Written Commentary
The Ghost in the Machine Q1 2025
March 25, 2025
CORN
Prices were $.03 – $.05 lower today in volatile two sided trade. Despite the weakness spreads did strengthen. Next support for July-24 is the April low at $4.35 ¾. Support for Dec-24 is also at its April low at $4.59 ½. NOAA weather models continue to push back the onset of La Nina, reducing the likelihood for yield reducing heat during the summer months. Export inspections were strong at 54 mil. bu., well above the pace needed to reach the USDA export forecast of 2.150 bil. bu. In addition the USDA announced the sale of 110k mt (4 mil. bu.) of corn to Spain. Money managers last week sold just over 12k contracts of corn, extending their short position to 133k contracts, well off the Feb-24 record at 340k. AgRural estimates Brazil’s 2nd crop corn harvest has reached 5%, above the 1.4% from YA. Corn usage for ethanol production in April-24 at 417 mil. bu. was slightly below expectations and down 11% from March. In the first 8 months of the 23/24 MY corn usage has reached 3.604 bil., up 6% from YA, vs. the current USDA forecast of up 5.25%.
SOYBEANS
The soybean complex was lower across the board with beans down $.20 – $.23, oil plunged 130 – 140, while meal was down $4 – $5. July-24 beans plunged thru 50 and 100 day MA support, while also violating the $12 level trading down to a 1 month low. Next support is the April low at $11.45 ¾. July-24 oil has effectively fallen back to the midpoint of its 42.50 – 46.00 range. Next support for July-24 meal is $355.50, its 50 day MA. Weekend rains were largely as expected. Heaviest rains this week are expected across the central and ECB with lighter totals in the WCB. Temperatures look to remain seasonally cool across much of the nation’s midsection thru mid-June. Export inspections were strong at 13 mil. bu., in line with the pace needed to reach the USDA export forecast of 1.70 bil. bu. MM’s last week were net buyers of 12k beans, just over 17K meal and nearly 5k in oil. The MM long position in meal has swelled to just over 118k contracts, a 6 month high. Census crush in April at 178 mil. bu. were at the high end of expectations, however still down 13% from Mch-24 and down 5% from April-23. In the first 8 months of the 23/24 MY cumulative crush has reached 1.551 bil. bu. up 3.8% from YA, vs. the USDA forecast of up 4%. In order to reach the current USDA forecast of 2.30 bil. bu., May thru Aug. crush will need to reach 749 mil. bu. vs. YA record crush of only 718 mil. End of April bean oil stocks at 2.311 bil. lbs. were above the range of expectations although they were down 2.4% from March and 9% from April-23. Spot board crush margins dropped $.06 today to $.92 bu., while BO PV dropped to 38%.
WHEAT
Prices were down $.05 – $.09 across all 3 classes today, unable to hold overnight strength. It was an outside day down for July-24 contracts in all 3 classes. Next major support for July-24 Chicago is at $6.50 and $6.60 for KC. A hot/dry trend is expected to continue for Southern Russia, eastern Ukraine and western Kazakhstan over the next week to 10 days. Export inspections at 15 mil. bu. were in line with expectations. YTD inspections at 687 mil. are down 5.5% from YA, in line with the USDA forecast. Harvest will likely be reported at less than 5%. MM’s were net buyers in both KC and MGEX futures, however net sellers of nearly 1k in Chicago. ABARE raised their 24/25 Australian production forecast by .7 mmt to 29.1 mmt, in line with the USDA est. Russia Ag. Ministry told Russian media outlets they will find other markets to sell grain after the EU significantly raised tariff’s on Russian grain late last week. IKAR reports the average price for Russian export wheat closed last week at $248/mt, up $1 for the week.
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