AM Comments June 2 2025
Good morning. Ag markets at the CBOT are mixed to start the month of June, with the wheat market higher, the soybean market lower, and the corn market caught in the middle. Fresh trade tensions between the US and China late last week and over the weekend have been reason for the renewed downward pressure in the soy complex, with prices in both the beans and oil falling to their lowest levels since early April. Otherwise, the bottom line generally remains that without some sort of Midwestern weather threat, which doesn't appear extremely likely today, rallies will be hard-pressed to gather much steam in the short term without some sort of new demand deal or supply hiccup elsewhere in the world. Corn futures to start the new week of trading are either side of unchanged this morning, soybean futures are down 4-6 cents, and the Chicago wheat market is up 8-10 cents. Products are mixed, soybean meal is down $2-3/ton, and soybean oil is up 5 points. Outside markets are also mixed, crude oil futures are up $2.30-2.60/bbl, the Dow Jones index is down 90 points, and the US$ index is down 50 points; the S&P500 is down 20 points and the NASDAQ is down 100 points. Gold futures are up $60-70/oz.
Today's Reports: Weekly Export Inspections; USDA Monthly Fats & Oils; USDA Monthly Grain Crushings; Weekly Crop Progress
- Friday afternoon's CFTC Commitment of Traders report showed that in the week ending Tuesday, May 27th, managed money traders were buyers of 2,450 contracts of corn (now net-short 100,760 contracts), buyers of 24,042 contracts of soybeans (net-long 36,697), and buyers of 7,667 contracts of Chicago wheat (net-short 101,226). In soy products, funds were buyers of 13,681 contracts of meal (net-short 93,785) and sellers of 3,321 contracts of oil (net-long 53,988).
- The USDA will release fresh monthly soybean crush and corn grind data later this afternoon at 2pm central time; traders see the reports showing soybean crush in the month of April at 201.8 mil bu, which would be down just over 2% form the March figure but up nearly 14% from April last year. Soybean oil stocks as of the end of the month are seen at 2.101 bil lbs, which would be up 1% from March but down more than 9% from last year.
- On the corn grind report, traders see the amount of corn used for ethanol in the month of April at 434.4 mil bu, which would be down just over 4% from March but still up nearly 3% from April of last year.
- Private South American consulting firm Safras y Mercado said in an emailed report late last week that they were raising their estimate of Brazil's total corn crop from 135.1 mmt's previously to 139.0 mmt's, citing rainfall in April and May that likely boosted yields. Of note, this compares to the USDA's May estimate for Brazil's corn crop at 130.0 mmt's.
- India's government late in the day on Friday released a statement saying that the import duty on crude edible oils - including palm, sunflower, and soybean oils - would be lowered to 10%, while the duty on refined products would remain unchanged. Sources said the further widening of the gap between the two should discourage imports of refined products, which should help boost the domestic refining sector and support local prices.
- US/China trade tensions are back in the headlines this morning, as the Trump administration over the weekend imposed new tech-related export restrictions and revoked Chinses student visas, which Beijing said was a violation of the terms in their 90-day truce that was agreed to Geneva recently. President Trump similar accused China of breaking the agreement, as both sides are now trading blame for the fallout in discussions.
- Furthermore, Trump also announced an increase on the tariffs on steel and aluminum imports from 25% to 50% starting on Wednesday, which the President said was intended to boost domestic production and further reduce reliance on imports from China.
- Crude oil futures are back near the top end of their recent trading range this morning, as OPEC+ members over the weekend announced they would be maintaining current production levels through Q3; the announcement was seen as a positive by traders, as it seems to ease concerns over potential supply increases by the group that had been alleged in previous weeks.
- Ukraine over the weekend executed one of it's most brazen attacks of the now three-year+ war, as more than a year and a half of planning led to the deployment of hundreds of drones from crates that had been transported deep inside Russia on the backs of trucks; the drones were remotely activated, and then attacked airfields and other logistics sites deep inside of Russia, with reports indicating that they managed to hit multiple nuclear-capable aircraft at these locations.
- Despite the attacks, officials from the two sides are scheduled to sit down for their second round of direct peace talks on Monday, though it would appear following a similarly massive drone strike by Russia last week, that any sort of agreement on an end to the fighting is a ways off.
- Satellite-based precip data from the last 72 hours shows most of the Midwest and Corn Belt was dry over the weekend, with moisture mostly limited to the northeast; parts of KY/OH/IN did see 0.5" to 1", but the rest of the Corn Belt otherwise saw just trace amounts of rainfall.
- Looking at the forecast for this week, the weekend dry pattern will remain in place for most of the day on Monday, before storms are seen starting to work their way from west to east late Monday evening and then lasting through Tuesday and into Wednesday; the EU model between now and the end of the day on Friday shows a fairly widespread area from western KS/NE across to northeast OH receiving anywhere from 1-3"+, with some locally heavier amounts possible.
- Temperatures look to remain on the mild side for most of the Midwest this week, as there is good model agreement on continued cool air in the mid-section of the US in the 0-5 day period, while the 5-10 day period shows the west staying warm and the eastern and central US staying average to maybe just slightly above average. Extended outlooks continue to show the whole of the US returning to above average temps, but our confidence in this remains low.
- Last note on weather, NOAA's Climate Prediction Center (CPC) late last week released new monthly weeks 3-4 outlooks, which were similar to the maps released in April and can be found below.