GENERAL COMMENTS:
May corn closed up 4 1/4 cents and July corn was up 4 cents. May soybeans closed up 12 3/4 cents and July soybeans were up 11 1/4 cents. May KC wheat closed up 8 1/2 cents, May Chicago wheat was up 11 1/2 cents, May Minneapolis wheat was up 8 cents.
The U.S. Dollar Index is down 1.39 at 104.35. The Dow Jones Industrial Average is up 497.0 points at 43,091.0. April gold is up $6.20 at $2,926.80, May silver is up $0.81 at $33.20 and May copper is up $0.2525. April crude oil is down $2.12 at $66.14, April ultra-low sulfur diesel is down $0.0516, April RBOB gasoline is down $0.0642 and April natural gas is up $0.107.
CORN:
May corn futures traded 4 1/4 cents higher, closing at $4.55 3/4, while new-crop December futures closed at $4.46 3/4, unchanged. It was overall a two-sided session for corn futures as traders kept a lid on upward momentum until they see concrete evidence of a trade compromise in North America. However, traders were equally unwilling to allow prices to slip back below trendline support just above $4.50, as midmorning selling was met with strong buying interest below that level. $4.60 to $4.63 is the immediate bullish target, which was where the bounce stalled Wednesday. But all things considered, just posting a positive session to snap the streak of eight losing sessions is certainly a step in the right direction.
The Energy Information Administration updated the market on ethanol production for the final week of February at a very solid 1.093 million barrels per day (bpd), a week-over-week increase of 12,000 bpd. This keeps ethanol production through the corn marketing year thus far at a 4.2% increase year-over-year. Rough math would imply corn usage for February near 430 million bushels (mb), a 6% drop from the USDA January usage estimate of 457 mb, which isn't totally unreasonable considering fewer days in the month. The January USDA estimate released Monday of this week was well below what I was personally forecasting. It is worth noting as well that USDA raised their December corn usage estimate by roughly 6 mb in Monday's report. All-in-all, the ethanol industry is maintaining a strong showing thus far through the 2024-25 marketing year.
The DTN National Corn Index finished Tuesday at $4.13, a steady basis Wednesday would indicate the index to be near to $4.17.
SOYBEANS:
May soybeans closed up 12 3/4 cents, to $10.11 3/4 while new-crop November soybeans closed up 6 cents, at $10.09 1/2. May soybeans posted a strong double-digit move higher Wednesday to put a halt to their five-day skid. $9.90 to $10.00 reaffirmed itself as a solid support level for soybean prices currently. The upside medium-term target for a reversal would be the 100-day moving average for May futures near $10.29 1/2.
While tariff headlines have dominated the market over the past week -- and rightfully so -- the weather in southern Brazil is developing into a story with some bullish potential which is perhaps being overshadowed at present by the ongoing broader economic concerns. The past week has been hot with spotty rainfall with the next 1- to 2-week forecasts calling for a continuation of these conditions of spotty rainfall especially in the very far south. Brazilian extension agency EMATER, located in southernmost state Rio Grande Do Sul (which accounts for 16% of Brazilian soy production), estimated the percent of soybeans filling pods as of last Thursday at 56% and while there has been relief over the last week, the immediate forecast is calling for mostly dry conditions with better chances in the 7- to 15-day window.
In Monday's Fats and Oils report, the USDA confirmed total January soybeans crushed in the U.S. at 212.65 mb, in line with expectations given the strong NOPA indication. Overall, the crush industry continues to demonstrate record pace, now running 7% above 2023-24 through January. This would imply a total year crush of 2.445 billion bushels (bb) versus the current USDA estimate of 2.410 bb, assuming steady pace throughout the remainder of the marketing year.
The DTN National Soybean Index finished Monday at $9.31. A steady basis Wednesday would indicate the index to be near $9.44
WHEAT:
Wheat markets got a much needed boost midweek, finding strength on the waning U.S. dollar to move higher with May Kansas City futures closing at $5.57, up 8 1/2 cents. May futures are also now 15 1/2 cents above the new contract low set on Tuesday as buyers have shown interest near these long-term support levels around $5.50. Currently the HRW market did hit some resistance at $5.60 so that stands as a bullish objective, but beyond that the convergence of the 50- and 100-day moving averages near $5.82 is a reasonable medium-term target should trade concerns ease over the foreseeable future.
Wednesday's winter wheat condition updates were mixed for the most part, with the cold air through the middle part of February likely causing some damage especially in the Northern Plains where good-to-excellent conditions dropped in Montana, South Dakota, and Nebraska. Nebraska and South Dakota are in particularly rough shape with only 23% and 16% of their respective crops rated good to excellent. On the other hand, eastern Colorado and Kansas conditions showed improvement through February, with Kansas' crop now rated 54% good to excellent versus 50% in the early February release. Meanwhile in the east, soft red growing areas remain in good condition for the most part, although February did see declines across Illinois and Indiana. Overall, of the nine states I tracked that release percentile information, the average drop in good-to-excellent ratings from this time in 2024 was 8 percentage points, mainly driven by sharply lower conditions in the north-central plains.