Written Commentary
SOYBEANS
The soy complex is nearly unchanged at the start of the week as tariffs weigh on the market while rising Brazil soy premiums are supportive. Brazil’s soy premium is nearly double the 5-year average level for this time of the year, buoyed by losses in Rio Grande do Sul and heavy Chinese demand.
SOYBEAN MEAL
Soymeal prices saw a short-term boost last week due to the Argentine oilseed workers’ strike, but the government has forced the workers back to work while negotiations move forward this week. Another strike cannot be ruled out, but with the Argentine government heavily reliant on export revenue, we anticipate they will push both sides to a reasonably quick resolution.
CORN
The market is seeing some strength this morning on the lower US dollar and more aggressive fund selling than expected last week. CFTC data showed funds sold more than 73,000 contracts as of Tuesday last week, reducing their net long position to under 147,000 contracts, a 14-week low, and reducing the chances for further heavy long liquidation. In addition, lower prices last week encouraged some demand with a couple of morning flash sales. Brazil’s corn stocks are relatively tight and will likely stay that way as their harvest will not start for another couple of months.
WHEAT
The wheat market is rallying to start the week on weather concerns. Last Friday, a major windstorm moved across the southern Plains, resulting in blowing dust and wildfires. This week, windy conditions and little precipitation are forecast for the southern half of the US Plains. As the US HRW crop comes out of dormancy, moisture needs are increasing, and there is little chance of any soaking rains on the horizon. Temperatures across the Plains are expected to trend above normal for the next 2 weeks. In addition, Black Sea region growing areas are seeing net drying, raising the need for traders to build in some weather premium.
CATTLE
April cattle closed higher Friday for the seventh higher close in the last 9 sessions. Strong cash cattle trade was the driving bullish factor. The market has ignored concerns that US meat plant export registrations to China expired over the weekend, and China has ignored renewal requests.
HOGS
Wholesale prices were firm Friday, and April hogs reversed higher and closed strong after pulling back most of last week. The US dollar is also supportive, hovering just above 4-month lows. CFTC data showed Managed Money traders reduced their net long position to a 5-month low. Traders remain concerned that export registrations for more than 1,000 US meat plants granted by China under the Phase 1 deal lapsed this past weekend. The USDA says China has failed to respond to repeated requests to renew plant registrations. China may use the registrations as additional leverage in trade negotiations.
MILK CLASS III
April Class III milk finished with a sizable weekly gain, breaking a three-week losing streak after falling to a new contract low on Monday.
ENERGIES
May Crude Oil is higher this morning, drawing support off US military strikes against the Houthis on Saturday over the group’s attacks against Red Sea shipping. Also supportive was some positive demand news out of China for a change. Official data released by China showed the nation’s crude oil throughput in January and February was 119.17 ,million metric tons (14.74 million barrels per day), up 2.1% from last year. Chinese retail sales also improved in January-February, which is viewed as supportive to oil consumption.
May Natural Gas is lower this morning, as it consolidates last week’s steep declines from contract highs, which it achieved off peak concern about Canadian tariffs and the potential to interrupt Canadian natural gas supply into the US. Those concerns eased after the Ontario Premier met with US officials last week.
DOLLAR INDEX
The U.S. dollar index is lower and is hovering close to five-month lows as interest rate differentials have turned against the greenback.
COCOA
May Cocoa fell to its lowest level since November on Friday, and it is close to testing that level this morning. It is also close to testing the 200-day moving average, a line that it has held above since November and which could be a key bull-bear line today. Ivory Coast cocoa arrivals for the week ending March 16 came in at 14,000 metric tons, steady with the previous week and up from 0 for the same week last year
COFFEE
Brazil’s relative lack of rain during their rainy season is an ongoing concern for the coffee crop there. World Weather Service expects a routine occurrence of light rain this week, but more will be needed to improve crop quality. There is still a full month left to the rainy season and coffee areas need every bit of moisture they can get. Some of the production impacts from recent weeks of dry weather may not be reversible.
COTTON
May Cotton has made a significant rally off its contract lows from early this month with improving export sales, a weakening dollar, and a deeply oversold condition of the market attracting buyers.
SUGAR
May Sugar gapped higher overnight and traded to its highest level since February 26. The market is approaching the 20-cent level, an area that caused trouble for the bulls late last month when it made four attempts to take that level out in four straight sessions and sold off hard when it failed to do so.
PRECIOUS METALS
April gold futures remain near record highs as strong demand for safe-haven assets persists in light of ongoing trade tariff concerns and geopolitical tensions. Worries over a worsening trade war weighed on sentiment, as the U.S. and its major trade partners exchanged new tariff threats.
May silver futures are lower on Monday after on Friday advancing to the highest level since October 30, 2024.
May copper futures advanced and are approaching a ten-month high, driven by increased demand expectations following China’s recent stimulus measures.
EQUITIES
Stock index futures are mixed today after sharp recovery gains on Friday. In addition, the March S&P 500 futures on the daily chart broke out above a steep downtrend line.
Retail sales in February increased 0.2% when a gain of 0.7% was expected.
INTEREST RATES
The yield on the 10-year U.S. Treasury note held steady at 4.3% on Monday as investors awaited the Federal Reserve’s policy decision this week.
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