PM Comments April 9 2025
Good afternoon. Most markets had an abrupt turnaround to the upside today as President Trump announced a 90-day pause on retaliatory tariffs for most countries. This does not include China, as instead, the President raised its tariffs against them again today. The equity markets turned sharply higher as the DOW is set to have its biggest single day point gain ever. Livestock markets turned sharply higher and grains built on earlier gains. The index fund roll for May contracts finished up day 3 of 5 today. The USDA report and export sales are out tomorrow. Conab is out in the morning with Brazil production updates. Additional tariff clarifications and follow through confirmation from today's rally will be the talking points for tomorrow.
CK finished the day at 4.74, up 5 cents. May corn finished at the highest level since February 27th . May closed above the 100-day moving average ($4.69 1/4) and eyes the 20-day at $4.78 3/4. CN closed 5.75 cents higher at 4.80 1/2, while CZ closed 5 cents higher at 4.50 3/4. Moving to soybeans, SK finished the day at 10.1275, up an even 20 cents while SN finished 19.5 cents higher at 10.23 1/2 and SX closed 19.25 cents higher at 9.97. Soybean products were firmer with meal finishing the day $3.50 higher vs the May futures while bean oil closed 1.25 higher vs the May futures. Chicago wheat closed 2.25 cents higher vs the May futures at 5.4225. CK/CN finished the day 0.75 weaker at -5.60 while CN/CU firmed 2 cents to settle at +38.0. SK/SN had over a 3 cent range today before closing a 1/2 cent firmer on the day to finish at -10.75 while the SN/SX firmed a 1/4 cent at +26.50. Cattle markets were sharply higher on a massive turnaround with April live cattle closing up 3.70 at 202.80 while the June contract closed 4.75 higher at 198.375. Feeder cattle finished the day 3.325 higher at 283.75 vs the April futures and 6.475 higher vs the May at 278.20. Lean hogs were mostly higher with May closing 1.52 higher at 86.125 and 1.925 cents higher vs the June contract at 91.70. Energy markets reversed higher as well with June crude finishing at 61.82, up 2.72 for the day.
Earlier this week, President Trump announced additional tariffs on China, bringing the total to 104%, which went into affect today. China responded with an additional 50% tariff, which puts the total at 84% against U.S. goods. Then today, President Trump announced a 90-day pause on retaliatory tariffs, which he said would allow countries time to negotiate with the U.S. The White House did confirm that a 10% blanket tariff would remain in place. In addition, he announced that the tariff rate on China would increase again to 125%. The pause sent equity markets sharply higher and reversed most commodity markets higher as well. The EU announced its first set of retaliatory tariffs earlier today, which will start on April 15th for the 1st round. Another round is due May 15th and the exact list of products is still not known. It is still unclear as of right now if the EU will change its tune after the pause today. The trade is still awaiting clarification on increased port fees related to Chinese ships. There has been some recent discussions that the initial port fees may be softened and/or include another way of calculating them, but time will tell.
The weekly ethanol report today showed that 100.9 mln. bu. of corn was used in last week's ethanol production. This figure was down 4% from the previous week and down nearly 5% from the same week last year. This was the lowest weekly use number in 10 weeks. This week's production number was well below industry estimates. Ethanol stocks increased by 422,000 barrels from last week to just over 27 million barrels. Total corn use for ethanol for the marketing year now sits at 3.287 bln. bu., up from 3.208 bln. bu. at this point a year ago. The pace to date suggests a yearly total of 30 to 40 mln. bu. above the USDA current marketing year estimate of 5.500 bln. bu.
The USDA announced sales of 198,000 tons of soybeans to unknown destinations today for the 24/25 marketing year. China has been active in buying Brazil bean cargoes this week. Both corn and bean basis in Brazil has been weaker this week compared to last week. Ohio river logistics are still a mess due to flooding, but the situation appears to be getting better at a quicker rate than expected. Both lock 27 and Mel Price are expected to be open this week, but delays will take a few days to clean up.
The USDA crop report is tomorrow at 11 a.m. central time. This is a supply/demand report and historically does not have much lasting impact on the market. Corn ending stocks are expected to decrease to 1.510 bln. bu., which would be a drop by 30 mln. bu. from last month. Soybean and wheat ending stocks are not expected to see much change. The trade is also not anticipating much movement in South American production estimates. The USDA did not move many global trade figures last month due to the still unknown of what tariffs may be. We will see what commentary they have on it tomorrow. The March acreage figures will be incorporated in the initial 25/26 balance sheet estimates on May 12th. Conab will have out Brazil production updates in the morning.
Rain moved through a small part of the Midwest again today. Chances of rain will then decrease now through most of next week. Temps will warm slightly from here into next week. The extended forecast advertises warmer weather and more normal precip. Areas in the southern Midwest and Delta will take days to dry out and some re-plant will be needed. There is some concern about renewed rains in the Delta at the end of the two-week forecast.
South American weather forecasts are generally favorable over the next two weeks. Fieldwork progress is expected to benefit as a result. Eastern Brazil should see some dryness relief starting this weekend. The 2nd corn crop will need timely rains moving forward, especially since a portion of the crop got planted later than normal. Those areas will need seasonal rains to extend past late April this year. Argentina continues to move along with harvesting progress. In the Black Sea region, recent rains along with more predicted rains have helped stabilize the wheat crop there for now.