AM Comments May 23 2025

Posted on May 23 at 07:31

Good morning. Happy Friday. Ag markets are quietly lower for the most part to start Friday trading this morning, with the exception being bean oil, who once again saw a big gap-move on the open last night and has continued the roller coaster trading its seen all week. Notable is that prices last night gapped right to Wednesday's highs but went no further and are now 60-70 points off these levels as of this writing this morning. As we go into the weekend, headlines surrounding President Trump's tax bill will continue to make waves across most all commodity markets, while any notable shifts in weather forecasts over the next 72+ hours will likely be felt on the re-open Monday evening. Corn futures this morning are trading 1-2 cents lower, soybean futures are trading 5-6 cents lower, and the Chicago wheat market is also trading 1-2 cents lower. Products are continuing to see spread action, with meal futures down $2-3/bbl, and oil futures up 20-30 points; the oil market has had a 1.30 cent trading range overnight, and is currently around 100 points off the highs. Outside markets have been mostly lower overnight, crude oil futures are down around 80 cents/bbl, the Dow Jones index is down 570 points, and the US$ index is down 40 points; the S&P500 is down 90 points and the NASDAQ is down 400 points.

 

Today's Reports: CFTC Commitment of Traders; Cattle on Feed

 

  • The USDA will release their monthly Cattle on Feed report for the month of May this afternoon after the markets close. 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.

 

  • According to the USDA's monthly livestock slaughter report, total red meat production in the US during the month of April totaled 4.6 bil lbs, which was up 4% from the March figure but down 1% from April of last year. Beef production was seen down 3% on the year at 2.24 bil lbs, and pork production was up 1% from last year at 2.34 bil lbs.

 

  • The Buenos Aires Grain Exchange, in their weekly crop report that was released yesterday, maintained production estimates for both corn and soybeans at 49.0 and 50.0 mmt's respectively despite recent flooding that some feel will eventually lower the soybean crop. Soybean harvest progress advanced just under 10% on the week to 74.3% complete, while corn harvest advanced just 1.6% to 38.8% complete.

 

  • Soybean oil futures continue to be in the headlines, and jumped higher again last night on reports that the EPA had denied claims that they would be issuing mass SRE's. It is unclear this morning exactly where that leaves the matter, but we would see the risk of increased small-refinery exemptions similar to what Trump did during his first term as still present.

 

  • The International Grains Council (IGC) on Thursday raised their estimate of global grain stocks for the 2025/26 season by 5 million tons to 585 mil tons, citing improved production outlooks for both wheat and corn. Corn stocks in the year were raised 3 mil tons to 284 mil tons, and wheat stocks were raised by 2 mil tons to 262 mil tons; soybean stocks inversely were trimmed by 2 mil tons to 81 mil tons.

 

  • China's Ag Ministry on Friday said in a statement that it had issued more than $194 mil USD in central government funds for disaster prevention and relief that will go to support efforts in 30 provinces with the focus being on subsidies for pesticides, equipment, and unified services for disaster control. The announcement comes amid concerns over recent hot/dry weather

 

  • Barge shipments down the Mississippi River in the week ending May 17th were seen at 886k tons according to the USDA, which was up nearly 20% on the week; corn shipments at 678k tons were up 29% on the week, while soybean shipments at 172k tons were down 7.5% on the week. STL barge freight rates declined by 92 cents to $12.53/short ton.

 

  • Yesterday's weekly drought monitor update showed fairly steady conditions on the week, with 22% of the US corn production area and 16% of the soybean production area in D1-D4 drought. Both remain similar to where they've been in recent weeks, but rains through a bulk of the Corn Belt the last several days will likely lead to improvement in the weeks ahead.

 

  • The US$ index is looking to end a four week winning streak later today, as it appears spot futures will finish the week lower for the first time since mid-April as US debt fears related to Trump's new tax package have pressured the market all week. Relatedly, Senate republicans on Thursday said they would be looking to make substantial changes to the bill that passed the House yesterday, meaning several hurdles likely still exist before any sort of final legislation is passed.

 

  • In a string of posts on Truth Social this morning, President Trump threatened to increase tariffs on iPhones not made in the US by 25%, and also threatened a 50% tariff on goods coming from the EU beginning on June 1. He added on the EU that recent talks had been "going nowhere" and that the current deficit of more than $250 mil/year was unacceptable.

 

  • Weekend weather for the US Midwest will be a little more pleasant than that of the last few days, with forecasts calling for "partly sunny and high's near 70" for the next several days going into next week. Not everywhere will be dry though, as parts of the central plains and southwestern Midwest are expected to see continued storms and rain, with the models calling for up to 7" of rainfall in a small area near the southern border between KS and MO between now and the end of the day on Monday. Further north and west, the drier areas of NE and SD are also expected to see 1-3" of rainfall, which will be extremely beneficial to these areas.

 

  • Models then show continued rains in the mid-south/southeast through the week next week, while the northern tier of the Midwest including most of ND/MN/WI/IL/IN/MI/OH will stay on the dry side. Temperatures here look to remain cool though, as any heat real heat is confined to the US west coast and further to the north in Canada.

 

  • Have a good weekend! As a reminder, there will be no CBOT markets on Monday for the Memorial Day holiday, with trade resuming at 7pm central time Monday evening.