PM Comments May 8 2025
Good afternoon. More mixed trade in the ag markets on Thursday, as a late-session rally in the corn market was able to lift values several cents off the day's lows, but was unable to pull them all the way back into the green. Soybeans, meanwhile, were again lifted by the bean oil market, which saw gains of more than 2% after making new lows for the move towards the end of the night session this morning.
CN closed Thursday at 4.47 and 1/2, down a penny and 3/4. Low was 4.42 and 1/4. CZ was down 2 cents at 4.38 and 3/4. New lows for the week and for the move in both. SN finished at 10.45, up 5 and 3/4. SX was up 3 cents at 10.25. WN closed at 5.29 and 1/4, down 5 cents. Products were mixed, July soybean meal closed at 294.70, down 30 cents/ton, and July soybean oil closed at 48.45, up 1.12 cents/lb. Livestock markets were mixed/mostly higher, June live cattle closed at 214.25, up $1.72, August feeders closed at 301.25, up $2.65, and June hogs closed at 91.17, down 15 cents. New contracts highs again in both of the cattle markets. Outside markets are trading higher to sharply higher, with crude oil futures up around $1.90/bbl, the Dow Jones index up 460 points, and thee US$ index up around 110 points; the S&P500 is up 60 points and the NASDAQ is up 300 points. Gold futures are down around $90/oz.
Spreads were mostly mixed across both markets, with corn spreads finishing Thursday up a penny and a quarter to down a penny and a quarter, while soybean spreads finished down 3/4 of a cent to up 3 and 1/4 cents. CK/CN closed at -8 and 1/2, down 1/4 of a cent, and SK/SN closed at -8 and 1/4, up 1/2 of a cent. CN/CU closed at 21, up a penny and a quarter, and CN/CZ made new lows for the move at 6 and 1/4 before closing at 8 and 3/4. SN/SQ closed at 5, up a penny and 1/4, and SN/SX closed at 20, up 2 and 3/4.
The USDA this morning announced a slew of daily sales flashes; private exporters reported sales of 205,000 mt's of corn of delivery to Mexico - of the total, 40,000 mt's is for delivery during the 2024/25 marketing year and 165,000 mt's is for delivery during the 2025/26 marketing year. Exporters also announced 115,000 mt's of corn for delivery to unknown destinations during the 2024/25 marketin0g year, as well as 225,000 mt's of soybeans for delivery to Pakistan during the 2025/26 marketing year. Of note on the soybean sale, this is the first soybean flash sale to Pakistan since 2022. Pakistan is not a typical importer of US soybeans, and is expected to import less than 3 million tons of soybeans from all destinations in the 2025/26 marketing year.
Staying on the demand side of the market, this morning's weekly export sales report for the week ending May 1st showed another strong week of corn sales, while soybean and wheat sales were slow but within trade expectations. 2024/25 corn sales in the week were seen at 1.663 mmt's, with featured buyers being Japan (338,500 mt's), Taiwan (283,400 mt's), and Spain (240,500 mt's); unknown destinations were buyers of 162,400 mt's in the week. Soybean sales were seen at 377k mt's, with the featured buyer in the week being Mexico at 153,800 mt's; unknown destinations bought 129,800 mt's in the week. And lastly for wheat, sales were seen at 70k mt's for the week, with Mexico accounting for 37,300 mt's of this and the Philippines accounting for 24,500 mt's. New crop sales in the week were minimal for corn and soybeans at 18k mt's and 10k mt's respectively, but new crop wheat sales were above expectations at 493k mt's.
Otherwise, the bulk of Thursday's headlines were related to the US-UK trade deal that was announced by President Trump at the White House this morning. Both he and British Prime Minister Keir Starmer heralded the deal as a major breakthrough, adding that this was a "historic day" for the two sides. As far as the agreement itself goes, 10% US tariffs on goods imported from the UK will remain in place, while British tariffs would be lowered from 5.1% to 1.8%. Among other things, the deal will drop US auto tariffs on British imports from the current level of 27.5% to 10%, and will apply to a quota of 100,000 vehicles, which is most of what the UK exported to the US last year. US tariffs on British steel will drop from 25% to 0%, and British tariffs on US ethanol will also drop to 0% from their current level of 19%. Also of note in the agreement was verbiage surrounding improved market access on beef, with British farmers being given a tariff-free quota of 13,000 mt's; along with this though were comments that food safety standards on imports will not be changed. President Trump also said that "The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol, and virtually all of the products produced by our great farmers." It is unclear exactly when the deal is expected to go into effect, with newswires this afternoon indicating it had been announced but not yet finalized.
Not a lot new today on the trade front regarding China, but there were few other headlines out of the east-Asian country for Thursday. First, state broadcaster CCTV reported this morning that government officials had issued disaster prevention and mitigation plans to ensure a stable grain harvest, urging producers to take action to combat drought, high temperatures, and heat damage. The announcement comes following several local governments earlier this week making similar warnings to farmers. Next, sources familiar with the matter said China had resumed soybean purchases from five Brazilian firms that had previously been suspended over phytosanitary concerns back in January. It is unclear exactly when the restrictions were lifted, but it is notable that the decision came ahead of a planned visit by Brazilian President Lula to China later this month. Lastly, China's central bank lowered its seven-day reverse purchase rate by 10 basis point to 1.4%, while also reducing its reserve requirement ratio by 50 basis points effective May 15th.
Midwest weather the rest of the week will continue to be mostly dry aside from parts of the far south and southeast as high pressure ridging continues to dominate the short term forecast. Potentially heavy rainfall across the southeastern part of the US will continue to be the main story over the next few days, with there little of note to talk about in the Corn Belt or really anywhere else in the US. Extended forecasts have continued to trend even wetter at mid-day today between May 16th and May 22nd, with now most of the eastern US expected to see above average precip in the period. The best chances will be in the north, but it seems model confidence is growing in regards to how far south and east this moisture will be able to make it. The EU's AI model has dropped a rather large pocket of cooler air back into the central US in the 10-15 day period, but neither the EU of GFS operational models have followed in this shift, which means it will need monitoring into the weekend. Otherwise, the 5-10 day outlook continues to offer summer-like warmth for a lot of the Midwest through the weekend and into next week.