3/4 cents. May meal was down $10.40 and May bean oil was up 68 points. May wheat was up 3/4 cents for the week.
Fund activity today thought to include selling of nearly 20,000 contracts of beans, 5,000 bean oil, and 3,000 meal. Funds sold 3,000 contracts of corn and 4,000 wheat. The commitment of traders' report this afternoon (data through Tuesday) showed corn funds long 56,757 contracts, down 17,850 contracts from the previous week. Bean funds were short 29,847 contracts and showing net buying of 13,112 contracts. Chicago wheat funds were net short 112,040 contracts, an increase in net shorts of 19,453 contracts.
China announced 34% reciprocal tariffs overnight, which are expected to start on April 10th. This response announcement more directly affected commodities today, versus the impact on prices yesterday. Soybeans were especially hit hard today on concerns that the U.S. will now be uncompetitive on soybeans into China. This is a slow time for U.S. export bean demand into China, so the hope will be that this tariff battle is cleaned up by fall when the U.S. relies more heavily on Chinese buying. Nearby CIF beans were bid lower today by 5 to 6 cents. President Trump responded to the China tariff response with "China played it wrong, they panicked." In other tariff news, the EU is said to be preparing its own response to the new tariffs. President Trump did have a call with Vietnam today and reported that the country is interested in working out a trade deal. Tariff responses and trade negotiations will dominate the market headlines over the next few days. Does this week's tariff announcements, which were broader and bigger than expected, raise the expectation that the proposed USTR port fees get announced as well?
Weather forecasts have taken a back seat late this week, but are largely the same. Heavy rains continue to impact the southern Midwest and Delta. Those rains will persist through the weekend. Cooler temps will hang over the Midwest through next week. It will trend a bit drier for most of the corn belt next week. This will allow for some isolated fieldwork to resume, favoring the western Midwest. As the forecast moves towards the middle of April, the outlook is for a drier and warmer profile. Assuming this holds up, there will be an active push to get corn and beans planted. As the month moves on, the trade will be debating if the NASS corn acres number at 95.3 Mln. can be achieved. Increases in the Delta will be debated, but the planting window is longer there. Interesting to note that the new crop corn/bean ratio has fallen apart again in favor of corn. It closed the week near its recent low at 2.21, which is after a spike to 2.33 in late March.
The payrolls report this morning showed 228,000 jobs added in March, This was better than the expectation of +140K. The unemployment rate did tick up slightly to 4.2%. FED Chairman Powell made comments in response to the tariffs today. He predicts that the U.S. is likely to face a period of higher prices and weaker growth due to the tariffs. Despite those concerns, he noted that the FED will be patient in any interest rate response until more is known. President Trump did state that he would like to see the FED be more aggressive and lower rates.