PM Comments April 21 2025
Good afternoon. Easter Monday produced a slow day of trade across the ag space to start the week, with markets drifting quietly lower into the close amid a continued lack of volume due to much of Europe and Asia still being away for the holiday. An overnight rally based on what we assume was a perceived win on the USTR port fee situation was unable to sustain momentum into the day session with fund traders unwilling to further push values above chart-based resistance.
CK closed Monday at 4.81 and 3/4, down a half cent. CN was down a quarter cent at 4.90. SK started the week 7 cents lower at 10.29 and 1/2. SN closed at 10.41 and 1/2, down 6 and 1/4. WK finished at 5.38 and 1/2, down 10 and 1/4. Products were lower, May soybean meal closed at 292.90, down $2.70/ton, and May soybean oil closed at 47.82, down just 5 points. Cattle markets ended their winning streaks Monday, as June live cattle closed at 203.75, down 32 cents, and May feeders closed at 285.52, down $1.32; June hogs finished 2 cents higher at 98.05. All three made new highs for the move this morning. Outside markets have spent the day mostly lower, crude oil futures are down $1.10-1.20/bbl, the Dow Jones index is down 1,200 points, and the US$ index is down 105 points; the S&P500 is down 160 points, and the NASDAQ is down 580 points. New contract lows for the June $ index today at 97.68. Gold futures, inversely, are up around $110/oz and have again made new all-time highs; the new June contract high is at 3,442.30.
Spreads closed mixed on Monday, corn spreads were up a penny and a half to down a penny, and soybean spreads were up a penny and three quarter to down 5 and 1/4. CK/CN closed at -8 and 1/4, down 1/4 of a cent, and SK/SN closed at -12, down 3/4 of a cent.
Like we mentioned at the top, trading became largely technical throughout the day on Monday, as the fundamental news cycle was slow. Starting with old crop corn, resistance in the May contract this week is going to be seen first between 4.90 and 4.91, which is the high water mark from the run up seen in the first 10 days of April and also just above today's high at 4.87 and 3/4. Above here, the even $5 level will be the next hurdle, with our assumption being the last little batch of old crop bushels from the farmer likely shakes lose should the board get here. Above $5, the February high at 5.18 and 3/4 would be the biggest upside objective. On new crop corn, upside objectives rest between 4.70 and 4.80, while we similarly see a shot up to $5 as a selling opportunity should it occur. Flipping to soybeans, old crop resistance will be two-fold this week, with the 200-day moving average at 10.40 and 1/4 and also the recent high at 10.49 and 1/2 each serving as fairly formidable hurdles. Then further up, the late winter high at 10.92 and 1/2 will be the next upside objective, with the even $11 mark not far above here. New crop futures also have to contend with the 200-day moving average, which is notable due to the presence of a pretty sizeable chart gap that was left from the last time the November contract traded above here on the last trading day of 2023.
Export inspection data was the one point of interest on the fundamental side during market hours, with the USDA's weekly crop progress report not being released until a bit later this afternoon. The inspection data though for the week ending April 17th was better than expected for both corn and wheat, while being in expectations but still decent for soybeans. Corn inspections in the week totaled 1.703 mmt's, down 7% from last week, soybean inspections totaled 551k mt's, down just 0.7% from last week, and wheat inspections totaled 510k mt's, which was down 17% from last week. Seasonally, weekly corn exports have remained stronger than normal, while those of corn and wheat have been near normal levels for this time of year.
White House news for Monday, which has for lack of a better term become standard content for the 'C block' these days, was relatively quiet, though there was another now apparently fake news report that had to be disputed by Press Secretary Karoline Leavitt and other White House social media channels. News agency NPR reported that President Trump had begun a search for a new Secretary of Defense following weekend news that the current holder of that position, Pete Hegseth, had again leaked classified information in a Signal app chat on his personal cell phone with his wife and brother regarding strikes on Yemen's Houthi militant group. The story comes just several weeks after Hegseth was in the news for accidentally leaking similar details of strikes in a different Signal chat with a journalist. Leavitt told reporters later in the day that the President stood strongly behind secretary Hegseth, and denied the report that any search to replace him was underway. Trump also spoke to reporters on Monday, and said there was a "good chance" for a peace deal between Russia and Ukraine this week, while also mentioning a possible meeting with Europe over the matter on Wednesday.
US weather forecasts coming out of the weekend don't see a ton of change compared to how we went home last week, but are beginning to show signs of change in the overall pattern, with the progressive ridging/troughing that has been present through the first half of April appearing to become less pronounced into the end of the month. In the short term though, a moisture corridor through the mid-south and extending over into the southwestern Plains looks to stay active at least into next week, with the 12Z GFS run calling for another 1-2" of precip through these areas. The northern Corn Belt also sees scattered precip over the next week, but totals will be a lesser 0.1-0.5" generally, with coverage also being more spotty. New maps for week two show continued above average precip chances in the northern US, but now also show a drier bias through the southeast and up most of the east Coast into the first week of May. Temperature outlooks saw no change the last 72 hours, with models remaining in good agreement on above average temperatures for most all of the country in both the 5-10 and 10-15 day periods. Short term this week, there will be some cooler air present in the northern Plains, but for the most part, temps will be normal to above normal.
Our local sources in Brazil say recent rains over the last week or two have been extremely beneficial, and in some cases have likely done enough to get some of the earlier planted corn through to harvest. This, along with further expected precip of up to 2.5" for most of the southern growing regions over the next week, has significantly lessened the chances of a board rally based on late-season dryness in Brazil. Forecasts for Argentina also remain near-ideal, as warm and dry weather allows for good harvest activity to occur into the end of the month. Southern hemisphere weather is quickly becoming a non-factor to futures prices at the CBOT.