AM Comments June 11 2025
Good morning. CBOT markets are quietly higher this morning to start mid-week trading, as an announced framework agreement between the US and China last night caused headline buying on the evening re-open. Aside from that though, Wednesday looks to be a similar day to the previous two this week, with unknowns regarding weather and the longer term demand structure for US crops continuing to limit outside investment in the space to a large degree. We will also see both a USDA and Conab update tomorrow, which while not expected to offer many if any fireworks, could temporarily give one side of the market something to chew on for a few days. Corn futures this morning are trading 3-5 cents higher, soybean futures are trading 3-4 cents higher, and the Chicago wheat market is trading 2-4 cents higher. Products are also quietly in the green, soybean meal is up around $1.50/ton, and soybean oil is up 10-15 points. Outside markets are mixed, crude oil futures are up around $1/bbl, the Dow Jones index is down 100 points, and the US$ index is down 5 points; the S&P500 is down 10 points and the NASDAQ is down 25 points.
Today's Reports: Monthly Inflation/CPI; EIA Weekly Ethanol Production/Energy Stocks
- This morning's weekly ethanol production report from the EIA is expected to show daily production in the week ending June 6th between 1.072-1.104 mil bbls, while ethanol stocks in the week are seen between 24.00-24.74 mil bbls.
- US Commerce Secretary, Howard Lutnick, said yesterday evening that talks with China were going "really, really well" following a second full day of negotiations between the two sides on Tuesday. China's Vice Commerce Minister seemed to also echo the sentiment, saying that the two had reached a framework agreement that builds on comments made recently between the two Presidents and also conversations had during the meetings in Geneva.
- However, other sources this morning are reporting that while the agreement is a step in the right direction, it still offers little in the way of a longer term resolution to the ongoing trade tensions between the two, and was more about optics than actual hard progress. Still, key points in negotiations over the past few days according to those familiar include US export controls on semiconductors and AI technologies and also Chinese export restrictions on rare-Earth minerals, which have been ongoing tension points for both sides.
- Other trade related news this morning includes announced progress between the US and India after four days of talks and negotiations; sources familiar say the two sides are close to an interim agreement that could be finalized by the end of the month. Sources also say the deal could possibly serve as a blueprint for USMCA negotiations that are then expected to take place later this year. And speaking of Mexico, it's also being reported that them and the US are close to an agreement on the steel tariff that has been the source of tensions between the two recently.
- Ahead of Thursday's June supply and demand update from the USDA, traders are looking for similar ending stocks numbers to last month for both crop years; old crop corn stocks are seen down about 25 mil bu from May, while old crop bean stocks are seen nearly unchanged. New crop corn stocks are expected to also be slightly lower on the month at 1.792 bil bu, while new crop bean stocks are seen at 298 mil bu. World ending stocks are seen within one mil mt's of last month's figures for both crops.
- The only other figures that are expected to see notable adjustments are production figures out of South America; traders see numbers for Argentina similar to last month, and also see Brazil's soybean estimate similar to last month. However, the big question mark will be Brazil corn production, which traders see coming in roughly two mil mt's higher than last month at 131.7 mmt's.
- Traders are beginning to debate how much of Brazil's larger corn harvest this year will actually hit the export market, as analysts see increases in domestic feed use and also corn-ethanol production as actually trimming exports from last year, despite there being more total bushels and the crop being the second biggest ever.
- Economists see this morning's inflation report for May showing prices increasing in the month nearly the same as in April, with a 0.2% or 0.3% increase expected; the annual rate is also expected to increase on the month, with economists seeing this number at 2.5% vs 2.3% last month.
- Mostly dry conditions were seen across the Corn Belt on Tuesday, with more of the same generally expected for today. The northwestern Midwest will see rain/thunderstorm potential from a small system this afternoon and into tonight, while rains are also expected to fall throughout most of TX during the day today before slowly moving north by Friday. Totals in both areas according to the EU model are similar to yesterday, with 1-2" generally expected in the north and a heavier 2-5" possible in the south.
- Not a lot new again this morning in the extended forecast, as week two precip maps continue to show above average wetness in the northern and eastern parts of the US, while the west and southwest holds in a drier trend. On the temp side, models still see generally warmer conditions still emerging across most of the country by this weekend, with a warmer pattern then expected to hang around into the end of the month.