Headlines
- Corn futures hovering. Despite trading through the $5.00 barrier early in the week, March corn futures struggled to hold. The next line of upward resistance is the May 2024 high of $5.08 per bushel, but overbought technical indicators could point toward the market taking a short breather.
- More corn headed overseas. Corn exports are currently on pace to exceed USDA estimates. This may result further cuts to ending stocks in the March WASDE report, especially if the U.S. and China ink a deal to fulfill the remainder of the Phase 1 trade agreement.
- Watch Brazil. Mato Grosso growers got nearly half their safrinha crop planted in two weeks, with nearly 70% of planting reported complete. While still slightly behind average, producers are quickly closing the gap. Soybean harvest pace has also seen major improvement.
- Rainfall benefited crops in Argentina. Limited rainfall brought some relief to the drought-stricken region. Argentinian corn and soybean crop conditions improved for the first time in several weeks.
- USDA’s First Look at 2025. The USDA Ag Outlook Forum takes place this week, providing an early look at 2025 acreage expectations. Expect some market chatter, but it’s the March 31 Prospective Plantings report that carries more weight.
Futures Commentary
Jenny Wackershauser
Broker/Agent
We continue to monitor the relationship between soy oil and soybean meal at US crush plants as we add more and more crush capacity in the US. National Oilseed Processor Association (NOPA) data from last week gave us an interesting look at January. Soybean crush margins remain around break-even values. Despite the lack of profitability, we had a record crush in January. Meanwhile, soy oil stocks are at their lowest January level since 2015, which shows processors are quickly finding homes for soy oil, much of this through exports.
Soybean meal, however, is having a rougher go of clearing inventory. We even heard from a processor this week that their limiting factor on crush volume is how much space they have available for soybean meal. This extra crush volume is depressing local basis values close to processors. As they get bogged down by extra soybean meal, they widen the basis and start to float some attractive new crop values worth considering. This is a huge positive for dairymen as we look ahead. Processors will either need to discount the product for domestic users or grow their export market, fighting Argentina for global market share.
As many feed buyers have managed these moves in soybean meal well over the last six to eight months, we don’t have a lot of unpriced product. However, this recent move back to the lows in the nearby months gives us another chance to clean up contracts and cash price through summer. New crop soybean has moved back near targets with values starting to be offered near four-year lows. Did you hedge 2025-26 SBM and canola last time we touched $300-$310 per ton? Can you pair that with a basis-only contract and free up your exposure for fall 2025 and early 2026 proteins? Or do you need more coverage with a call spread or risk reversal? Give us a call to talk through moves you can make to protect yourself during the volatile market swings.
Cash Commentary
Brandon Weigel
Broker/Agent
Corn and SBM markets have diverged in recent weeks. Strong corn export demand, laid against the backdrop of an already tightening US balance sheet, has been undergirding strength in corn futures. Volatility is likely here to stay as the ever-evolving landscape of tariffs and trade policy settles into the marketplace.
Regarding export demand, we are currently on pace to exceed the USDA forecast. In the next WASDE, there may be room for the USDA to further increase demand and thus trim the old crop balance sheet.
Futures continue to chop around recent highs, but front-month March 2025 futures have been struggling to move over $5.00. Managed money is still carrying an aggressive long position, which is perhaps one of the factors keeping a lid on prices. A position of this size leaves the market vulnerable to downside if they opt to return as sellers. So far, they have not had much of a reason to liquidate, but their position is larger than they typically like ahead of planting season.
If South American weather issues work themselves out and large corn acreage does come to fruition in the US in the March Prospective Plantings report, prices will likely soften. With that said, sustained issues with corn planting in Brazil over the coming weeks likely keep nearby prices well supported.
If you have not already begun to look at December 2025 new crop price protection on corn, it is worth consideration. We’re watching for pullbacks to begin offsetting topside price risk in new crop corn. If we see weather issues this with domestic production, the balance sheet does not have much wiggle room before adding topside excitement.
Protein markets, on the other hand, have been working back toward contract lows. With May soybean meal futures sitting around $300 per ton, consider action on any old crop exposure through September 2025.
As far as new crop protein, December 2025 soybean meal futures are hanging in the $315-$320 per ton range. Take a hard look at establishing some ceilings in new crop futures as we try to be patient on pricing the physical crop for October 2025 and forward. Most vendors bake a lot of time and risk premium into their new crop basis offers for 2025-26 canola and soybean meal cash offers, so consider managing futures prices as we watch for more advantageous basis values to arrive. Depending on your specific geography, we have heard of some areas with very average new crop protein basis already. If you are wondering which specific protection strategies may best fit the needs of your operation, please reach out to your team of feed market advisors.
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