AM Comments May 20 2025

Posted on May 20 at 07:16

Good morning. Tuesday markets at the Board of Trade have started much the same way Monday's ended, with grain prices leading the way to the upside and trying to pull the soybeans higher with them. Also like yesterday, volume has remained on the lighter side to start this morning, as the continued lack of fresh market-moving news and the coming three-day Memorial Holiday weekend seem to have taken some of the trade's attention elsewhere. That said, we will keep repeating that the bottom line is its simply difficult right now to asses what fair value in the ag markets is with their being larger-than-normal question marks on both the supply and demand side of the price equation; long-range weather forecasters have continued to beat the drum for a hot/dry Midwest summer, while a new trade deal with one of any number of countries could significantly alter the demand landscape should specific tonnages or quantities be included. Our best advice is stay risk aware, and have a plan in place should the market make a sizeable move in either direction. Corn futures to start Tuesday are trading 4-5 cents higher, soybean futures are trading 1-2 cents higher, and the Chicago wheat market is trading 8-9 cents higher. Products are mixed, soybean meal is up around $1/ton, and soybean oil is down around 30 points. Outside markets are mostly quiet/lower this morning, crude oil futures are down 20 cents/bbl, the Dow Jones index is up 10 points, and the US$ index is down 10-15 points; the S&P500 is down 10 points and the NASDAQ is down 60 points.

 

Today's Reports: API Energy Stocks

 

• Yesterday afternoon's weekly crop progress report showed that as of Sunday, May 18th, US farmers had planted 78% of their intended corn acres, which is up 16% from last week and continues to run ahead of the five-year average of 73%. Soybean planting advanced 18% on the week to 66%, which compares to 48% last week and the five-year average of 53%. On emergence, 50% of the corn crop is up and 34% of the soybeans are up, which are also both well ahead of average.

 

• At the state level, OH is the furthest behind on corn planting at just 34% complete compared to 48% on average, while KY also continues to lag at just 63% complete compared to 74% on average. Soybean pace at the state level is slightly better off, with KY again behind at just 43% complete compared to 46% on average; Mississippi is the only other state behind average on soybean planting at 76% complete compared to 78% average.

 

• Wheat data in the report showed winter wheat conditions in the G/EX category falling back 2% on the week to 52%, though the figure is still ahead of the 49% rating seen last year. Spring wheat planting advanced 16% on the week to 82% complete, which is well ahead of the five-year average at 65%. Emergence data here shows 45% of the crop is up, compared to 40% last year and 34% on average. To view our crop progress maps, please click here.

 

• After recently raising their soybean production estimate for the season, the Buenos Aires Grain Exchange said on Monday that it may be forced to again trim its outlook for Argentina following recent heavy rains and flooding in the northwestern part of the Buenos Aires province. The exchange added that around 730k hectares of soybeans were left to be harvested in the area, while also adding that it anticipated more rains coming in the days ahead. Harvest here was already well behind normal due to excessive rains in March, which is adding to the late-season issues.

 

• Further digging into the Chinese customs data for the month of April, the country's soybean imports from Brazil during the month were down more than 22% from the same period last year at just 4.6 mmt's, while imports from the US were down more than 40% from last year at just 1.38 mmt's. Cumulative imports through the first four months of the year from Brazil are down 43% from last year at 9.14 mmt's, while cumulative shipments from the US are actually up 35% from last year at 12.95 mmt's.

 

• Following confirmation of a bird flu infection on a chicken farm in Brazil last week, the country's ag ministry on Monday said it had ruled out three of an additional seven suspected cases of the virus, citing lab test results that had been obtained in recent days. All three of cases were on non-commercial farms, which due to the language in existing protocols does not change the export bans currently in place with the EU and China. In order for Brazil to be considered virus-free, it will have to see no new cases for a 28-day period from the initial outbreak.

 

• Not a lot new overnight on the Russia/Ukraine situation following a Monday phone call between President Trump and Russian President Putin. Like we mentioned yesterday afternoon, that Putin is willing to negotiate on a ceasefire should certain conditions be met is not a new development in our opinion. However, Trump sees enough progress that he's not willing to press Moscow with fresh sanctions just yet, which his European counterparts have suggested.

 

• The financial world be mostly quiet for another day in the US on Tuesday, as the data slate is again lacking much of note. There are a bevy of Fed speakers slated to give talks across various events throughout the day today, which traders will be listening in to to try and catch a glimpse into what the thinking on future rate cuts this year currently is inside of the Fed. Otherwise, Chinese financial news overnight included a trimming of both it's 1 and 5-year loan rates by 10 basis points to 3.0% and 3.5% respectively, which are the first cuts since October.

 

• A strong storm system swept across the US Midwest yesterday afternoon and through the night last night, dumping anywhere from 1-4" of rainfall on parts of OK/AR/MO/IL/IA. According to the Storm Prediction Center, most of the associated storm reports were related to wind (213 preliminary reports) and hail (238 prelim. reports), while there were also 6 tornado reports. For today, the SPC sees an enhanced (3/6) chance of severe weather through TN/KY and further into the mid-south, while most of the upper Midwest is expected to continue seeing further rainfall from last night's system through the day today.

 

• Forecast-wise though, there is again not a lot new this morning, with the remnants of this slow-moving low pressure system being the main point of interest the rest of the week. The back half of the week sees additional precip chances for the southeast and mid-south, but the Midwest has largely trended drier into next week once the current system exits. Temperatures also look to remain on the cooler side of normal for the eastern US through this week and into next week, while the west will likely stay warm.

 

• Week two forecasts have remained touchy for another day, with precip maps in the period trending drier overnight for all but the Gulf Coast and East Coast, while extended range temperature maps seem to have a fair bit of reluctance in returning warmer air to the east beyond the end of the month. There is agreement on the west staying warm, but the outlook for the eastern US has changed with almost every new model run, which is keeping our confidence in this forecast low.