Written Commentary
CORN
Prices finished $.04-$.06 higher in choppy 2 sided trade. Spreads finished mixed. July-25 traded to a fresh 4 week high with next resistance at the March high of $4.83 ¼. The midday announcement that the Trump Administration was suspending targeted tariffs for 90 days sent shock waves across global markets. Planting across the south and ECB will be delayed following LW’s heavy rain and cool/damp conditions this week. Warm, dry conditions across the WCB should enable plantings to get underway. EIA data showed ethanol production slumped to a 10 week low at 1,021 tbd, or 300 mil. gallons, down from 312 mil. the previous week and down 3% from YA. There was 102 mil. bu. used in the production process, or 14.6 mil. bu. per day, below the 14.86 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 3.287 bil. bu. used, or 15.2 mbd, an annualized pace of 5.554 bil. Stocks jump to 27.0 mil. barrels, above expectations. Implied gasoline usage dipped 1% LW to 8.425 mbd, and was down 2% YOY. Export sales tomorrow are expected to range from 30-60 mil.
SOYBEANS
Prices were higher across the board with beans up $.20, meal was up $3 while bean oil jumped 125 points. Product spreads firmed while bean spreads were mixed. July-25 beans surged to a fresh high for the week with next major resistance at the 100 day MA at $10.37 ½. July-25 oil bounced off support at its 100 day MA at 44.26. Despite today’s chaotic trade, crush margins were little changed at 1.43 ½ bu. while bean oil PV rebounded to 44%. The pause in tariffs would allow time for US trade officials to negotiate with countries that want to avoid reciprocal tariffs. The 10% blanket tariff across nearly all US imports will remain in place. China was the exception to today’s tariff pause as the Trump Administration raised their tariffs to 125% from the 104% that kicked in less than 24 hours ago. The USDA announced the sale of 198k tons (7.3 mil. bu.) of soybeans to an unknown buyer. Members of a biofuel coalition and big oil formally recommended the EPA raise biomass diesel mandates to 5.25 bil. gallons annually. While well above the current 3.35 bil., it was below the 5.50–5.75 bil. range hoped for by RD producers. Mandates remains well below the current US capacity of 6.575 bil. gallons. Although current US and global supplies rest somewhere between adequate to abundant, if US yields do not reach trendline combined with acres at a 5 year low it wouldn’t take much to see a much tighter US balance sheet for 25/26 MY. A key component of that will be how the Chinese economy (demand) hold up as the trade war heats up. Export sales are likely to range from 8-24 mil. bu. of beans, 100-450k tons of meal and 5-35k tons of oil.
WHEAT
Prices were higher ranging from $.02 better in CGO to up $.08 in MGEX. July-25 CGO backed up after failing to trade above yesterday’s high. Early strength in July-25 KC was capped at its 100 day MA at $5.85 ½. MGEX gained on both KC and CGO this week, perhaps an effort to attract a few more acres this spring after combined spring wheat and durum acres are expected to be the lowest in at least 15 years in the March survey. Above normal temperatures are starting to build across the US Southern plains, reaching much above normal levels by this weekend. Little to no rain for the plains and WCB will help corn planting get underway. Week 2 of the outlook brings better prospects for rain in the Southern plains. Estimates on the amount of durum Algeria has bought in their recent tender range from 200k-450k mt. Indications are they paid near $357/mt CF for shipment in May or June. Likely origin is Canada, US or Australia. IKAR forecasts Russian total grain production in 2025 will reach 129.5 mmt, with wheat production expected at 82.5 mmt, just a touch above YA. Export sales tomorrow are expected to range from 0 – 20 mil. bu.
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