The combination of more acres in corn and wheat, first notice day and the threat of tariffs starting on March 4th gave traders plenty of reason to exit their long positions last week. With a lack of buyers and motivated sellers March corn futures lost 38 cents during the week while May and July closed 35 and 34 cents lower respectively. The funds ended the week long 255,843 corn and are now short 3,286 soybean contracts.
Brazil’s first crop is 35% harvested which is near the five-year average. The second crop plantings have accelerated the last two weeks coming in at 67% complete which puts the progress equal to the 5-year average. Concerns about the crop being planted outside of the prime window have diminished with this recent pace. Brazil’s forecast continues to have most of the grain belt under a light accumulation over the next 10 days.
Trump put Mexico and Canada on notice regarding tariffs restarting March 4th and now has traders awaiting their response. President Trump, after discussing pushing the tariff pause off to April 2nd, stated that he will be starting the 25% tariffs against Canada and Mexico on the 4th of March. Trump stated the decision to do so was made because of a lack of action against drug trafficking by Mexico and Canada. Trump is also doubling China’s tariffs on March 4th to 20%. Trump’s Administration is also starting to apply special tariffs to companies it feels China is using as transship fronts to avoid tariffs. One company singled out is owned by China and ships aluminum out of South Korea. China has yet to respond to the declaration.
On Thursday the USDA Ag Outlook Forum released their balance sheet for corn, beans and wheat. The USDA used 94 million acres of corn, 84 million acres of beans and 47 million acres of wheat. Total acres of 225 million is only behind the 227.8 used back in 2023. Carryout in corn moves close to 2 billion and beans sit at 320 million. The USDA is using record yields of 181 for corn, 52.5 in beans and less than a record 50.1 wheat. Keep in mind that these numbers are not from a survey but are a starting point that traders will use in the markets. The March plantings survey is taking place now that will be released March 31st and will carry more weight than the outlook forum.
| USDA Final | USDA Final | USDA Final | Ag Outlook 2025 | |
| 2022/23 | 2023/24 | 2024/25 | 2025/26 | |
| Area Planted | 88.2 | 94.6 | 90.6 | 94.0 |
| Area Harvested | 78.7 | 86.5 | 82.9 | 86.1 |
| Yield | 173.4 | 177.3 | 179.3 | 181.0 |
| Production | 13,651 | 15,341 | 14,867 | 15,585 |
| Beginning Stocks | 1,377 | 1,360 | 1,763 | 1,540 |
| Imports | 39 | 28 | 25 | 25 |
| Supply | 15,066 | 16,729 | 16,655 | 17,150 |
| Feed & Residual | 5,486 | 5,805 | 5,775 | 5,900 |
| Ethanol | 5,176 | 5,478 | 5,500 | 5,500 |
| Total Food/seed/industrial | 6,558 | 6,868 | 6,890 | 6,885 |
| Total domestic use | 12,044 | 12,673 | 12,665 | 12,785 |
| Exports | 1,662 | 2,292 | 2,450 | 2,400 |
| Total Use | 13,706 | 14,966 | 15,115 | 15,185 |
| Ending Stocks | 1,360 | 1,763 | 1,540 | 1,965 |
| Stocks/Use % | 9.9 | 11.8 | 10.2 | 12.9 |
With first notice day behind us, it will be interesting to see if the funds return to the market this week or continue to take money out of the market. As I stated last week, this market has been demand driven since late last year and demand markets need to be fed, or they run out of steam. Favorable weather in South America has helped push the markets lower, but the US continues to be competitive in the world market. Farmer sales of corn have dried up the last couple weeks, which is resulting in stronger basis levels across the country. Look for basis to remain strong heading into spring planting as producers focus shifts to field work and less on marketing.
Upcoming reports
| Date | Report |
| 3/11/2025 | Crop Production |
| 3/31/2025 | Grain Stocks/Prospective Plantings |
