Good afternoon. Grain markets saw mostly lower closes at mid-week on Wednesday, as Tuesday's speculative money inflow dried up a bit and volume on spot corn and beans retracted by about a third from where it was yesterday. There have been leaks and rumors throughout the day regarding Trump's tariffs announcements this afternoon in the news and on social media, but amid a lack of confirmation, it remains that most all market participants will be waiting to hear details directly from the horse's mouth later this afternoon.
CK closed Wednesday at 4.57 and 3/4, down 4 cents. CN was down 3 cents at 4.65 and 1/4. Inside day for CN. SK closed at 10.29 and 1/2, down 4 and 3/4. SN finished at 10.45, down 4 and 1/4. Inside day for the beans also. WK closed at 5.39 and 1/4, down a penny and 1/4. Products were mixed, May soybean meal closed at 287.20, down $5.10/ton, and May soybean oil closed at 48.50, up 1.06 cents/lb. New contract lows for May meal at 287.10, and bean oil came within a tick of the February high at 48.55. Livestock markets were higher on Wednesday, April live cattle closed at 210.37, up $1.25, April feeders closed at 288.87, up 60 cents, and April hogs closed at 87.45, up 7 cents. Outside markets have had a choppy day but are mostly higher at the moment; crude oil futures are up 50-60 cents/bbl, the Dow Jones index is up 280 points and the US$ index is down 45-50 points. The S&P500 is up 40 points and the NASDAQ is up 160 points. Gold futures are up $15-20/oz, but have had an inside day so far and have not made new contract highs for the first session this week.
Spreads ended the day mostly lower, with corn spreads down a half cent to down 4 and 1/4 cents, and soybean spreads finished 3 and 3/4 cents lower to a quarter of a cent higher. CK/CN closed at -7 and 1/2, down a penny, and SK/SN closed at -15 and 1/2, down a half cent. SK/SN traded to its lowest level since late February at -16.
USDA this morning announced a daily sales flash for the first time since March 14th, as private exporters announced sales of 135,000 mt's of soybean cake and meal for delivery to the Philippines during the 2024/25 marketing year.
Though mostly a quiet/lower day in the ag space, bean oil was one of the few markets where speculative buying continued, as traders are still placing bullish bets on the thought that renewable fuel blending mandates will be raised in the coming years. AgResource Co. reported this morning that the coalition's proposal to the EPA yesterday was for 5.25 bil gallons of renewable diesel and 15.0 bil gallons of ethanol for 2026-2028. Like we mentioned in our morning wire, sources familiar have indicated that the EPA will likely push for a two year proposal as opposed to three, and most familiar also assume that the EPA will seek lower mandates than those proposed by the coalition yesterday, meaning there remain a lot of unknowns. From here, the matter now resides squarely in the hands of the EPA, and there is no set-in-stone timeframe for them to make any sort of decision. It is hoped they will come to a conclusion by fall, but as is the case with most policy-related things, this is far from assured.
This morning's weekly ethanol production report from the EIA showed a rebound in production from last week in the week ending March 28th, but numbers were still generally at the lower end of the range of production figures that have been seen through the first three months of the year so far at 1.063 mil bbls/day; this was up just under 1% from both last week and the same week last year. Stocks in the week remained volatile, and were down 738k bbls from the week prior at 26.612 mil bbls; three weeks ago, stocks declined 800k bbls, then rose 775k bbls last week, then again declined nearly 730k bbls this week. We have little explanation for this other than the fact that stocks are near all-time record high levels which is producing increased week-to-week volatility in the reading. Corn usage in the week was estimated at 105.0 mil bu's, which brings cumulative marketing year usage to 3.196 bil bu's. Other data out of the EIA report showed crude oil stocks in the week took a sharp jump of 6.165 mil bbls to 439.792 mil, while gasoline stocks were down 1.551 mil bbls to 237.577 mil, and distillate stocks were up 264k bbls at 114.626 mil. Implied gasoline demand in the week was seen at 8.495 mil bbls/day, compared to 8.643 mil last week 9.236 mil in the same week last year.
We will (hopefully) be smarter in another couple hours as it pertains to the tariffs, and won't spend a ton of time speculating on the hearsay that was going around during the day today. As it pertains to other countries around the world, sources indicated that conversations had been had with several regarding deals or some type of agreement in the past weeks, but that these conversations had largely ceased in recent days leading up to the announcement. It was reported today that Mexico's President Claudia Sheinbaum told reporters that her country would not engage in tit-for-tat tariffs with the US, while sources from the EU said that European Commission had put together a set of emergency measures that could possibly enacted to help parts of its economy that may be most affected by new US tariffs. Sources also indicated that Sheinbaum had had conversations with Canadian PM Mark Carney over strengthening a trade deal, but we had no details of this conversation as of this writing.
US Midwest weather looks to remain active through the rest of the day today and into tonight, as a line of strong storms is working across the area. NOAA's Storm Prediction Center continues to see the highest chances at severe weather in area along the Mississippi from Arkansas to southern Illinois, though a wider area of the south/southeast could still still potentially see strong winds and heavy rainfall from this storm system. As this system then exits, another is seen working into the area almost immediately, with rainfall expected to continue falling through the south and mid-south from now into the early part of next week. Beyond here, a drier pattern then looks to emerge for most all of the lower 48, as models continue to be in good agreement on this solution. Ridging to the southeast of the US will allow temps in this part of the country to stay warm for another few days while the west stays cool, before this pattern flips and brings ridging into the west, which will warm things up here while cooling the east. The 10-15 day period then shows the warmest temps staying in the west, but also shows the east returning to average or slightly above average levels through the week of April 12th-17th.
Again not a lot of forecast updates for Brazil or Argentina at mid-day on Wednesday, as models continue to show limited precip chances throughout most of Argentina for the next week, while Brazil will see good precip through a narrow band of its Ag Belt in the center-east part of the country but dryness through most of its other growing regions. Further out, week two forecasts are trying to bring rain back in to the northern parts of Argentina and also to southern Brazil, but run-to-run volatility is keeping confidence low in this solution. Temperature-wise, cooler air is seen working north into southern Brazil over the next week, but central and northern areas look to stay average to slightly above average.
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