Wkly Futures Market Summary For 3.3.2025

SOYBEANS

It’s “Tariff Week”, and China’s Global Times news service released a story overnight that China is considering retaliatory tariffs against US Ag and food products. In the past, China has waited until the US tariffs are in place before announcing any retaliatory measures. US futures prices could come under significant pressure if China does follow through with a tariff on US bean imports. On the other hand, if a last-minute deal or postponement occurs, traders will likely react bullishly.

SOYBEAN MEAL

US soymeal prices drifted lower last week and fell to a 10-week low as March futures first notice day liquidation added to fundamental pressure ahead of this week’s scheduled tariff implementation on Canada, Mexico, and an additional 10% on China. China’s state-owned Global Times news agency published an article saying China is readying retaliatory tariffs on US Ag goods. The news has resulted in heavy selling across the soy complex. Time is running out for a last-minute deal to avoid the tariffs. In 2024, the US exported approximately 1.9 million short tons of meal to Mexico and 1.4 million to Canada while importing $10.8 million worth of Canadian canola meal.

CORN

The Global Times article overnight suggests that China will retaliate against US Ag imports, which adds more fuel to the recent bearish pressure on corn. In addition, a 25% tariff is due to be implemented March 4th on Mexico, our largest corn buyer. Funds have been exiting on this two-week pullback, but as of last Tuesday, they were still holding a major long position of over 337,000 contracts. However, that total has likely been reduced somewhat after the sharp losses on Thursday and Friday of last week, which were not included in the report. Either way, there is a significant risk of further fund liquidation.

WHEAT

Chicago wheat prices closed lower each day last week and may extend that streak again today. Tariffs are expected to go into place tomorrow and the market lacks a bullish catalyst. Additional pressure is coming from a wetter forecast for parts of the Plains, adding some precipitation for Nebraska, eastern Kansas, and eastern Oklahoma over the next 5 days. The 6-to-10-day forecasts return to below-normal precipitation and above-normal temperatures with no cold snaps expected through late month.

CATTLE

Fund selling hit the live cattle and feeder cattle markets hard on Friday. April live cattle closed at its lowest level since December 27. Talk of consumers beginning to feel the pinch on high beef prices is a bearish factor. Friday’s poor close keeps the edge with the bear camp. Cash cattle was mostly $2-$3 lower last week at $197 in the south and $198 dressed in the north. The 5-area, 5-day weighted average ended last week at 197.46, down from 199.53 at the end of the prior week. CFTC data showed Managed Money traders cut their bullish positions to a 3-month low but were still holding over 121,000 contracts long as of Tuesday of last week. Feeder cattle fund longs fell to a 7-week low.

HOGS

April hogs have closed lower seven of the last eight sessions, and prices tested and closed on support Friday. Open interest dropped nearly 2,400 contracts as funds continued to pare down. CFTC data showed Managed Money traders sold nearly 24,000 contracts as of Tuesday of last week to lower their net long positions to just over 90,000, and that total does not include the significant weakness seen Thursday and Friday. Tariffs are set for implementation tomorrow on Canada and Mexico, and if there is no last-minute deal, hog prices may continue the selloff over the next couple of days.

MILK CLASS III

April Class III milk finished with a sizable weekly loss after falling to a 6 1/2-month low on Wednesday. The USDA said that US farm-level milk production is increasing in the East and West regions, while milk availability is tight in some areas of the Central region.

ENERGIES

April Crude Oil is a little higher this morning after closing lower on Friday, as the market awaits tariffs on imports into the US from Canada and Mexico. Midwestern refiners are very dependent on Canadian crude, and the tariffs would raise the cost of refined products such as gasoline and diesel. However, the market also fears the tariffs would damage the global economy and oil demand. US Commerce Secretary Howard Lutnick appeared to pent the door for some movement on the tariff levels, saying yesterday that the levies on Canada and Mexico will take effect on Tuesday but that President Donald Trump will determine whether to stick with the planned 25%.

April Natural Gas gapped lower overnight an fell to its lowest level in two weeks, but it has since reversed and is higher on the day. The market gave back a significant portion of its recent gains last week as warmer weather settled over the US and took away some of the urgency from the recent sharp declines in US storage.

DOLLAR INDEX

The U.S. dollar index weakened after U.S. Commerce Secretary Howard Lutnick indicated on Sunday that tariffs on Mexico and Canada are still “fluid,” suggesting they could be lower than the proposed 25%. However, Lutnick confirmed that the additional 10% tariff on China is “set.”

COCOA

May Cocoa is lower this morning after an anemic recovery off three-month lows last week. The International Cocoa Organization (ICCO) released its first official assessment of the 2024/25 global cocoa supply/demand balance on Friday, and it projected a net surplus of 142,000 metric tons, which would follow deficits of 441,000 tons in 2023/24, 65,000 in 2022/23 and 216,000 in 2021/22. World 2024/25 production was forecast at 4.840 million tons, up from 4.489 million for 2023/24.

COFFEE

May Coffee was higher overnight and reached its highest level in a week. Reports that Brazilian coffee farmers are basically sold out are providing support this morning. The sales superintendent for Cooxupe told Reuters that farmers have already sold 90% of the 2024 crop and that stocks are the lowest on record for this point in the year. The sales manager of Cocapec more or less reiterated that statement and said they will not have much to sell until harvest.

COTTON

May Cotton was higher overnight after trading to a new contract low on Friday. The cotton market appeared to be pulled down by the grains, especially corn, on Friday, but it has not followed those markets lower today

SUGAR

May Sugar extended last week’s selloff overnight and fell to its lowest level since February 12. The market has now given back 50% of the gains it made off the January lows. Expectations for heavy deliveries against the March contract have pressured the market since the middle of last week.

PRECIOUS METALS

April gold futures are higher on Monday as concerns over U.S. President Donald Trump’s tariff policies sparked a move into safe-haven assets. President Trump’s proposed tariffs on Mexican and Canadian goods, scheduled to take effect on March 4, along with an additional 10% duty on Chinese imports, raised fears of retaliatory measures and escalating trade tensions.

April silver futures are substantially higher, fueled by a weaker U.S. dollar and safe-haven buying in light of concerns about shifting U.S. trade policies.

May copper futures are higher and are coming up against a major downtrend line as traders assess the possibility of President Donald Trump following through on his tariff threats against the metal.

EQUITIES

Stock index futures are higher. The 8:45 central time February PMI manufacturing report is expected to be 51.6.

INTEREST RATES

Futures are lower across the board today after substantial gains were registered over the past two weeks. Financial futures markets are predicting the Federal Open Market Committee will keep its fed funds rate unchanged at its March and May policy meetings.

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