AM Comments June 4 2025
Good morning. Prices at the CBOT are higher this morning in what has been a quiet, low volume overnight trading session on continued optimism for the time being surrounding developments with China and fears of hot weather returning to the midsection of the US by mid/late June. To the China situation, we would continue to urge a word of caution as just because the two Presidents are potentially speaking doesn't any sort of deal will be immediately agreed to. It is our opinion that negotiations are likely still in the early stages, and it will be some time before the two sides can totally iron out their abundance of differences. And to the weather, like we mentioned yesterday, we will give a hot/dry forecast more credence when it can be pulled into the short term, but will be reluctant to ring the panic bells in the meantime otherwise. Corn futures to start Wednesday are trading 4-6 cents higher, soybean futures are trading 3-6 cents higher, and the Chicago wheat market is up 4 cents. Products are higher, soybean meal is up around $1/ton, and soybean oil is up 20-25 points. Outside markets are also mostly higher, crude oil futures are up 5-10 cents/bbl, the Dow Jones index is up 60 points, and the US$ index is near unchanged; the S&P500 is up 10 points and the NASDAQ is up 50 points.
Today's Reports: EIA Weekly Ethanol Production/Energy Stocks
- This morning's weekly ethanol report from the EIA for the week ending May 30th is expected to show production in the week in a range of 1.041-1.072 mil bbls, while ethanol stocks in the week are seen between 23.781-24.381 mil bbls.
- Data from Ukraine's farm ministry, released earlier today, showed the country's ag exports in the month of May at 4.04 mmt's, which is up from the 3.73 mmt's shipped in April on mostly increases in exports of wheat and corn. Corn exports in the month totaled 2 mil mt's, while wheat exports totaled just under 850k mt's.
- The Purdue University/CME Group agriculture sentiment index improved 10 points in the month of May from the month prior to 158, which was also the highest figure seen in the last four years. The survey, conducted between May 12th and 16th, was sent to 400 producers. Notable is the timing of the survey, as this was just after the bullish starting numbers for the 2025/26 marketing year released by the USDA.
- Not a lot new on the US/China front this morning, as news outlets continue to tout a Friday phone call between President Trump and President Xi that has lacked confirmation since its inception Monday evening. Trump said in a Truth Social post late yesterday evening that Xi is "extremely hard to make a deal with", which seems to indicate a relatively large gap still exists between the two. Sources from the Chinese side say the phone meeting will likely only be agreed to if Chinese officials are confident there will be no surprises from the US side.
- Sources familiar with the situation said talks this week between US and European trade officials were "productive", adding that both sides seemed to emphasize the importance of being aligned on key issues like supply chain resilience, fair market access, and coordinated responses to non-market economies. "Constructive" was another word used to describe the talks, despite increasing tensions between the EU and China and continued tariff pressure from US President Trump.
- Other tariff news this morning includes the signing of an executive order by President Trump late in the day on Tuesday that doubled the tariff rate on steel and aluminum imports into the US, which was widely expected. Wednesday also marks the short-time deadline for other countries to submit their trade proposals to the US, so it will be interesting to see what, if any, developments occur on this front throughout the day today.
- Billionaire Elon Musk on Tuesday seemed to further distance himself from the Trump administration, as he took to his social media platform X (formerly Twitter) to lambaste Trump's sweeping tax bill, calling it a "disgusting abomination" that will increase the federal deficit. Several Republican fiscal hawks in the Senate supported Musk's views, while House Speaker Mike Johnson told reporters "my friend Elon is terribly wrong."
- Satellite data from the last 24 hours as of 6am central time this morning shows good rains through the western Corn Belt and south-central Plains on Tuesday, with the heaviest totals of 3+" seen in eastern KS/southwest MO. Further to the north in IA/MN/WI, totals were a lesser 0.5-1". For Wednesday, the EU model has additional rains slated for N IL/IN/MI of 1-3", as the slow moving frontal boundary continues to work its way north and east.
- Forecasts otherwise moved rains from the second storm system this weekend/early next week slightly further to the south, but were unchanged in the overall forecast of still seeing two additional storm systems for the eastern US over the next 10 days. Week two forecasts were little changed overnight as well, and continue to show a mixed bag of equally above and below average precip chances for most of the Midwest, while the Gulf Coast and southeast stay in above average moisture patterns.
- Temperatures in the 5-10 day period trended cooler in the south/south-central US, as the below average air temps seen through the central US this week are now expected to linger into next week. The west is still expected to continue seeing heat, while the 10-15 day map still shows this heat then returning to the eastern US by the second half of the month.