5.16.25 Tredas Weekly Recap

Weekly Action:

July25 Corn down 6 to $4.435

July25 Beans down 2 to $10.50

Dec25 Corn down 7 at $4.355

Nov25 Beans up 5 to $10.355

July25 KC Wheat down 1 to $5.165

June25 Hogs up 2.75 to $100.325

June25 Fats down 2.45 to $212.22

May25 Feeders down 1.10 to $296.85

 Grains:

- Planting progress across the Midwest continues to advance quickly with warm dry weather.

- On Monday corn was 62% planted, up 22% from last week, and ahead of the average of 56%. Estimates for next Monday put corn planting around 80%.

- Soybeans were 48% planted, up 18% from last week, and ahead of the 5 year average of 37%. Estimates for soybeans put them at 60-65% planted next Monday.

- Spring wheat planting was 66% complete, up 22% from last week, and ahead of the 5 year average of 49%. 

-Weekly Export Sales Recap

-Corn sales last week were very strong again at 66 million bushels which was above market expectations and similar to the previous week’s sales of 65.4 million. Total export sales sit at 2.44 billion bushels up 28% from last year and the recently raised USDA export projection are now set at 2.6 billion bushels.

-Soybean sales of 10.4 million bushels were at the bottom of trade expectations and below the previous week’s 13.8 million sales. Total sales for the year are at 1.76 billion, up 13% from last year.

- Old crop wheat sales were 2.2 million bushels with 3 weeks left in the marketing year and new crop sales were a strong 27.4 million bushels. Old crop sales for the year sit at 789 million, up 14% from the previous year, while new crop sales of 121 million are almost identical to last year at this time.

Corn – China and the US deescalated trade tensions early this week with both sides lowering tariffs for 90 days in order to continue talks on a trade deal. We saw a short lived bounce, but corn futures drifted lower again this week especially new crop as planting pace and forecasted rains maintain a good start to this year’s growing season. It’s still early and we are getting into the best part of the seasonal period to catch a rally so we’ll remain ready to make sales if we catch a bounce in the weeks ahead. Old crop exports remain strong and ending stocks are tightening which was the driving factor for the rally early this year, but as we have the uncertainty with tariffs and we near the Brazilian corn harvest traders are moving to the sidelines in grains with fund positions near even. If we get trade deals that increase export demand or a weather issue develops there’s plenty of upside potential from current prices but without one of those the easiest path is lower in the short term. Brazil announced this week that their corn crop estimate was being raised up to 126.9 million metric tons, which is an 11.4 MMT increase from last year. Brazil’s domestic corn consumption continues to increase especially for ethanol so many of these bushels could stay home and not add to world supply. The global stocks to use ratio (see chart below) on corn could potentially be the tightest since 2012/2013 which itself doesn’t guarantee higher prices ahead, but could likely lead to more volatility which typically gives us opportunities. Another thing to watch is energy prices especially crude oil which lately has been trading between $55-65/barrel which is the low side of the range for the year. Corn is highly sensitive to oil prices as it relates to ethanol prices/demand so a move back towards $75 or above would also help lift corn prices if that happens.

Soybeans – Beans rallied early in the week on hope that a ruling would be made on renewable fuel mandates for the next 5 years but that has been slow to happen and now expectations are that any decision could be a few months away and that levels may be lower than what was initially recommended. Soy oil futures have lost the most this week with a limit down close yesterday amid uncertainty on future demand.  It was believed that only US, Canada, and Mexico feedstock would be allowed in this mandate but now with lower Chinese tariffs used cooking oil could still be an option that would act to limit grain demand.  The soybean crush report yesterday showed the crush in April totaled 190 million bushels, up 21 million year over year which was a record for the month. Soy oil stocks at the end of April were down 17% from last year and seasonally crush declines into fall so stocks likely remain lower through the next several months. With tight ending stocks projected the soybean market is poised for a rally later this year, but the market needs a catalyst whether that’s a weather issue leading to lost production or an increase in demand for renewable fuels or exports.  Watch for volatility to remain high as we move forward and news headlines will continue to drive prices.

Wheat - The Wheat Quality Council’s tour this week estimated the Kansas wheat yield at 53.0 bu/acre compared to the USDA’s estimate at 50 bu/acre which is the second highest yield estimate on record for the tour and about 10 bu higher than the 5 year average. That puts the Tour’s total production estimate at 339 million bushels which is slightly below the USDA’s estimate of 345 million due to a lower harvested percentage because of heavy disease pressure that was found across the state. The Tour is estimating that 87.5% of the planted acres will be harvested vs USDA’s estimate of 94.5%.  While there are no official crop tour estimates for the soft wheat crop there is talk that there could also be quality and disease issues with all the rain the eastern belt has seen this spring. That will be more of a discussion as harvest nears.  In the world news French soft wheat conditions slipped 1 point to 73% good/excellent which is still 10% above last year at this time.  Chinese wheat areas have been battling drought most of the spring and temps next week are expected to exceed 100 degrees which will impact 27% or more of China’s wheat production.

Livestock: 

At the end of last week cash cattle trade was higher in all regions and at record prices. Dressed trade in the north was at $355-60, up $6-11, and live sales were at $225-228, up $3-6. Boxed beef values have been rising also which is lending support to higher cash prices.  Over the weekend the USDA again closed the Mexico border to all cattle coming into the US due to the northward spread of screwworm. The US imports and average of 97,000 head of feeders per month from Mexico which is about 5% of total feeder supplies for the year. It’s uncertain how long this closure will last beyond the initial 15 days, but it will continue to tighten supplies. Futures were up strong on Monday with feeder up $4+ and live cattle up $2+ but a top was made on Wednesday and prices have seen a sharp correction into yesterday’s close. Prices tried to bounce today and we’ll see if that carries over into next week as charts appear ready for a further correction but cash prices are still moving higher which could add support for another move up.

Weather:

Warm, dry, and windy weather has been the norm for the last week, but that is set to change. Cooler temps are coming with widespread rain across the Midwest next week. This is perfect timing for newly planted and emerged crops and expectations are high for the first crop condition ratings of the year on the 26th. There remains large areas of dryness as shown on the drought monitor that will continue to be watched but at this time the concern is lessening.  

Economy:

U.S. consumers are becoming increasingly worried that tariffs will lead to higher inflation, according to a University of Michigan survey released Friday. The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022. The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%. However, the majority of the survey was completed before the U.S. and China announced a 90 day pause on most tariffs between the two countries. The trade situation appears to be a key factor weighing on consumer sentiment.

The GOP-led House Budget Committee voted to reject a sweeping package for President Donald Trump’s agenda today, dealing an embarrassing setback for Republican leaders. The vote in the Budget Committee was 16-21, with five conservative hard-liners joining all Democrats in voting against the multitrillion-dollar legislation. Negotiations with the GOP holdouts will continue in the coming days and Republicans on the panel will try to regroup as soon as Monday. Republican leaders concede the massive bill isn’t ready for prime time, and that critical changes need to be made to tax and Medicaid provisions to win over reluctant members.

Something That Probably Means Nothing:

Ninety years ago during the Dust Bowl, the worst dust storm occurred on April 14, 1935. News reports called the event Black Sunday. A wall of blowing sand and dust started in the Oklahoma Panhandle and spread east. As many as three million tons of topsoil are estimated to have blown off the Great Plains during Black Sunday.

Quote of the Week:

“Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit.” – Conrad Hilton