Written Commentary
Ag Market View for May 20.25
May 20, 2025
CORN
Prices were $.05-$.07 lower with new crop futures leading the declines. Nearby spreads firmed while new crop spreads weakened. July-25 violated support at LW’s low at $4.87 however held above its 50 day MA at $4.82. Warm/wet conditions will be the dominate weather feature across the US midsection into early May. Rains this week across key growing areas of Brazil will keep their 2nd corn crop prospects high. US corn plantings advanced 8% LW to 12% complete, at the high end of the range of guesses and well above my expectations. Progress is just above the YA pace of 11% and the 5-year Ave. of 10%. 2% of the crop has emerged. EU corn imports as of April 20th at 16.8 mmt are up 12.8% from YA. While exports remain strong there is a growing sentiment that lower domestic feed usage and usage for ethanol production will offset higher exports in future WASDE reports keeping US ending stocks above 1.45 bil. bu. Dr. Michael Cordonnier raised his Brazilian corn production est. 3 mmt to 125 mmt while also raising his Argentine forecast 2 mmt to 48 mmt. US corn acres have risen from the March intentions report to the June acreage report the last 4 years and 18 of the last 25. However, corn acres have exceeded 95 mil. in the March intentions only 3 times prior to this year. In 2 of those years final acres fell from the March intentions while increasing 1 year. Today’s trade action seems to be trying to prevent additional corn acres drawing away from soybeans.
SOYBEANS
Prices were mixed with beans ranging from $.01-$.05 higher with old crop the upside leader. Meal slipped late to close steady to $1 lower while oil was 20-30 lower. Bean spreads rallied while product spreads were mixed. Inside trade for July-25 beans as prices rebound from a test of the 50 and 100 day MA’s near $10.39. July-25 meal closed back below $300 per ton for the first time in 2 weeks. Choppy trade in July-25 bean oil as prices pulled back after stalling just below the April high near $.49 lb. Spot board crush margins broke $.10 ½ today to $1.30 ½ bu. with bean oil PV holding steady at 44.9%. Soybeans drew support from reports that of China was active buying of Brazilian beans. Comments from US Treasury Sec. Bessent that the trade war with China is unsustainable and that he expects the situation to de-escalate soon also provided a boost. An uptick in the generation of R4 RIN’s in March would suggest a rebound of biodiesel and RD in the month of March. The official production figures from the EIA for the month of Feb-25 are due out the middle of next week. Soybean plantings at 8% were also at the high end of expectations and above the YA pace of 7% and 5-year Ave. of 5%. EU soybean imports as of April 20th at 11.2 mmt are up 8.7% from YA. Soybean meal imports at 15.1 mmt are up 25.8%. Dr. Michael Cordonnier raised his Argentine production forecast 1 mmt to 49 mmt, in line with the USDA. He held his Brazilian est. unchanged at 169 mmt which matches the USDA forecast and slightly above the Conab est. of 167.9 mmt.
WHEAT
Prices range from $.02-$.06 lower across the 3 classes today. KC futures was the downside leader, unable to hold overnight strength while falling to a new low for the month. Next support for July-25 KC is at the Mch-25 low at $5.56 ½. Spreads were mixed. July-25 CGO fell to a fresh 2 week low. The heaviest concentration of rainfall over the next 7 days will be in the Southern plains and WCB where 1.5-3” totals are expected. While this will work to ease drought conditions in these areas, it will also slow spring plantings. Spring wheat plantings jump 10% to 17% complete above its 5-year Ave. of 12%. Winter wheat conditions slipped 2% to 45% G/E, compared to 50% YA while the percentage of the crop rated Poor/VP jumped 2% to 21%. The drop in ratings was more than expected led by an 11% plunge in IL and an 8% drop in SD. Kansas, by far the largest producing state, saw a 2% point drop in ratings.
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