Friday, February 21, 2025
Closing Markets: Corn -6.75 old & -4.50 new.
Beans -6 old & -1.50 new. Wheat +4.50.

PLEASE JOIN US FOR OUR 2025 FOCUS MEETINGS!!
Wednesday, February 26th at the Oasis Senior Center in Lincoln with breakfast at 8:00am and meeting to follow.
Wednesday, February 26th at the Bement Lion’s Club in Bement with lunch at 12:00pm and meeting to follow.

Market Recap:

Good afternoon. Happy Friday. Risk-off was the theme of the day to end the week, as traders head into another 48+ hour period with no markets and limited way of knowing what incendiary comments might be made on several fronts between now and Sunday evening. For next week, we expect early week trade to be choppy, with attention in the ag space on the end-of-week Ag Outlook Forum, which will offer a first look at the upcoming 2025/26 marketing year.

CH closed Friday at 4.91 1/4, down 6 and 3/4. CK was down 7 and 3/4 at 5.05. SH finished at 10.39 1/2, down 6 cents. SK closed at 10.57 1/4, down 5 and 3/4. New highs for the week in both before closing lower. WH was up 4 and 1/2 cents at 5.90. Inside day for wheat. Products were lower, March soybean meal closed at 294.80, down $1.20/ton, and March soybean oil closed at 46.81, down 45 points. Inside days also for both meal and oil. Cattle markets finished the week higher, April live cattle closed at 193.95, up 15 cents, and March feeders closed at 267.95, up $1.12. Once again, inside days for both markets here as well. April hogs were lower for a fourth consecutive session this week, and closed at 87.67, down 85 cents. Outside markets are ending the week mostly lower, crude oil futures are down $2.10-2.20/bbl, the Dow Jones index is down 775 points, and the US$ index is up 30 points. The S&P500 is down 100 points, and the NASDAQ is down 460 points. Gold futures were down just a couple dollars/oz and did not make new contract highs today.

Spreads were mostly lower to end the week, corn spreads were down 3 and 1/4 to up a penny, and soybean spreads were down a quarter of a cent to down 4 and a half cents. CH/CK closed at -13 3/4, up a penny, and SH/SK closed at -17 3/4, down a quarter cent. New contract low in SH/SK at -18 1/2.

For the week: March corn was down 5 cents; May corn was down 3 and 3/4 cents; March soybeans were up 3 cents; May soybeans were up 4 and 1/2 cents; March Chicago wheat was down 10 cents; March soybean meal was down $1.10; and March soybean oil was up 74 points.

It feels like markets did a lot more than that this week with the plethora of ongoing headlines and choppy/back-and-forth price action that was seen since Tuesday. We are going to start needing another page for all the ongoing macro/geopolitical headlines that are happening, which is giving ag traders fits. Nobody knows, for one, which of the several stories will be the most important for that day, or for two, what new headlines will have happened in the overnight hours while most people in the US are asleep. Unlike Biden, President Trump is seemingly on a round-the-clock work schedule. Despite this leading to frustration for both the bulls and the bears though, open interest in corn and soybeans have hung in well, while the funds, especially in corn, continue to sit on a hefty net-long position. On one hand, this is due to ongoing inflationary concerns causing fund managers to want to be owners of 'things', similar to what was seen coming out of Covid, while on the other hand, we continue to feel there is enough concern over production out of not only Argentina, but also Brazil due to reduced acreage, that a majority of these traders will be holding these positions at least through spring in the US when more is known on their final crop sizes.

As to the fund positions themselves, most recent data released this afternoon from the CFTC showed that as of Tuesday, February 18th, managed money trader were net-long 353,533 combined contracts of corn futures/options (+21,144 on the week), net-long 16,526 combined contracts of soybean futures/options (-11,950 on the week), and net-short 61,577 combined contracts of Chicago wheat futures/options (+21,232 on the week). Of note, this was the largest week of net buying by the funds in Chicago wheat futures since the week of April 30th last year. In soy products, funds were sellers of 9,762 contracts of soybean meal in the week, and were buyers of 6,912 contracts of soybean oil. This makes them now net-short 56,993 contracts of meal, and net-long 53,472 contracts of oil.

For soybeans, the fund buying here has been less a result of inflationary fears in our opinion, but more a result of speculative optimism regarding trade rhetoric with the Chinese. Though no official meeting has taken place, Trump continues to tout the "great" relationship he has with Chinese President Xi Jinping, which has led some to believe a new trade deal might be imminent. While possible to some, we continue to express skepticism over this scenario as China has done nothing but attempt to diversify away from the US on everything from soybeans to cars to leather in the years since Trump's first trade war. However, we would note that in retaliation for the 10% increase in tariffs on February 1, the Chinese did not include many US ag products, which would seemingly leave the door open for such products to be included in a new deal should one be made. We also see rumblings of a renewal of the Phase One trade deal as highly unlikely; the Chinese needed the ag goods they signed up for in Phase One at the time and still didn't buy them; the odds that they would agree to take these purchases in a post-Covid world, where they are allegedly flush with grain and not flush with cash, would appear to be extremely low.

DOGE, or the Department of Government Efficiency, is the other large, relatively unknown, piece of the current market puzzle. It’s hard to know what overnight headlines will occur on a day-to-day basis, it’s also hard to know what federal agency Elon Musk and his team dive into next. One day it’s the treasury, the next it’s the USDA, today it’s the healthcare industry and Medicare. Pertaining to the USDA, there are questions in the farm community as to whether this may affect insurance signups this spring and following the budget cuts to some data reports last year, there are also questions as to whether the regular market data traders are used to will be available all year.

Weather forecasts in Argentina show an increasingly wet pattern for the southern part of the country beginning early next week, with increasing moisture for areas in the north still seen by the end of next week. Crops in the northern areas look to endure more stress though before moisture relief arrives, as temperatures will be well above average through the weekend and into the first part of next week. In Brazil, the warmest weather will be seen to the south, while central and eastern areas will be above average, but not to the degree of the south. There continues to be little precip updates for Brazil, as monsoonal rains continue to sputter through the north and northwest areas, while the east remains mostly dry.

Again, not a lot to talk about on the US forecast going into the weekend, as things will be quiet through the Midwest into the first part of next week. Temperatures will continue rising over the next few days, while precip looks to be confined to the northwest and areas along the Gulf Coast. Beyond next week, models are still having a hard time getting in agreement on either temperature or precipitation, with the bunch again fluctuating to the warmer and drier side vs what was seen last night and this morning. How these forecasts develop over the next few days will likely be the key weather feature for the Midwest to start next week.

As we get into the last week of February, the market is ever so slowly beginning to shift focus back to the northern hemisphere, with the start of meteorological spring in the US just seven days away. Stay aware of changing priorities in the coming weeks.



Enjoy the weekend!

Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com ... See MoreSee Less