AM Comments May 19 2025
Good morning. Grain and soy futures are quietly higher this morning to start Monday trade at the CBOT, while the product markets continue to see the same spread activity that was seen to end the week last Friday. As we get into the last full trading week in the month of May, the ongoing themes of weather and trade developments will continue to key price direction in the short term, with the latter presenting considerable headline risk as there is just simply little to no way of knowing when and with whom President Trump might announce a deal with. The bottom line though, amid balance sheets that have started the season tighter than many in the trade had thought they might, is that any amount of crop loss or new demand will be reacted to rather swiftly, which should keep volatility elevated. Corn futures to start Monday morning are trading 2-4 cents higher, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is trading 4-5 cents higher. Products are mixed, soybean meal is down around 50 cents/ton, and soybean oil is up 30-40 points. Outside markets are mostly lower, crude oil futures are down 50-60 cents/bbl, the Dow Jones index is down 210 points, and the US$ index is down 80-90 points; the S&P500 is down 60 points, and the NASDAQ is down 290 points. All three of the stock index futures and also the $ index saw gap-lower opens last night. Gold futures are up $50-60/oz and inversely saw gap-higher opens last night.
Today's Reports: Weekly Export Inspections; Weekly Crop Progress
- Friday afternoon's Commitment of Traders report showed a massive week of fund selling in the corn market in the week ending May 13th; data shows managed money traders in the week sold 98,869 contracts of corn (now net-short 84,976 contracts), and also sold 13,161 contracts of Chicago wheat (net-short 126,895), and bought 16,535 contracts of soybeans (net-long 38,407).
- This is the first time the funds have been net-short the corn market since October of last year, and this is also the largest net-short the fund's Chicago wheat position has been since May of 2023, when it reached 126,998 contracts.
- In the soy products, managed money traders were buyers of just 712 contracts of soybean meal and were also buyers of 10,694 contracts of soybean oil; this makes them now net-short 102,745 contracts of soybean meal, and net-long 67,432 contracts of soybean oil.
- Sources reported on Friday that both the EU and China have suspended poultry imports from Brazil following confirmation of an avian influenza outbreak on a commercial poultry farm in RGDS. China is Brazil's largest export market for poultry products. Officials in Brazil stressed that the outbreak was localized, and there was minimal human risk under normal handling and cooking practices.
- Official import data from China's customs administration showed grain imports in the month of April continued to significantly lag last year, with corn imports in the month seen down 85% from last year at 180k mt's, while wheat imports were down more than 60% at 760k mt's; cumulative imports of the products so far in 2025 are also well behind last year, with total corn imports down 95% and total wheat imports down 83%. Soybean imports, which we mentioned two Friday's ago, were down 29% from last year in April at 6.08 mmt's.
- Argentina's harvest pace looks to again be slowed after progress in recent weeks, as storms over the weekend in the northern parts of Buenos Aires dumped 6-10" of rainfall in places here and caused flooding and forced evacuations of thousands of residents. Along with delays in harvest, the abundance of moisture will likely also cause logistical issues for one of the world's main exporters of soy and soy products.
- Staying in Argentina, export data released by the Rosario Grain exchange on Friday showed sales have picked back up in recent weeks following a relaxing of currency controls earlier in the month of April. The group said the gap between the official peso-dollar exchange rate and the grain rate had averaged near 30% previously, but was now down to around 3% after the lifting of controls.
- According to the USDA, federally inspected pork production in the week ending May 17th totaled 522 mil lbs, which which was down just over 1% from the week prior, while beef production in the week totaled 494 mil lbs, which was up 1%. YTD pork production is now down 1.7% from last year, while beef production in the year is down 2.6%.
- In the latest on the Russia/Ukraine situation, the two sides have apparently agreed to exchange 1,000 prisoners as the result of talks over the weekend, but the discussions failed to yield any further meaningful progress on an end to the conflict that is now dragging into its third year. President Trump is scheduled to speak with Russian President Putin by phone on Monday, following the launching of the biggest drone attack by Russia since the war started over the weekend.
- Financial markets are under pressure early this week as a result of a further downgrading of American debt by credit rating company Moody's late last week. Otherwise, focus in the financial markets this week likely remains on Trump's sweeping tax reform bill, as the space will be somewhat quiet from a data standpoint. There is also news over the weekend that the EU and the UK have reached an agreement on defense spending and security, as well as a few other items, which should be seen as a positive.
- Satellite data from over the weekend shows 72-hour rainfall totals in the Dakota's and NE reaching around 1"-1.5" generally speaking, while parts of SE NE saw potentially heavier totals. Similar 1-2" rains were noted through the mid-south and southeast as well, though the central and north-central parts of the Corn Belt (IA/IL/WI/MN) were largely short-changed and saw just trace amounts of rainfall if anything.
- For this week, we usually don't start on the temp side but are going to today, as models trended noticeably cooler for this week over the past couple days. There is good agreement on well below average daytime highs throughout a majority of the country early this week, before heat is seen returning to the southwest by the back half of the week. 5-10 day maps then show this warm west/cool east pattern hanging around for a few days, before 10-15 day maps again show a return to average/slightly above average temps for the Corn Belt into the opening days of June.
- On the precip side, this colder air has brought a snow forecast into the GFS's model run this morning for parts of the Dakota's and northern Plains, but our confidence in this is not great. Otherwise, models see the slow-moving low that has this snow potential in it providing an additional 1-2" of rainfall and also more potential severe weather to the western/southwestern Corn Belt the first half of this week, with the drier areas of IA/N IL/MN/WI finally expected to see some good rains between now and Thursday.
- Further out, week two forecasts are noticeably wetter in the southeast than they were going home last week, but have stayed drier in the west and have also stayed drier in the northern portion of the Corn Belt. Pressure maps show some lesser defined ridging moving back into the area after this low pressure system exits the end of this week, but like we talked about last week, a lack of overall atmospheric momentum is keeping confidence in any forecast beyond 4 or 5 days low, and this will need monitoring as we go through this week.