AM Comments April 9 2025
Good morning. Futures in the ag space have again spent most of the overnight session trading higher to start mid-week, with spot corn and soybeans looking to make it three consecutive closes in the green this week despite the outside market carnage that has largely continued into a fifth day. Stock index futures have spent most of the night session trading lower but have so far held Monday's lows again, but its crude oil and the dollar index that have taken over the role of anchor at least early on Wednesday, with crude having made new lows for the move and the dollar index having gapped lower to start last night. Focus today will largely remain centered on these other markets and the ongoing volatility there, as has been the case all week, but then tomorrow will at least momentarily become more narrowed, as traders will hone in on the April WASDE report which is due out at 11am central time. We find it likely, however, that unless the USDA makes some kind of notable adjustment in the data, which is not expected, attention will quickly revert back to the outside market happenings shortly after the numbers are released. Corn futures to start Wednesday are trading unchanged to a penny higher, soybean futures are trading mixed, and the Chicago wheat market is up around a penny. Products are mixed, soybean meal is up $2-3/ton, and soybean oil is down 80-90 points. Outside markets are mostly lower, crude oil futures are down around $3.60/bbl, the Dow Jones index is down 800 points, and the US$ index is down 70-75 points. The S&P500 is down 100 points and the NASDAQ is down 320 points; gold futures are up $80-90/oz.
Today's Reports: EIA Weekly Ethanol Production/Energy Stocks; FOMC Meeting Minutes
- This morning's weekly ethanol production report from the EIA for the week ending April 4th is expected to show daily production for the week in a range of 1.043-1.073 mil bbls, while stocks are seen in a range of 26.0-26.9 mil bbls. Of note, the actual stocks figure has fallen outside the range of trade estimates for the last four weeks.
- For tomorrow's April WASDE report, which will be the last before the first 2025/26 numbers are released next month, traders expect old crop corn and soybean ending stocks to come in fairly close to the March figures, at 1.510 bil bu's and 379 mil bu's respectively; wheat stocks are also seen similar to last month at 825 mil bu's. At the world level, traders see global corn stocks at 288.2 mmt's, while global soybean stocks are seen at 122.1 mmt's and wheat stocks are seen at 260.4 mmt's; again, these would all be similar to figures seen in March.
- Changes in South American production estimates also look to be rather minimal, as traders see estimates for both corn and soybean production in Argentina likely coming in slightly lower on the month to 49.3 mmt's for corn and 48.8 mmt's for soybeans; in Brazil, corn production is also seen declining slightly to 125.9 mmt's, while soybean production is seen ticking up just a hair to 169.1 mmt's.
- Export data out of the EU continues to show wheat exports lagging last year's pace due to decreases in production, with the most recent figures showing exports through April 6th at just 16.4 mmt's, compared to 25 mmt's last year. The data also shows barely exports down 19% at 3.91 mmt's, while corn imports are up 13% at 16.21 mmt's. The EU's 2024/25 marketing year ends on June 31.
- Sources familiar with the matter say shipping data shows Chinese buyers have bought 52,000 tons of Indian rapeseed meal in the past three weeks, which is more than quadruple their entire import amount from the 2024 calendar year. The new business is the direct result of 100% tariffs from China on imports of the oilseed from Canada, which went into effect on March 20th. In 2024, China imported 2.02 mil tons of rapeseed meal from Canada.
- Sources have also indicated that top-ranking Chinese officials plan to have meetings as early as today to discuss measures to boost the economy and stabilize financial markets, but otherwise, no official response has been made to the new/increased tariffs announced by Trump yesterday that went into effect sometime in the last 24 hours. The country's central bank has also asked major state-owned to reduce US dollar purchases.
- The coalition of US oil and biofuel producers that has been in the news recently has officially proposed a blend mandate of 5.25 billion gallons to the EPA for 2026, which is slightly below the previously estimated range of 5.5-5.75 bil gallons, but is still well up from 2025's mandate of 3.35 bil gallons. The EPA is expected to set a figure for both 2026 and 2027, but sources don't expect this decision to be made until likely late summer or early fall.
- US weather forecasts are continuing to offer additional light/scattered precip through the eastern/southeastern US the rest of this week and into the weekend, while the western portion of the Midwest looks to remain in a mostly drier pattern into next week. Beyond here, week two forecasts are trying to bring precip back to the eastern half of the country, but there is minimal model agreement which is keeping confidence low; there is good agreement on the west staying drier though, which looks likely into the middle/end of April.
- On the temperature side, forecasts again trended cooler overnight in the short term, with the eastern US now expected to stay just average to maybe slightly below average over the next 5-10 days while ridging in the west allows temps here to stay mostly above average. The 10-15 day forecast shows a similar outlook, with the warmest air continuing to stay in the west and the east seeing temps that are average to maybe slightly above average.
- Satellite data for South America shows good rains were present in southern Brazil on Tuesday, with a fairly large area receiving 0.5-1.5" with some locally heavier amounts; northern/northeast Brazil and also the majority of Argentina were dry. Forecasts have added some light/scattered precip to southeast Argentina through the end of this week and into the weekend, while Brazil also expects to see just light/scattered rains through most of its growing regions into the end of the week.
- Temperatures have also trended warmer in northern Argentina over the past couple days, but forecasts still show mostly below average temps in the south. In Brazil, there has been little movement on the temperature forecasts, as models continue to show above average warmth through most of the country into the middle of April, especially in the east.