Ag Markets Cont to Gauge Trade Tariff Impact

MORNING AG OUTLOOK

Mostly lower trade across the Ag space overnight as markets continue to and gauge the impact Friday’s decision by the SCOTUS that rejected Pres. Trump’s use of the IEEPA to impose trade tariffs.  Shortly after the high court’s ruling on Friday the President imposed across the board 10% tariffs using Section 122 from the Trade Act of 1974 which he then raised to 15% on Saturday.  This act however limits tariffs to only 150 days.  The Yale Budget Lab estimates the average overall effective tariff rate after Saturday’s announcement rests at 13.7%, down from 16% before the SCOTUS ruling.  Much uncertainty still exists ahead of Pres. Trump’s visit to China in 5 weeks.  Recent rains led to increased corn and soybean ratings in the weekly update from the BAGE.  Forecasts remain non-threatening for both Brazil and Argentina.  Mostly dry across the nation’s midsection this weekend while rain and heavy snow impact the SE and East coast.  Precipitation this week will again favor the ECB.  Lighter amounts for the central corn belt with very little moisture for the WCB and Northern plains.  Completely dry the SW plains.  The US SSS is near unchanged, recovering from steep losses overnight.  Spot crude oil is slightly higher with US stock indices lower.

Corn: 

Mch-26 is down $.01 ½ at $4.26 holding within Friday’s range.  First support is at this month’s low of $4.24 with resistance is the 50 day MA at $4.34.  The BAGE reports Argentine crop ratings improved 8% to 51% G/E while holding their production forecast at 57 mmt, well above the USDA’s est. of 53 mmt.  Ag. Rural estimates Brazil’s 1^st corn harvest has reached 28% as of Feb. 19^th while their 2^nd crop plantings are at the halfway point.  Plantings in Mato Grosso have reached 66% just below YA at 67% and the long term Ave. of 72%.  COF as of Feb. 1^st at 11.505 mil. head were down 2% from YA, in line with expectations.  Placements at 95% were slightly below expectations while marketings at 87% were in line.

Soybeans: 

Mch-26 beans are down $.09 at $11.28 ½ holding within Friday’s range.  Mch-26 meal is down $5.00 at $304.80 holding near its 100 day MA.  Mch-26 oil is up 15 points at 59.07 also holding within Friday’s range.  The BAGE reports Argentine crop ratings improved 1% to 33% G/E, still well below the historical average of 42%.  72% of the crop is setting pods or beyond.  They held their production forecast at 48.5 mmt, in line with the USDA.  Ag. Rural estimates Brazil’s crop is 30% harvested.  Harvest in Mato Grosso, their largest production state, has reached 66%, in line with YA and ahead of the long term Ave. of 57%.  Friday’s Supreme Court ruling would appear to give the US less leverage ahead of Pres. Trump’s trip to Beijing Mch. 31^st thru April 2^nd reducing the odds of addition US soybean purchases.

Wheat: 

Prices range from $.02 – $.08 lower with KC futures the downside leader.  CGO Mch-26 is down $.04 ¼ at $5.69 ¼ holding within Friday’s range.  KC Mch-26 is down $.08 at $5.64 1/4.  Both traded to 7 month highs on Friday.  Speculative buying amid expanding drought in the US southern plains has fueled to price increase.  Ukraine’s grain lobby forecasts their production will rise nearly 3% in 2026 to 23.1 mmt, as higher acres more than offset lower yields.  The USDA is forecasting production at 23 mmt.  Algeria is seeking 50k mt of optional origin soft wheat for Spring shipment.  The tender closes tomorrow.

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