Good afternoon. Happy Friday. Ag markets were mostly lower to end the week on Friday, with further talk of tariffs out of President Trump again being the primary driver of lower values throughout the day. Though Fridays have been trend days recently, renewed trade war fears caused a bit of 'risk-off' action going into the weekend, with the funds still long and weather also improving in South America.

CH ended the week at 4.87 1/2, down 7 and 3/4. CK was down 7 cents at 5.00 1/2. SH closed at 10.49 1/2, down 11 cents. SK finished at 10.65 1/2, down 10 1/4. WH closed at 5.82 3/4, down 5 cents. WH made new highs for the week every day this week. Products were mixed, March soybean meal closed at 301.40, down $5/ton, and March soybean oil closed at 45.98, up 58 points. Livestock markets closed mixed, April live cattle closed at 196.77, unchanged on the day, March feeders closed at 264.90, down 40 cents, and April hogs closed at 92.15, up 40 cents. Inside day in the cattle markets. Outside markets are mixed, crude oil futures are up 30-40 cents/bbl, the Dow Jones index is down 450 points, and the US$ index is up 35-40 points. The S&P500 is down 60 points and the NASDAQ is down 280 points. New contract highs for both gold and coffee to end the week.

Spreads ended the week lower, corn spreads were down 3/4 of a cent to 4 cents, and soybean spreads were down a half cent to 3 cents. CH/CK ended the week at -13, down 3/4 of a cent, and SH/SK closed at -16, down 3/4 of a cent also. New contract low for CH/CK at -13 1/4, and SH/SK traded to its lowest level since the first week of November. Also new contract low for SK/SN at -15 3/4.

For the week: March corn was up 5 and 1/2 cents; May corn was up 7 and 1/2 cents; March soybeans were up 7 and 1/2 cents; May soybeans were up 8 cents; and March Chicago wheat was up 23 and 1/4 cents.

Big news to end the week in the ag space, as we mentioned at the top, was further headlines from President Trump that more tariffs would be going on as early as this afternoon, but more likely next week, on all imports coming into the US from other countries that currently tariff our goods going to them. Trump said the tariff rate would be equal to the rate charged to our exports. Details were otherwise lacking though, as it was unclear at the time of the announcement exactly what countries would be affected. The President also mentioned in a meeting with Japan's Prime Minister that tariffs on the country were possible, but didn't seem them as likely due to the two countries working together to lower the trade imbalance; in 2024, Japan had a trade surplus with the US of $68.5 bil, while this number was at $71.6 bil in 2023. Other headlines throughout the day on Friday related to tariffs and trade included an executive order delaying the increased tariffs on small-value, or de minimis, goods from China and also comments from the EU that they would be offering to cut tariffs on US auto imports as part of a deal to avoid a larger trade war with the US. We've mentioned it several times but will continue repeating that these headlines are not likely to abate anytime soon, as it appears one of Trump's first targets in office is the global trade deficit; this makes it hard to predict who he will go after next, but preparatory comments out of Europe would lead one to believe they will likely come under Trump's microscope sooner rather than later.

Non-trade related news to end the week included a fresh quarterly grain stocks update from Statistics Canada early this morning, and then also updated CFTC commitment of traders data later this afternoon. Starting with this morning's StatsCan report, data showed that as of December 31, total wheat stocks were seen at 24.481 mmt's, which was up just 0.9% from the year prior. Barley stocks were down 9.2% on the year to 4.958 mmt's, canola stocks were down 19.2% to 11.382 mmt's, and corn stocks were up 0.2% at 11.317 mmt's. Soybean stocks were up 10.9% from 2023 at 4.151 mmt's. Of note, the canola stocks figure was the second smallest for December in the last ten years, only topping 2021, and was attributed to both strong exports and a drop in production.

Commitment of traders data from the CFTC showed that in the week ending Tuesday, February 4th, managed money traders were noted buyers of corn, wheat and meal, while having a quiet week in the beans and bean oil. The report showed fund traders are now net-long 364,217 combined contracts of corn futures/options (+13,495 on the week), net-long 57,029 combined contracts of soybean futures/options (+535 on the week), and net-short 90,442 combined contracts of Chicago wheat futures/options (+20,340 on the week; of note, this marks the seventh consecutive week of buying by fund traders in both corn and soybeans, and was the largest week of fund buying in Chicago wheat since the week of April 30th last year. In soy products, funds are now net-short 33,460 contracts of meal (+18,831 on the week), and are net-long 42,215 contracts of bean oil (+2,448 on the week).

Weather forecasts for South America remain the other ongoing market theme, but were again little changed at mid-day on Friday. The weekend will feature mostly dry conditions throughout the bulk of Argentina's growing areas, though some thunderstorm activity is possible in the southern part of the country. These storms/rains will alleviate a little bit of the heat in the south, but otherwise, northern areas look to remain above average in terms of temps for at least most of next week. In Brazil, rains through the weekend will be light and variable for most all of the country's ag belt, with the driest conditions continuing to be forecast in the northeast. Like we mentioned this morning, this should allow for a rapid increase in harvest progress in the next 5-10 days. Lead producing state Mato Grosso was 29% harvested as of today, which remains well behind the average of 40%. Forecasts beyond February 13th continue to offer better rains for northern Argentina and a drier pattern for central and northern Brazil.

Weekend weather in the US will feature a storm system across the northern third of the country that will provide a band of snowfall to the northern states and into Canada. The heaviest snows will fall in the northeast according to the GFS. Then into next week, models continue to show several systems bringing moisture to the eastern half of the US, with rainfall totals 3" in parts of the southeast by the end of next week. Temperatures in the short term will mostly continue cooling, with most of the country besides areas along the Gulf Coast returning to cooler to much cooler than average air temperatures by the middle of next week. In the extended forecast, models remain in good agreement on a continued wet bias for a bulk of the US and especially the eastern half, while temperature outlooks show warmth confined mostly to the southwest and the four corner states.

Buckle up for another volatile week next week, with a USDA report and likely more tariff news on deck. Have a good weekend!