Daily Ag Direction 05/12/25
Good Morning!
It appears that we are going to have a busy week. The Trump administration inked a temporary trade deal with China. In short, the U.S. cuts reciprocal tariffs to 30% from 145% and China cuts reciprocal tariffs to 10% from 125%. This deal is effective for 90 days. The market also needs to position for several USDA data dumps this week. At 11am we have the WASDE report, export inspections at 10am and crop progress at 3pm. The dollar is rallying, and oilseeds are loving the China news. The COT report on Friday showed a new record short in KC wheat. China purchased 400-500k mt of Australian/Canadian wheat but the US was not a participant in that sale. The WASDE report is expected to be bearish for wheat and good growing conditions are expected to persist. Corn planting progress is expected to be 60% with few planting delays. The COT report has funds liquidating corn positions by 57k contracts last week. This would give them an estimated net short of 10k contracts as of Tuesday. The bean market is having a great start to the week due to tariff news. Bean oil is back to recent highs with beans trying to breakout from the 200-day ma. Expected bio-fuel demand could affect the WASDE report today adding to the volatility in an uncertain market. Expect a slight reduction in fall stocks. In cattle, the Mexico border is closed again to feeder cattle imports. New World Screwworm concerns have the U.S. in a risk off posture. This will cutoff access to feeder cattle for backgrounders and feedlots and should bolster demand for those cattle classes in the U.S. market. Mexican imports had grown to 2/3 of the previous levels before the first shutdown, so the market had not completely recovered before closing again. Cattle markets are enjoying the news this morning with feeders trading back above $3.00/lb.
July KC Wheat +5.4 @ $5.23
July 26 KC Wheat -0.2 @ $5.90
July Corn +3.0 @ $4.53
Dec 25 Corn +2.6 @ $4.45
July Beans +11.0 @ $10.63
Nov 25 Beans +13.4 @ $10.44
May Feeders 3.225 @ $301.200
June Live +1.700 @ $216.375
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!
-Trent
