AM Comments May 27 2025
Good morning. Commodity markets are mixed coming out of the long three-day holiday weekend; corn, wheat and meal markets are lower in the ag space while the beans and oil are higher, and the outside markets are mostly in the green on optimism surrounding global trade. While there is seemingly progress being made on the trade front with Europe, the ongoing themes of generally favorable weather forecasts and unknowns regarding future demand and US biofuel policy have kept the volume on the slow side to start the new week, and we would not be surprised to see this continue to be a market feature in the days ahead. Headline risk stays elevated in the short term, which means volatility likely also stays elevated. Corn futures to start Tuesday are trading 3-4 cents lower, soybean futures are trading 2-4 cents higher, and the Chicago wheat market is trading 7-8 cents lower. Products are mixed, soybean meal is down around $2/ton, and soybean oil is up 50-60 points. Outside markets are mixed, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is up 540 points, and the US$ index is up 30 points; the S&P500 is up 80 points and the NASDAQ is up 320 points. Gold futures are $70-80/oz lower.
Today's Reports: Monthly Durable Goods Orders; Weekly Export Inspections; Weekly Crop Progress
- Friday afternoon's CFTC Commitment of Traders report for the week ending May 20th showed managed money traders now being net-short 103,210 contracts of corn (-18,235 on the week), net-long 12,654 contracts of soybeans (-25,752), and net-short 108,893 contracts of Chicago wheat (+18,003). This was the fifth straight week of selling by the funds in corn, and also the largest week of buying in Chicago wheat since mid-February.
- In soy products, funds were sellers of 4,721 contracts of meal and also sellers of 10,122 contracts of oil; this makes them now net-short 107,466 contracts in the meal and net-long 57,309 contracts in the oil. This is another new all-time record short position in meal and this was also the largest week of fund selling in oil since mid-March.
- The USDA's Cattle on Feed report for May, also released Friday afternoon, showed the US feedlot herd as of May 1st at 11.376 million head, which was down 2% from last year. Placements for April were down 3% at 1.613 million head, and marketings for April were also down 3% at 1.825 million head. All three figures were near average trade guesses. To view the full report from the USDA, please click here.
- Over the holiday weekend, President Trump announced in a post on Truth Social that he was delaying the tariffs announced last week on the EU for June 1 to June 9 following a phone call from Commission President Ursula von der Leyen. The Commission head said Europe was ready to rapidly advance talks on a trade deal, but that more time we would be needed than June 1.
- In a separate post, President Trump also said on Truth Social that Russian President Vladimir Putin "has gone absolutely CRAZY!" and added something had happened to him following Russia's largest drone attack on Ukraine over the weekend since the war began. Trump went on to also chide Ukrainian President Zelensky, saying that his comments weren't doing his country any favors, and that everything out of his mouth causes problems.
- According to data from the Russian Ag Ministry's Agroexport center, Chinese imports of oilseed cake and meal nearly tripled in the Jan-April period of 2025 compared to that of 2024, and totaled more than 300k tons. Russia typically is the third largest exporter of oilseed products to China, behind Ukraine and Canada.
- The World Organization of Animal Health said in a report that the geographical indicator of the confirmed bird flu case in a flock in RGDS state had been changed from "event occurs in country" to "event occurs in zone"; the WOAH considers the "zone" to be an area of 10 kilometers around the infected farm. It is unclear this morning what this means for Brazil's poultry exports, with there being no update on restrictions from importing countries.
- According to the USDA, federally inspected pork production in the week ending May 24th was seen at 511 mil lbs, which was down just under 2% from the week prior. Beef production in the week was seen at 497 mil lbs, which was up 0.5% on the week. YTD pork production is down 1.7% from last year and YTD beef production is down 2.6% from last year.
- Satellite data from the past 72 hours shows rainfall continued to dot the southeast and mid-south, with totals ranging anywhere from 0.5-2" in the NE/KS region to 2-4" through parts of OK/TX/AR and then further east into the Gulf states. The bulk of the Cron Belt was dry though, with the majority of IN/IL/IA seeing little/no precip.
- As we get into this week, models largely show a continuation of this pattern occurring with additional rains of 1-3" expected along the Gulf Coast. Further north, just light shower potential is seen throughout the Midwest with just a couple tenths expected between now and Saturday morning. Temperatures look to stay on the cooler side also for the eastern 2/3's of the US this week, while the west stays warm. 5-10 day outlooks show warmth then returning to the Midwest into the weekend and next week while a lot of the rest of the country sees temps either side of average.
- Extended range forecasts, which we continue to not have a lot of confidence in, have trended back wetter over the weekend for a bulk of the US, especially in the north-central areas of the Corn Belt. The CPC's outlook for the period has the rain a bit further to the west, but otherwise, there is fair agreement amongst all the models on a wetter pattern returning to the Corn Belt into the second week in June.