AM Comments May 15 2025
Good morning. Markets in the ag space are mostly lower to start Thursday morning, with soybean oil futures locked limit down and the downside leader on rumors of a disappointing RVO number that was said to be leaked late yesterday afternoon. The news caused a gap-lower open in the soybean market last night as well, while grain futures are being tugged lower in sympathy. Otherwise though, there's not a lot new again this morning, with the ongoing themes of trade talks with China and US Corn Belt weather forecasts continuing to control the majority of the longer term price narrative. That said, expect heightened volatility in the product markets today, as NOPA will add updated monthly crush data to what has already been an active day of trading for both of those markets. Corn futures to start Thursday are trading 1-2 cents lower, soybean futures are trading 13-15 cents lower, and the Chicago wheat market is trading either side of unchanged. Spread activity has been seen in the products so far, with meal up $6-7/ton, and soybean oil down the 3 cents/lb trading limit. Outside markets are trading lower, crude oil is down around $2/bbl, the Dow Jones index is down 130 points, and the US$ index is down 10 points; the S&P500 is down 25 points and the NASDAQ is down 120 points.
Today's Reports: Conab Monthly Supply and Demand; Weekly Export Sales; Weekly Jobless Claims; Monthly PPI; NOPA Soybean Crush
- Thursday's delivery slate according to the CME Group included 76 contracts of corn, 74 contracts of rice, 28 contracts of Chicago wheat, 13c contracts of soybean meal, 10 contracts of soybean oil, and 3 contracts of soybeans.
- Conab's monthly crop update this morning showed soybean production at 168.341 mmt's compared to 167.870 last month, and showed total corn production at 126.879 mmt's compared to 124.743 mmt's last month. The soybean figure was well below the average trade guess of 170.6 mmt's, while the corn figure was almost exactly as expected.
- This morning's weekly export sales report for the week ending May 8th is expected to show old crop corn sales in a range of 900k-1.5 mil mt's, old crop soybean sales in a range of 200k-500k mt's, and old crop wheat sales in a range of (200k)-100k mt's. New crop sales are seen between 350k-600k mt's for both corn and wheat, while new crop soybean sales are seen between 350k-500k mt's.
- Also out this morning will be the NOPA monthly soybean crush figure for the month of April, which the trade sees coming in at 184.642 mil bu; if accurate, this would be up 9% from the April figure from last year, and would be a new all-time record for the month. Soybean oil stocks as of April 30th are seen at 1.412 bil lbs, which would be down 6% from March and down 23% from April of last year.
- Day two of the Wheat Quality Council's Kansas crop tour found similar results to day one, with data collected from 211 fields leading to a yield estimate of 53.3 bu/acre, which compares to 42.4 bu/acre through the same area last year. However, despite the higher yield figure, scouts did mention the presence of disease damage in several of the fields. Final results from the tour will be given later today.
- Argentina's Rosario Grains Exchange on Wednesday raised their estimate of the country's soybean crop this year by 3 mmt's to 48.5 mmt's citing better-than-expected yields. In the report, the group also said they see Argentine wheat area in the coming season at 7.2 mil hectares, which would be a 15-year high, while production was seen at 21 mmt's compared to 20.1 this year.
- Action in the soybean oil market this morning is the result of comments out of EPA head Lee Zeldin on Wednesday that his agency would be taking "the next few months" to work on RVO policy. This, coupled with rumors of a blending mandate somewhere in the 4.625 billion gallon ballpark as opposed to the 5.5 billion gallons that had been talked about previously, has produced a significant sell-off this morning.
- Japan's largest agricultural lobby on Thursday urged the government not to make any trade deal with the US that would harm the domestic farming sector amid ongoing negotiations between the two sides. The petition noted that Japan was already importing significant volumes of US ag and livestock products, and that further increases of imports would harm long term national food security.
- Russia sent aides and deputy ministers to Turkey on Thursday to hold talks with Ukraine, as Putin expectedly backed out on a potential face-to-face meeting with Ukrainian President Zelensky. President Trump also will not be making a stop in Turkey to attend the discussions, which had been rumored earlier this week. It is unclear as of this morning how Ukraine would respond.
- Other news out of President Trump/The White House overnight included comments that a potential trade deal with India was close, and that also he thought he was close to a nuclear deal with Iran. Trump will be heading to the UAE today, where he is expected to hold meetings on AI and technology.
- The EU weather forecast overnight is similar to yesterday on the coming storm system for the northwestern Corn Belt, and sees rainfall of 1-2" generally for most of the Dakota's between now and Friday night. The model is then wetter into next week further to the south, and sees 2-6" of rain for a majority of the rest of the Midwest Weds/Thurs/Fri next week. Our confidence in the exact amounts/locations of precip from the system next week is low currently, but that there continues to be model agreement on another system coming and its track being generally further to the south than this week's are good signs.
- Week two forecasts saw little overnight change, and still offer below average precip potential for most of the Corn Belt into the last week of May. Temperatures are still expected to be cooler across the northern and eastern parts of the US next week, while 10-15 day outlooks continue to show warmth returning to the west, while the east stays average to maybe slightly below average.