PM Comments May 29 2025
Good afternoon. Chicago ag markets had another choppy day of trading on Thursday, as corn futures extended their losses for the week, while the soybean market was kept from trading higher by another round of selling pressure in bean oil. Wheat and meal were able to separate from the bunch and trade higher on the day, but the bottom line remains that there simply isn't a lot of bullish input coming into the market right now which has caused ag's to trade sideways to lower since generally the middle of May.
CN closed Thursday at 4.47, down 4 cents. CZ was down 2 and 1/4 at 4.41 and 1/4. SN finished at 10.51 and 3/4, up 3 and 1/4. SX closed at 10.37 and 1/4, down 1/4 of a cent. WN was up 3 and 3/4 at 5.34. Inside day for WN. Products were mixed, July soybean meal closed at 296.40, up $2.70/ton, and July soybean oil closed at 48.39, down 54 points. Livestock markets were mixed to end the day, June live cattle closed at 215.52, up $1.60, August feeders were up $4.30 at 299.92, and June hogs closed at 100.02, down 25 cents. Outside markets are mostly lower, crude oil futures are down around $1/bbl, the Dow Jones index is up 50 points, and the US$ index is down 50-60 points; the S&P500 is up 10 points and the NASDAQ is near unchanged. Outside days for all of crude oil, the stock index futures, and the US$ index.
Spreads were mixed on Thursday, corn spreads were up a half cent to down a penny and 3/4, and soybean spreads were down a quarter cent to up 3 and 1/2 cents. CN/CU closed at at 19 and 3/4, down a penny and a half, and SN/SQ closed at 3 and 1/4, unchanged.
Following a day filled with rumors of cash corn cancelations out of NOLA, the USDA coincidentally enough announced a pair of daily corn sales flashes to start the day this morning; private exporters announced sales of 104,000 mt's of corn for delivery to Mexico during the 2024/25 marketing year, and also announced sales of 101,096 mt's of corn for delivery to unknown destinations during the 2024/25 marketing year.
Aside from that, the big talking point throughout the day on Thursday was overnight news that a trade court had ruled that President Trump's tariffs were not enforceable under the 1977 International Emergency Economic Powers Act, which is the piece of legislation the Trump administration has cited as grounds for most of the tariff policies that have been enacted in recent months. The court granted the administration a 10-day period to become compliant or file an appeal, the latter of which was submitted shortly after the ruling was initially made. While seemingly a large development, comments throughout the day today from the White House seemed to indicate minimal concern, with USTR Peter Navarro this morning telling reporters that, "Nothing has really changed." It is unclear how long Trump's appeal is expected to take at this point, but sources familiar with the matter said they expected the ruling to get overturned, and added that it doesn't necessarily entirely strip Trump of his tariff powers, as provisions under Section 232 and some other legislation still allows him to enact certain measures.
Other news for Thursday that got pushed somewhat to the back burner was the EIA's weekly ethanol production and stocks report, which was released a day later than normal this week due to the Monday Memorial Day holiday. The report showed daily ethanol production in the week ending May 23rd totaled 1.056 mil bbls/day, which was up 2% from last week and up just under 4% from the same week last year; this was also the largest weekly production figure since the week of March 28th. Stocks in the week were seen at 24.821 mil bbls, which was down 0.5% from last week but up 2.5% from last year. Like last week, this was the lowest stocks figure since the week of January 3rd. We estimate corn usage in the week at 104.3 mil bu, which brings cumulative marketing year corn use to 4.007 bil bbls; this compares to 3.896 bil bu last year and the USDA's full marketing year forecast of 5.500 bil bu. On the petroleum side, the report showed crude oil stocks in the week down 2.795 mil bbls at 440.363 mil, while gasoline stocks were down 2.441 mil bbls at 223.081 mil, and distillate stocks were down 724k bbls at 103.408 mil. Implied gasoline demand in the week was estimated at 9.452 mil bbls/day, compared to 8.644 mil last week and 9.148 mil in the same week last year.
Mid-day weather runs were like their overnight versions on Thursday, with the EU continuing to be wetter than the GFS for the Plains and western Corn Belt over the next 5-7 days. We've said it for weeks now, but the run-to-run forecast differences have lowered our confidence on any outlook beyond four or five days. How this rain event for the western Corn Belt develops tomorrow and over the weekend will be important, with heat seen returning to the are early next week. The EU model also differs on its temp outlook, and sees cooler air lingering in the central Plains in the 5-10 day period, while the GFS is warmer through these areas. Similar differences are seen in the 10-15 day period, but our bias would lean to the EU model, as it has been the more accurate of the two through most of spring. Week-two forecasts are still wet, but like we mentioned yesterday, we will need to see this moisture get pulled into the short term forecast before we have any sort of confidence in its development.