Daily Ag Direction 04/07/25
Good Morning!
This week looks to shed the cooler temps and rainfall for warm and dry weather. Markets will continue to digest what tariff news hits the wires as it is rumored that several countries are willing to negotiate to avoid the full blown implementation of Trump’ s tariff announcement. While not surprising volatility will continue to rock markets. Russia’s Sovecon estimated March exports at 1.9 MMT down from 2.2 MMT in February. Paris wheat was up overnight on short covering in the face of continued weather concerns in the EU and US. The COT report on Friday (which reports up to Tuesday of last week) showed Chicago and Paris adding to the net short position, continuing to prime the pump for a short covering rally. Corn managed to finish last week higher despite the chaos, bringing funds net long to 130k contracts. The 200-day ma continues to provide support near $4.53/bu. Soybeans have the most work to do this week. We are still trading above the Dec. low of $9.55/bu. Big rains create the too early speculation of corn acres switching to beans, but it is something to talk about. Hopes for positive US biofuel policy are circulating in discussions due to the stance China has taken with more reciprocal tariffs. If current tariffs hold, beans will have to establish new pathways into the world market. Cattle are falling flat the past two days. China accounted for 15% of our total export program last year. In addition, Japan and South Korea account for another 40% so risks to these trade areas are paramount in cattle. As I have said before, if consumer demand falters, cattle markets will be unable to maintain anything near current levels. Fund positions remain near record longs and when that support falters we could be in a really difficult situation. There is time for some remediation, but policymakers are not providing comforting rhetoric and markets are not fond of the risk.
May KC Wheat +8.0 @ $5.66
July 25 KC Wheat +7.0 @ $5.77
May Corn -1.6 @ $4.59
Dec 25 Corn -2.0 @ $4.45
May Beans +0.2 @ $9.77
Nov 25 Beans +-2.0 @ $9.82
Apr Feeders -3.225 @ $276.200
Apr Live -2.375 @ $200.250
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!
-Trent
