AM Comments May 22 2025

Posted on May 22 at 07:25

Good morning. Seeing a bit of turn-around-Thursday action in the ag markets this morning, as yesterday's optimism surrounding 45Z and the biofuel-related portion of Trump's tax bill has apparently soured overnight, with bean oil futures having gapped-lower to start the evening session and still leading the charge lower this morning. The selling has spilled over into the beans and also the grains, with all three markets here also lower, while some measure of spread activity has meal futures as the lone member of the bunch trading in the green. We have little/no insight on what will potentially happen throughout the day today on the political front as it pertains to the previously mentioned tax bill, but would advise that headlines regarding the matter are likely to cause notable volatility, especially in the bean oil/bond/equity markets, through the rest of the week and into the weekend. Corn futures this morning are trading 1-2 cents lower, soybean futures are trading 4-5 cents lower, and the Chicago wheat market is trading 1-3 cents lower. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 1.30-1.40 cents/lb. Outside markets are mixed, crude oil futures are down $1/bbl, the Dow Jones index is down 220 points, and the US$ index is up 15 points; the S&P500 is down 30 points and the NASDAQ is down 100 points.

 

Today's Reports: Weekly Export Sales; Weekly Jobless Claims

 

• This morning's weekly export sales report for the week ending May 15th is expected to show old crop corn sales in the week in a range of 700k-1.6 mil mt's, old crop soybean sales between 100k-300k mt's, and old crop wheat sales between (200k)-100k mt's. On the new crop side, corn sales are expected to be between 50k-500k mt's, soybean sales between 90k-400k mt's, and wheat sales between 300k-700k mt's.

 

• The USDA tomorrow afternoon after the markets close will release their monthly Cattle on Feed report for the month of May. Traders expect the report to show the US feedlot herd as of May 1st at 11.381 mil head, which would be down around 1.5% from last year; placements during April are seen at a four-year low of 1.603 mil head, while marketings in April are seen down more than 3% from last year at 1.810 mil head.

 

• Private Brazilian ag firm Agroconsult said in a statement that the country's total corn production could possibly reach the 140 mmt mark, which would make it the second biggest crop ever, behind only the record from 2023/24. If accurate, the figure would also be up nearly 10% from last year. The group also said previous concerns due to delayed plantings had been alleviated by better-than-normal rains in April and May.

 

• SovEcon, a private Black Sea ag advisor, raised their estimate of Russia's wheat production in the current season by 1.2 mmt's to 81 mmt's, citing improved weather conditions through May. The group sees Russia's total grain production in the season at 127.6 mmt's, up from 125.9 mmt's last year. Unrelated but staying in Russia, the Russian Grain Union said wheat exports so far in May are down more than 60% from last year at just 1.214 mil tons.

 

• According to the Illinois Wheat Association, who conducted a one-day crop tour earlier this week, wheat production prospects in the state are better than a year ago, with the group's average yield estimate coming in at 106 bu/acre, compared to 104 last year. USDA in it's most recent report projected IL wheat yields at 86 bu/acre.

 

• The NGFA (National Grain and Feed Association) said in a letter to the CFTC that they are against a proposal for expanded trading hours in the agricultural markets, arguing that 24-hour trading would expand market volatility and increase the risk of market manipulation. The group added that a daily pause was critical for the physical delivery process. The CFTC had a 30-day comment period on the proposal, which ended yesterday.

 

• House Republicans, in a somewhat rare overnight floor debate, made further progress on pushing Trump's "big, beautiful, bill" ahead, as a 217-212 vote in favor of the bill has opened the door for a full-House vote sometime later in the day on Thursday. If passed, the bill would then go to the Senate for approval, which sources say could possibly take weeks. House Speaker Mike Johnson, speaking to reporters this morning, said "We're in a very good place... I believe we are going to land this airplane."

 

• Crude oil prices are again seeing pressure this morning from reports that OPEC+ member were once again considering production increases at their June 1 meeting, which would go into effect for July. A hike of 411k bbls/day is currently on the table, which would be nearly triple the amount that was planned originally and would also be equal to the increases approved for both May and June. The group says the increases are to satisfy demand, but there are private assumptions that the increases are possibly to punish over-producing members or to placate US President Trump.

 

• Lastly on the outside market news front for Thursday, President Trump said in a Truth Social post that he was "seriously considering" taking the two US mortgage companies Fannie Mae and Freddie Mac public after years of government oversight following the 2008 financial crisis. Trump added that it seemed the time was right, and that the two companies had been "throwing off a lot of CASH."

 

• Rains Wednesday were focused on the northeast, with ag areas in the Midwest seeing just trace amounts of precip in the northern and northeastern areas. Additional light/scattered precip is expected for the northeast today, while the eastern Midwest also sees light/scattered precip potential into the afternoon/evening. Then for Friday, another system is expected to bring rains for the central plains and western Corn Belt, with a pocket of potentially heavy rain possible for E KS/S MO of 5+".

 

• The rest of the Corn Belt is expected to remain on the dry side into next week, though continued cool weather will limit any potential crop stress. Week two forecasts show a similar outlook this morning, with the southeast/mid-south staying in an above average moisture pattern, while areas to the north and west hold in drier trends. There was once again no update to the temperature forecast this morning for either the short term or the 10-15 day outlook.