PM Comments April 16 2025
Good afternoon. Grain markets in Chicago closed quietly higher on Wednesday, as limited volume and optimism surrounding the rhetoric with China produced a morning board of trade rally that faded into the close. The looming three day holiday weekend has caused a noticeable slowdown in price action the past couple days due to the fact that nearly 80 hours without markets is a long time, and nobody wants to get caught being positioned the wrong way should a headline come out during that time regarding some sort of trade deal or other development.
CK closed mid-week at 4.84 and 1/4, up 3 cents. CN was up 2 and 1/4 at 4.91 and 3/4. Inside day for both. SK closed at 10.38 and 3/4, up 2 and 3/4. SN as up 3 and 3/4 at 10.50 and 1/4. Outside days higher for both here. WK finished 5 and 3/4 higher at 5.47 and 3/4. Products were higher also, May soybean meal closed at 296.70, up $2.50/ton, and May soybean oil closed at 47.48, up 15 points. Inside day for bean oil also. Livestock markets ended the day higher, June live cattle closed at 207.07, up $2.27, May feeders closed at 284.40, up $1.87, and June hogs closed at 97.95, up $2.77. New rally highs in all three. Outside markets are sharply mixed, crude oil futures are up $1.20-1.40/bbl, the Dow Jones index is down 700 points, and the US$ index is down 80-90 points; the S&P500 is down 120 points and the NASDAQ is down 550 points. Gold futures are up more than $115/oz and have made new all-time highs in the June contract at $3,358.40/oz. Outside day higher for crude oil.
Spreads were mixed, corn spreads were down a half cent to up a penny and a quarter, and soybean spreads were down 2 and 1/2 cents to up 2 and 1/2 cents. CK/CN closed at -7 and 1/2, up 3/4 of a cent, and SK/SN closed at -11 and 1/2, down a penny. CU/CZ matched its contract low at -9.
Ethanol data from the EIA's weekly report this morning leaned a little bearish, as production for the week ended April 11th registered at the second lowest level of this marketing year at just 1.012 mil bbls/day; this was down less than 1% from last month, but was down more than 4% from the same week last year. As such, the weekly corn grind figure also failed to crack the 100 mil bu/week mark for only the second time this marketing year also, coming in at 99.99 mil bu. This puts cumulative marketing year corn usage at 3.397 bil bu, which compares to 3.307 bil bu last year and the USDA's full marketing year forecast of 5.500 bil bu. Of note, corn grind is still above the pace needed to reach the USDA's goal, with the downturn in production runs seen the last two weeks being largely seasonal in nature. On the stocks side, EIA pegged US ethanol stocks in the week at 26.814 mil bbls, which was down less than 1% from last week but still up more than 2% from the same week last year. On the petroleum side, crude oil stocks increased 515k bbls on the week to 442.86 mil, while gasoline stocks were down 1.958 mil bbls to 234.019 mil, and distillate stocks were down 1.851 mil bbls to 109.231 mil. Implied gasoline demand in the week was estimated at 8.462 mil blls/day, compared to 8.425 mil last week and 8.662 mil last year.
Otherwise, a hoped for announcement from the US Trade Representative's office tomorrow regarding the proposed port fees on Chinese built/owned/operated vessels and the previously mentioned Easter holiday this weekend were the main themes in the markets on Wednesday. On the port fee situation, we have little insight as to what may be announced tomorrow. However, we do know that regardless of what is announced, there will be an implementation phase following the announcements that is expected to last until mid-May, at which point there will be another hearing to announce a final determination. Then, there would be an additional 180-day period in which the fees would begin to be charged which would make it roughly mid-November before the entire package would be finalized and functioning. The other 'positive', or at least potential positive, as it pertains to the US farmer and US ag in general, is the fact the executive order that Trump signed last week that originally had the text for tonnage based fees on Chinese-built or flagged vessels did in-fact not have this text in its final draft, which to some would appear to indicate that industry comments expressing displeasure in the new fees had not landed on deaf ears. The order that was signed basically gave the USTR the option to take action if it deemed necessary, but did not require such action as was the case in the original draft.
Other news on Wednesday included comments from US Federal Reserve Chair Jerome Powell, who spoke at the Economic Club of Chicago and whose comments generally caused the sell-off in the stock index futures this afternoon. Powell told attendees that the US economy was still in a solid position, but added that the data currently available would say growth has slowed in the first quarter so far this year compared to the pace seen last year. Chairman Powell also mentioned that the tariffs announced were higher than the Fed had anticipated, adding that they had ran models with higher tariffs and the actual levels were even above these. This, he added, would potentially lead to inflation increasing and growth slowing further, depending on how long it takes for costs to be passed through. Overall, Powell really didn't offer anything different from other comments he's made since Trump retook office, reiterating that the Fed would not be influenced in its decisions by political pressure.
The GFS trended slightly wetter in eastern Kansas in the mid-day run, and has come into more agreement with the EU run at mid-day. The EU model is still showing a pocket of heavier precip through Iowa/Minnesota/Wisconsin that is not seen in the other models, but otherwise, there is better agreement on rains of 2-5" for an area stretching from northeast Texas though Oklahoma/Arkansas, Missouri, and southern Illinois. Week two precip maps are still wet also, and show further rain potential for most all of the eastern US the week of April 24th-30th. There was no change on the temperature side at mid-day Wednesday, with models still in good agreement on a warm up for most of the country into next week as high pressure ridging takes over the central part of the country.
There was still little to no update again for the South American forecast, so will keep comments here short. Forecasts show the same wet Brazil/dry Argentina pattern for the next week that has been forecast all week, while temperatures are expected to remain slightly above average throughout the majority of both countries.