AM Comments June 5 2025
Good morning. Another choppy, low-volume, overnight trading session has been seen at the CBOT to get Thursday started, with the feed grain markets trading marginally higher and the soy complex dipping into the red so far this morning. Overnight news was again on the quiet side, as there was little new to speak of on any of US weather, China, or broader trade agreements/policy decisions in general, which have continued to dominate market rhetoric this week. We've said it recently, but until there are more knowns on any of these situations, we see the price environment at the Board of Trade as a choppy one, with neither the bulls or the bears able to sustain a longer term price move. For now, a trade deal + any sort of weather-induced production issue over the next few months likely means current prices are significantly undervalued, while the lack of a deal and another record or near-record crop come fall would lead us to assume we likely see values that are quite a bit lower than we're trading today; stay risk aware. Corn futures to start Thursday are trading 1-3 cents higher, soybean futures are trading 1-4 cents lower, and the Chicago wheat market is trading 3-4 cents higher. Products are lower, soybean meal is down $1-2/ton, and soybean oil is down 20-30 points. Outside markets are trading quietly higher, crude oil futures are up 20-30 cents/bbl, the Dow Jones index is up 30 points, and the US$ index is up 5-10 points; the S&P500 and the NASDAQ are both near unchanged.
Today's Reports: Weekly Export Sales; Weekly Jobless Claims
- This morning's weekly export sales report for the week ending May 29th is expected to show old crop corn sales in the week between 775k-1.4 mil mt's, old crop soybean sales between 100k-500k mt's, and old crop wheat sales between (200k)-100k mt's. For new crop, corn sales are estimated between 20k-250k mt's, soybean sales are estimated between 0-100k mt's, and wheat sales are estimated between 300k-800k mt's.
- Chinese authorities said on Thursday that the chances for severe flooding were likely increased for the June-August period in northern China this year, following drought conditions in the area seen through most of Spring. The lack of rain has dried soils and caused a lack of vegetation, which will increase the likelihood for flooding should heavy rains return later in the season.
- In the latest update to the ongoing bird flu situation in Brazil, Ag Minister Carlos Favaro on Wednesday said there were "strong indications" that the world's number one poultry exporter had contained the outbreak of bird flu that had been found on a commercial farm in RGDS in southern Brazil. Chicken prices in the country have fallen around 7% according to Favaro since the outbreak began.
- Following a delay in the release of the USDA's quarterly Outlook for US Agricultural Trade last week, the agency announced that they would be reviewing all non-statutory reports, saying in a statement, "Given this report is not statutory as with many other reports the USDA does, the dept is undergoing a review of all of its non-statutory reports, including this one, to determine next steps."
- According to sources familiar and also a Wednesday Politico article, the Trump admin delayed and redacted the forecast that was supposed to be released on May 29th to June 2nd due to the report showing an increased ag deficit that would seem to against Trump's message that his policies would reduce US trade imbalances. The released version still showed said deficit, but stripped any comments and analysis regarding the numbers.
- China, in a move to counter increasing trade hostilities from the US and Europe, announced it would be restricting exports of rare-Earth elements, which sources say has already had an impact on manufacturing in Germany. However, China has also offered the EU a massive Airbus purchase deal, as the push-and-pull negotiations between the world's largest economies seems to be ongoing.
- The European Central Bank is widely expected to once again cut its main lending rate later this morning to a level of 2%, as headline inflation for the bloc earlier this month had already reached the bank's target. Key in today's decision, though, will be whether policymakers offer any hints of further rate plans this summer, as targets are hit but ongoing global trade situation remains murky at best.
- According to news outlet Reuters, there were no concrete developments on trade deals as of this morning following the Trump administration's Wednesday deadline for negotiation countries to submit their best trade proposals. Trump is scheduled to meet with German chancellor Friedrich Merz at the Oval Office later today, but it is unclear this morning whether any sort of deal or agreement is expected.
- 48-hour satellite data shows a bulk of the Midwest received good rains over the last couple days, with totals ranging from 2-4" in parts of MO and KS, while streakier rains of 0.5-2.5" fell across IA/IL/IN and then further north into WI and parts of MI.
- Models this morning see this line of storms continuing to work and north and east, while another cut-off low looks to make its way into NE/the Dakota's by later this evening. This system then looks to provide more scattered precip to the eastern Plains and western Corn Belt through the day on Friday, with heavier rains then again expected for the mid-south and southern Corn Belt through the weekend and into the first part of next week.
- Again little to no change in the week two forecast overnight, as there is also model agreement here on this precip pattern of wet in the south/southeast and marginally drier through the central Midwest continuing into the back half of June. The EU and GFS are more aligned on their outlooks this morning than they were in previous days this week. Temperature forecasts are also still showing cooler air in the 5-10 day period for the south-central US next week, with warmth generally expected elsewhere, especially in the west.