PM Comments April 11 2025
Good afternoon. Happy Friday. Corn and soybean markets made it a perfect five for five to the upside this week at the CBOT, as higher closes on Friday have left spot prices at their highest level since late February. Despite all the noise and everything going on geopolitically in the outside markets, the fundamental situation for the grains continues to look friendly in the short term due to further shrinking carry outs as a result of strong demand.
CK ended the week at 4.90 and 1/4, up 7 and 1/4. CN was up 8 and 1/4 at 4.97. New highs for the move again for both. SK closed at 10.42 3/4, up 13 and 3/4. SN was up 16 and 1/4 at 10.53. New highs for the move here also. WK ended the week at 5.55 and 3/4, up 17 and 3/4. Products were higher, May soybean meal closed at 299.60, up $1.70/ton, and May soybean oil closed at 47.35, up 1.03 cents/lb. Livestock markets also ended the week higher, June live cattle closed at 196.80, up $1.60/ton, May feeders closed at 278.70, up $3.40/ton, and June hogs closed at 93.32, up 15 cents. Inside day for both live cattle and hogs, and an outside day higher for feeders. Outside markets are mixed/higher, crude oil futures are up $1.30-1.50/bbl, the Dow Jones index is up 670 points, and the US$ index is down 70-90 points. The S&P500 is up 90 points and the NASDAQ is up 330 points. Inside day for crude oil and all three of the major stock index futures, while the $ index saw another gap-lower start last night and fell to new contract lows at 98.80 during the day session. Gold futures inversely gapped higher on the open last night, and made new contract highs at $3,263.0/oz in the June contract.
Spreads were mixed to lower to wrap up the week; corn spreads finished 3/4 of a cent higher to 2 and 1/2 cents lower, and soybean spreads were up 5 and 1/4 to down 7 cents. CK/CN closed at -6 and 3/4, down a penny, and SK/SN closed at -10 and 1/4, down 2 and 1/2 cents. SK/SN traded to its highest level since last June, and CN/CU traded to its highest level since June of 2023.
For the week: May corn was up 30 cents; July corn was up 29 and 3/4 cents; May soybeans were u 65 and 3/4 cents; July soybeans were up 60 cents; May Chicago wheat was up 26 and 3/4 cents; May soybean meal was up $16.50/ton; and May soybean was up 1.51 cents/lb.
USDA this morning announced daily sales flashes for third time this week, as private exporters reported sales of 121,000 mt's of soybeans for delivery to unknown destinations; of the total, 55,000 mt's is for delivery during the 2024/25 marketing year, and 66,000 mt's is for delivery during the 2025/26 marketing year. Of note, cash sources are indicating the sales are rumored to be to an EU crusher.
What a week. There have been few periods in modern market history that have seen as much volatility as markets saw this week and the back half of last week. Daily price ranges in the major stock index futures exceeded those during the Covid-19 pandemic, while moves of 2-4% in either direction became common place in other commodities like gold and crude oil. While we don't expect these wide-swinging daily moves to remain commonplace forever, we would assume they at least have the potential to hang around into next week, as headlines will continue to give algorithms fits. We are also curious as to what China's comments regarding further tariff escalation actually mean; it would seem peculiar that the two sides would go from near daily back-and-forth escalation over the past week to 10 days to a near stand-still, but that is what comments made overnight last night would seem to indicate. The Trump administration will sure have some sort of response over the weekend, which likely keys market direction Sunday night into Monday.
Wheat futures led the charge in the grain markets on Friday, as a concerning weather forecast for the Black Sea region has caused funds to presumably actively cover shorts in recent days; keep in mind though that this is more likely to show up in next week's commitment of traders report, as the data lags the market by about a week. Forecasts show little to no rainfall for the area over the next 10-15 days, while 30-day % of normal rainfall has already been less than 25% of average throughout most of the region. Other news included further discussion surrounding massive sales of soybeans by the Brazilian farmer this week, which are likely the result of Trump's trade war with China and a sharply lower US$ index; remember, the Brazilian farmer buys inputs for his crops in Brazilian Reals, but then sells that crop in US dollars, meaning a declining $ in relation to the Brazilian Real is a positive regardless of market prices are doing.
Otherwise, there wasn't a lot new in the ag space to wrap up the week. CFTC commitment of traders data, that we eluded to earlier and was released after the market close today, showed funds as of Tuesday, April 8th were net-long 53,448 combined contracts of corn futures/options, which was down just 3,180 contracts on the week. The report also showed funds were net-short 50,447 combined contracts of soybean futures/options (-20,600 on the week), and also net-short a combined 102,132 contracts of Chicago wheat futures/options (+9,909 on the week). In soy products, funds were buyers of 3,102 contracts of soybean meal, which makes them net-short 97,630 contracts, and were buyers of 35,887 contracts of soybean oil, which makes them net-long 30,125 contracts in this market.
US weather forecasts heading into the weekend have continued to trend wetter in the back half on Friday, with week two outlooks now showing above average precip chances through most of the central US following a few more days of drier conditions into next week. It will be interesting to see if this shift is still there to start next week, but for now, it appears the current dry spell will be short-lived. Temperature-wise, there continues to be good model agreement on the cool east/warm west pattern that is in place currntly hanging around for another 5-10 days, at which point models see above average warmth moving into most of the country into the last week of the month. New outlooks from the CPC for weeks 3-4 (April 26-May 9th) that were released today show above average precip chances through most of the Corn Belt, especially in the north-central areas, while temps through much of the southern 2/3's of the country are expected to be above average.
To the south in Brazil and Argentina, forecasts continue to show decent recent rain potential through parts of both countries over the next 5 days, but coverage will be spotty and there will be areas that are changed. In Argentina, this will be a net-positive as it will allow for harvest to progress, while in Brazil, it will largely add stress to the growing safrinha corn crop, as soybean harvest has all but wrapped up. Extended forecasts again show most of Argentina turning off dryer, but show good rains returning to most all of Brazil's ag belt in the same period, which will be beneficial. There continues to be very little update from the temperature side, as Brazil into next week will remain warmer than normal but still not extremely hot, while Argentina looks to stay cooler than average.
Have a good weekend! We would advise against unbuckling the seatbelts just quite yet, though it is possible that volatility peaked on Wednesday's big reversal day. Stay tuned.