AM Comments May 8 2025
Good morning. Markets are trading mixed to slightly higher this morning to start Thursday trade, with corn having notched new lows for the week overnight and the soy complex continuing to have a strong tone due to impending talks with China. With the meetings not expected to start until Saturday and the USDA's May WASDE report still lingering in the background for Monday, we would expect choppy, two-sided trade to be the most likely theme for the next two days to round out the week, as nobody wants to be caught short ahead of a Chinese trade deal announcement or a balance sheet surprise from the USDA. Fund/spec positioning will be the name of the game, with the US farmer engaged in planting activities and fieldwork, not trading and marketing. Corn futures this morning are trading unchanged to a penny lower, soybean futures are trading 3-7 cents higher, and the Chicago wheat market is also unchanged to a penny lower. Products are higher, soybean meal is up around $1/bbl, and soybean oil is up 50-60 points. Outside markets are also higher, crude oil futures are up around $1/bbl, the Dow Jones index is up 300 points, and the US$ index is up 30-40 points; the S&P500 is up 50 points and the NASDAQ is up 250 points. Gold futures are around $30-40/oz lower.
Today's Reports: Weekly Export Sales; Weekly Jobless Claims
- According to the CME Group, Thursday's delivery slate is light and includes just 29 contracts of Chicago wheat, 20 contracts of soybean oil, 18 contracts of corn, 4 contracts of rice, and 3 contracts of soybeans.
- This morning's weekly export sales report for the week ending May 1st is expected to show old crop corn sales in a range of 700k-1.4 mil mt's, old crop soybean sales in a range of 200k-500k mt's, and old crop wheat sales in a range of (100k)-150k mt's. New crop sales are seen similar to recent weeks, with corn estimated between 0-300k mt's, soybean estimated between 0-150k mt's, and wheat estimated between 200k-400k mt's.
- According to a survey of Bloomberg analysts, traders see Monday's May WASDE report showing new crop corn ending stocks at 2.042 bil bu, new crop soybean ending stocks at 380 mil bu, and new crop wheat ending stocks at 859 mil bu. There is little/no change expected on the old crop ending stocks numbers for any of the three crops.
- On the world side, new crop corn ending stocks are seen at 297.6 mmt's, new crop soybean ending stocks are seen at 127.0 mmt's, and new crop wheat ending stocks are seen at 261.4 mmt's. The wheat figure is similar to that of the current crop year, but both the corn and soybean estimate are seen higher than the 2024/25 season.
- Lastly, for production figures in Monday's report, the trade sees the 2025/26 corn crop at 15.78 bil bu with a national average yield of 180.9 bu/acre; they see the soybean crop at 4.33 bil bu with an average yield of 52.5 bu/acre; and they see the total wheat crop at 1.89 bil bu. Corn and soybean yields are both expected to be up from last year, but the total soybean crop is expected to be smaller mostly on planted acreage reductions. In South America, traders expect to see Argentina corn and soybeans at 49.7 mmt's and 49.1 mmt's respectively, while Brazil corn and soybeans are seen at 126.9 mmt's and 169.4 mmt's respectively.
- Private South American grain export lobby Anec said on Wednesday that Brazilian soybean exports could be down both on the month and on the year in the month of May as Chinese buyers know there is crop to be bought and are not in a big hurry to get coverage on. The group says they currently see exports in the month at 12.6 mil tons, which would be down about 900k tons from both April and May of last year.
- Asked whether he would consider dropping tariffs from the current 145% level on Chinese imports as a sort of olive branch offering ahead of scheduled negotiations this weekend, President Trump responded with a firm "no" in the Oval Office on Wednesday. The answer further illustrates that while talks are anticipated to begin, they are not expected to bring about an abrupt in the hostilities that currently exist between Washington and Beijing.
- Fed Chair Jerome Powell, after interest rates were held steady for a fifth consecutive month on Wednesday, said that risks surrounding inflation and unemployment had both increased, and added that progress towards the Fed's goals would not likely be made this year should current tariffs stay in place. However, Powell also used the same "we have been afforded the ability to be patient in regards to policy decisions and will look at all available data" as it pertains to possible future decisions.
- Other news for Thursday includes signs that the US and UK could potentially sign a trade deal as early as this morning, as a Wednesday evening post on Truth Social from President Trump indicated there would be an announcement made at the White House regarding the matter at 9am central time this morning. Sources familiar say the deal is expected to be rather narrow-focused, and added British PM Kier Starmer was also planning to provide an update at some point on Thursday.
- Forecasts in the week two time period are continuing to indicate a pattern shift coming by the end of the month, and expanded their area of expected above average moisture conditions further to the south and west than was seen on Wednesday. Confidence is goring amid good model agreement, but the forecast will need to survive the weekend and into make it into the short term next week before the all-clear is given. The risk is that ridging stays persistent and limits moisture to the northern and central Corn Belt.
- Otherwise, the weather story for the rest of the week will not be in the Midwest, but will be in the southeast, where some of the driest part of FL/GA/SC/NC are expected to see rainfall in excess of 6" in some places, with a more general 2-5" expected for a lot of the area. While this moisture is desperately needed, there will be flooding and landslide concerns as conditions have been so dry that a rapid abundance of moisture will likely cause runoff issues.