TFM Daily Market Summary 01-31-2025

CORN HIGHLIGHTS:

  • Corn futures finished the weak lower as talk of tariffs against Mexico, Canada, and China pressured the market. For the week, the March corn contract traded 4 ½ cents lower and posted a reversal on the weekly chart as momentum has faded from the corn market.
  • President Trump is planning to install a round of tariffs on Mexico, Canada, and China as of February 1. The tariff will be 25% against Mexican and Canadian goods and 10% for Chinese goods. The grain markets are worried about the possible extent of retaliation for the tariffed nations.
  • Argentina forecasts are looking to turn more friendly for crop production going into February. February will be a key month for pod and grain fill on this year’s corn and soybean crops.
  • A weak close this week and bearish price action could trigger further technical selling. Managed funds currently hold a near-record net long position in corn, and a loss of buying momentum may prompt additional long liquidation.
  • Despite technical pressures, overall corn demand remains robust. Weekly ethanol production and export demand are outpacing USDA projections. If this trend continues, the USDA may need to tighten ending stock estimates in future reports, which could be supportive of prices.

SOYBEAN HIGHLIGHTS:

  • Soybeans ended the day lower after mixed trade throughout the session that was partially caused by some miscommunication over President Trump’s tariff plans. Argentinian weather has improved as well which pressured soybeans. Soybean oil ended the day higher.
  • Trade has known for weeks that the Trump administration had planned to implement tariffs on Mexico, Canada, and China on February 1, but earlier today, Reuters incorrectly reported that the tariffs would begin on March 1. This caused prices to rally until the White House refuted the claim stating that they would indeed go into effect tomorrow. The tariffs will include Canadian canola oil which was supportive to soybean oil.
  • The Buenos Aires Grain Exchange reported that Argentina will most likely get rain in February which would put an end to the drought and stop the soybean and corn crops from further deterioration. They expect Argentina to produce 49.6 mmt of soybeans. This news was bearish for soybean meal.
  • For the week, March soybeans lost 13-3/4 cents while November gained 2-1/4. March soybean meal lost $3.70 to $301.10, and March soybean oil gained 0.89 cents to 46.11 cents. The funds are estimated to be long around 50,000 contracts of soybeans.

WHEAT HIGHLIGHTS:

  • Wheat ended the day lower, driven partly by concerns over the tariffs set to take effect on Mexico and Canada tomorrow, February 1st, and the continued strength of the U.S. dollar.
  • Tightening global supplies, particularly in the Black Sea region, are expected to persist, providing underlying support to prices. Additionally, growing drought-like conditions in the U.S. Northern Plains, as indicated by the latest drought monitor, show dryness steadily reappearing in the region, further adding to concerns.
  • Ukraine’s combined grain and oilseed harvest is forecasted to rise to 80 MMT in 2025, up from 76 MMT in 2024, driven by higher wheat seedings, according to Reuters. While Ukraine remains a key grain and oilseed producer, production has been significantly impacted by Russia’s 2022 invasion.
  • India’s wheat crop remains a growing concern, and it’s now possible that the country will need to import wheat this year. However, due to the strength of the U.S. dollar, it’s unlikely they will turn to the U.S., as American wheat will be more expensive compared to other global producers. This, however, will still reduce the overall wheat supply on the market.

DAIRY HIGHLIGHTS:

  • President Trump announced he will move forward with imposing tariffs for Canada, Mexico, and China starting February 1, 2025.
  • Class III futures posted large losses on Friday as a result of the tariff news. The February contract traded limit down before backing off slightly going into the close.
  • The spot cheese market fell more than 5.50 cents to trade back at $1.84375/lb. The whey market continued its downward trend closing 2 cents lower to $0.64/lb.
  • Class IV futures were also pressured lower on the day led by the August contract which was down 30 cents at the close to $20.10.
  • Spot butter declined 1.75 cents today which makes for a nearly 10 cents loss over the week. Butter now sits at $2.4325/lb. Powder was unchanged at $1.3450/lb.

 

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Author

Amanda Brill

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