Written Commentary
OPENING COMMENTS
Geopolitics:
US and China trade officials are set to meet this weekend in Geneva Switzerland. Today, goods from the US entering China face a 125% tariff and goods shipped from China to the US are subject to 145% tariffs. There are mixed predictions for this upcoming meeting, some believe we will walk away unchanged and others think a deal will be struck soon by lowering tariffs as shallow as 20%. The ag markets have reacted positively to the news. Tensions between India and Pakistan are escalating. 5 Indian jets were shot down last night. India responded with missile strikes targeting “terrorist infrastructure” across 9 different areas. Pakistan reported 26 people were killed including women and a three-year-old girl, with 46 people wounded. Pakistan’s Prime Minister Shehbaz Sharif called the strikes “an act of war” and has vowed to retaliate. They both have about the same amount of nuclear warheads: 170-180 each.
Macroeconomics:
The Federal Reserve’s two day meeting will conclude today. The federal interest rate decision will be released at 1:00pm CST and Jerome Powell to speak at 1:30pm CST. Expectations: we don’t move off the 4.25-4.50% rate currently established. President Trump has repetitively said he wants the fed to cut rates, but Jerome Powell has consistently said he believes we need to cautiously move forward unchanged until more prominent economic signals arise.
Ag Fundamentals:
Row crop board prices are reacting higher this morning to news of a potential trade deal between the US and China. Tomorrow’s weekly export sales estimates for wheat range between 400K-600K, for corn 1.3M-1.75M and for beans 300K-600K. Monday, May 12th will be the USDA’s next WASDE report. Estimates suggest, they will lower corn and soybean 24/25 stocks from last month and raise wheat ending stocks. Monday’s report will be the first time the USDA includes the 2025/2026 marketing year balance sheet. Markets are expecting to see a new crop corn ending stock north of 2 billion bushels, and slightly larger wheat supply and a slight decrease for soybeans. Brazilian soybean production is expected to remain near the 169M MT and corn is set to increase by around 1 MMT to126 MMT. By the end of April, Argentina was 24% done with soybean harvest, which is 10-15% below the 5 year average pace. Their corn harvest has progress above pace, and at the end of April was near 32% complete.
The Probability the Fed Leaves Interests Rates Unchanged is over 95% this morning. (4.4% chance of a 25 basis point cut).
Export & World News
South Korea purchased 387K MT of animal feed corn in two separate tenders, origins unknown.
Malaysian palm oil futures were down 65 ringgit, now at 3727.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.70 (expanded $1.05); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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