PM Comments April 28 2025
Good afternoon. Ag markets were mostly quiet to start the week on Monday with corn and soybean futures closing mixed to slightly lower, and the wheat market making new contract lows before closing at its worst level since last August on the continuation chart. Better moisture in the forecast for both the US wheat belt and also the Black Sea region was the culprit for the day's selling, while an expected jump in planting progress in this afternoon's weekly report also likely added to the selling.
CK started the week 3 and 1/4 lower at 4.75 and 1/2. CN closed at 4.83 and 1/4, down 2 and 1/4. SK as up 2 and 1/4 at 10.52. SN finished at 10.62 and 1/2, up 3 and 1/4. WK closed at 5.15 and 1/2, down 14 and 1/2 cents. New contract low at 5.11 and 1/2. Products were mixed, May soybean meal closed at 287.0, down $3.0/ton, and May soybean oil closed at 49.91, up 63 points. Cattle markets started the week higher on Monday; June live cattle closed at 209.60, up $1.35, and August feeders closed at 294.95, up 65 cents. Each made new contract highs at 209.82 and 296.25 respectively. June hogs closed at 101.00, down 15 cents, and had an outside day lower. Outside markets have been trading mostly in the red, crude oil futures are down 90 cents to $1/bbl, the Dow Jones index is up 100 points, and the US$ index is down 40-50 points; the S&P500 is unchanged and the NASDAQ is down 20 points. Outside day lower for crude oil. Gold futures have had an inside day, and are up around $60/oz.
Spreads started the week mixed, corn spreads were down 4 cents to up 3 and 1/4, and soybean spreads were down a penny and 3/4 to up 4 and 1/4. CK/CN closed at -7 and 3/4, down a penny, and SK/SN closed at -10 and 1/2, also down a penny. CU/CZ made new contract lows by a tick at -10 and 1/2.
The fundamental side of the ag space remained largely uneventful to start the last week of the month today, with the ongoing confusion surrounding a potential US-China trade deal continuing to dominate a lot of the trader conversation. Late last week and again over the weekend, Trump touted progress with the Chinese, saying the two sides had had discussions and that talks were ongoing, only for Beijing (and also Treasury Secretary Bessent) to again rebuke these comments today and say that no such talks had occurred. While both sides are aware the current situation is unsustainable, it remains unclear at this point as to just how long they may try. We see any sort of commodity-specific trade deal as remaining fairly far-off at this point due to China's lack of need for US ag products currently, but its simply impossible to predict when one of either Trump or Xi will come to the negotiating table and also what it might look like if they do. Also while on the topic, there were no announcements during market hours on Monday regarding trade deals with any of Japan, India, or South Korea, who were also all three discussed over the weekend as being possible candidates for trade deals with whom discussions had been going well.
On the farm front, a good mix of rain and sunshine has provided a solid opportunity for a lot of producers to get off to a decent start to their spring seeding campaign, with many busy with field operations for the better part of last week and through the weekend and into this week. The southern tier of the Corn Belt continues to lag other areas in terms of progress due to excessive rainfall and flooding through most of April, but it is hoped for by farmers in the area that a drier forecast for the first half of May allows crops to get planted into soils with plentiful moisture. That said, the speed at which new technology has allowed the American farmer to get seed in the ground has made it difficult to get overly concerned about planting delays until the back of half of May. And even then, good progress with good growing conditions elsewhere in the Corn Belt will likely offset this. On top of the general pessimism surrounding the trade situation with our number one buyer of ag goods, China, it is this mostly good to start to the US growing season that has also helped to pressure values over the past couple weeks.
Other news for Monday included weekly export inspection data for the week ending April 24th, which showed a seven-month high in wheat inspections for the week at 647k tons, while corn inspections totaled 1.655 million tons and soybean inspections totaled 439k tons; the soybean inspection figure was the lowest since the beginning of the marketing year. Lastly for Monday news was an EPA announcement of a 20-day waiver for the year-round sale of E15 across the US starting on May 1st and lasting through May 20th. While only for 20 days initially, it is expected by those familiar that the waiver will be repeatedly extended to cover the entire summer. While the waivers are seen as a positive by the ethanol industry, they still will not quiet calls for a permanent solution at the federal level, as opposed to the patchwork state-level system currently used to implement the waivers today.
On the weather front, there will be severe weather risk in the northwestern Corn Belt tonight into tomorrow, while a path from Texas through the Great Lakes generally speaking also sees elevated storm risks through the first half of this week. Overall, models are in fair agreement for the next week, though the GFS remains on the direr side of precip totals vs the EU, on two pockets of rainfall; one being in the south-central US and southern Plains, possibly stretching into the southwestern Midwest, and the other being in the northwestern Corn Belt through parts of the Dakota's and Minnesota. Totals look to be heaviest in the south, where models see 2-3" possible in parts of Texas and Oklahoma, but most of the Corn Belt is seen receiving anywhere from a couple tenths to an inch. Bigger picture concern is for too much rain to continue falling in the south, as an expected high pressure ridge over the southeastern US allows Gulf moisture to flow freely around the backside of this and up through the Plains and Central US. This ridging also keeps temperatures in the eastern US well above average beyond the middle of next week, which amid good soil moisture should be nearly ideal for early crop development.
Globally, Argentina sees improved moisture chances again compared to last week in the 10-day period but likely stays dry in the meantime, while moisture totals in Brazil look to continue declining into next week as the rainy season comes to an end. China looks to stay dry through a lot of its growing regions, while the Black Sea area saw a slightly wetter shift through eastern Ukraine and into Russia. It will be important that these rains make it into the shorter term forecast, but the outlook is better for crop production here than it was three days ago.