AM Comments April 11 2025
Good morning. Happy Friday. Ag markets are again mostly higher in early morning trade today, with all three of corn, beans and wheat having quietly made new highs for the week again overnight. It has been impressive this week that the ag space has been able to separate itself from the broader outside market panic, which seems to have underscored the somewhat bullish fundamental situation that exists in these markets as we go into the US planting season. Balance sheets aren't desperately tight, but they also aren't lose, which means any potential loss of production from any of the world's major producers will likely be felt rather quickly from a price standpoint. On the other hand, headline risk from the ongoing geopolitical situation is not going away any time soon, which presumably keeps volatility elevated in the short term. As we've said before, we would recommend having a plan in place for large potential price swings in either direction, as its simply hard to predict these days what direction the next headline will push markets. Corn futures to start Friday trade are 1-2 cents higher, soybean futures are 1-4 cents higher, and the Chicago wheat market is up 6-7 cents. Products are mixed, soybean meal is down $1-2/ton, and soybean oil is up 30-40 points. Outside markets are also mixed, crude oil futures are down 20-30 cents/bbl, the Dow Jones index is up 100 points, and the US$ index is down 100 points. The S&P500 is up 20 points and the NASDAQ is up 90 points. The $ index gapped lower and has made new contract lows this morning, and gold futures are up another $50-60/oz and made new contract highs last night.
Today's Reports: Monthly PPI; CFTC Commitment of Traders
- Yesterday's April WASDE report did not offer a lot to traders, but did continue to show slightly tighter balance sheets from last month on both corn and soybeans as demand has stayed solid through the opening days of spring. As a reminder, next month's WASDE report will transition to the 2025/26 crop year, which will give us our first look at balance sheets for the upcoming season. To view yesterday's April report recap, please click here.
- Conab, which is Brazil's USDA equivalent, also offered little of note yesterday in their monthly crop report; the group raised soybean production a half a million tons to 167.87 mmt's, and also raised corn production by about 2 mil tons to 124.74 mmt's. Unlike last year, these figures are mostly in-line with the USDA, who has Brazilian soybean production pegged at 169.0 mmt's, and corn production pegged at 126.0 mmt's. To view our Brazilian production maps, please click here.
- Other news out of Brazil for Friday includes reports that farmer selling of the 2024/25 soybean crop has reached a record for this point in the season, with private consultancy Datagro saying farmer selling has reached 88.2 mmt's through the end of March, which would be more than half of the expected roughly 170 mmt's that are expected to be harvested this year. Separately but along the same lines, spokespeople from Brazil's top port of Santos have indicated plans to expand their cargo capacity by more than 2/3's over the next 10 years.
- Lastly from Brazil, several sources familiar with the matter say China bought upwards of 40 cargoes of Brazilian soybeans totaling nearly 2.4 mmt's in the first half of this week, with delivery dates of mostly May, June and July. This total represents about a third of the country's normal monthly crush volume.
- In the latest on the ongoing tariff saga, China announced overnight that it would be raising tariffs on all US goods from 84% to 125%, while also adding that Washington's actions were a "joke" and that it no longer considers them worth matching. The Ministry of Finance gave a statement Friday saying, "Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinses exports, China will disregard such measures."
- The Buenos Aires Grain Exchange late on Thursday released their weekly crop progress update, which showed corn harvest having advanced just 3% over the past week to 23.1% complete. Soybean harvest, in the first estimate of the season, was pegged at 2.6%. The group made no production estimate updates, and is now about 3 mil tons above the Rosario Exchange on soybean production; their corn figures are similar and within a half a million tons of each other.
- According to the USDA, barge shipments down the Mississippi River in the week ending April 5th totaled 367k tons, which was down nearly 47% form the week prior; corn shipments were down 45% on the week at 221k tons, and soybean shipments were down 51% on the week at 126k tons. STL barge rates fell 96 cents on the week to $16.12/short ton.
- Otherwise, aside from tariff talk and the ongoing volatility resulting from it, financial markets in the US will have one eye towards this morning's monthly producer price index report, which is expected to show prices in the US during March rose 0.2% following an unchanged reading in February; this would equate to a 3.3% increase on an annual basis, compared to 3.2% last month.
- US weather through the weekend will be mostly quiet, as a majority of the Midwest and Corn Belt is expected to see limited precip and cooler temperatures. Getting into next week, northern areas look to see some scattered rain/snow potential through the first part of the week, with another system then seen moving through the area the back half of the week Thursday/Friday. Week two forecasts trended wetter over night through the central US, but still see significant dryness remaining in place through the West Coast and also the lower southeast.
- Temperature forecasts still show mostly cooler than average temps in the east through the weekend and most of next week while the west looks to stay warm, but then see the western ridge progressing east by next weekend and into the week following, which should allow warmer air to re-emerge for most of the country.
- Rainfall through the weekend in South America will be a bit hit or miss, with areas in Argentina's south expected to see just light/scattered precip over the next 72 hours, while most of Brazil's growing regions aside from a small pocket in the west-central part of the country also look to see just scattered precip. Forecasts still moisture improving into next week, but how this forecast progresses through the weekend will need monitoring. There was little/no update on the temp side overnight, with Argentina remaining cool and Brazil remaining warm.
- Have a good weekend! The next couple days should provide an opportunity for the trade to catch its collective breath following extreme price swings seen throughout the week this week in the outside markets, but we do not expect the volatility to subside any time real soon.