Wednesday, May 21, 2025

Closing Markets: Corn +6.50 old & +7 new.
Beans +9.75 old & +11.25 new. Wheat +3.25.
All Topflight locations will be closed Monday, May 26th in observance of Memorial Day

Market Recap:
Good afternoon. Grain and soy markets closed higher for a third consecutive session this week on Wednesday, though as we mentioned this morning, it seems leadership shifted from the grains to the soy complex. We've continued to have a hard time pinpointing a specific reason for the rally so far this week, but talked about again throughout the day today were the ongoing themes of short covering by the funds in the grain space and further perceived optimism surrounding President Trump's tax bill/45Z as it pertains to soybean oil/soybeans.

Front and center on the data slate for Wednesday was weekly ethanol production/stocks data released by the EIA this morning. The report, which had data for the week ending May 16th, showed a rebound in production in the week to 1.036 mil bbls/day, which was up 4.3% from last week and up 3.6% from the same week last year. On the stocks side, the report showed US ethanol stocks in the week at 24.844 mil bbls, which was down 2% from last week but up 2% from last year; the figure was also the lowest for any week since the week of January 3rd at the very beginning of this year. We estimate corn used in the production figure during the week at 102.36 mil bu, which brings cumulative usage in the marketing year to 3.903 bil bu; this compares to 3.795 bil bu last year and the USDA's full marketing year forecast of 5.500 bil bu. Also out in the weekly report from the EIA was petroleum stocks data for the week, which showed crude oil stocks in the week increasing 1.328 mil bbls to 443.158 mil, while gasoline stocks were up 816k bbls to 225.522 mil, and distillate stocks were up 579k bbls to 104.132 mil bbls. Implied gasoline demand in the week was estimated at 8.644 mil bbls/day, compared to 8.794 mil last week and 9.315 mil in the same week last year.

As it pertains to the tax bill, both House Speaker Mike Johnson and House Majority Leader Steve Scalise said that the bill would be put to a full House vote later on Wednesday, though we have no further details as of this writing. Hardline Republicans who have opposed the bill due to not enough spending cuts, specifically in Medicaid, said this morning that significant progress was made in the overnight debate session held last night, but that they still saw it as unlikely that a vote would pass today. The differing in rhetoric makes it unclear at this point exactly what outcome is expected should a vote occur today. And aside from tax legislation and spending cuts, the bill also includes verbiage on the 45Z clean fuel tax credit, which is why we have spent so much time discussing it lately. We see action in the bean oil market as almost entirely related to rumors and headlines on this front, with domestic feedstock demand likely to be greatly impacted based on what decision is made on this policy.

CN closed mid-week at 4.61, up 6 and 1/2 cents. CZ was up 7 cents at 4.55 and 1/2. SN finished at 10.62 and 3/4, up 9 and 3/4. SX closed at 10.52 and 1/4, up 11 and 1/4. WN was up 3 and 1/4 at 5.49 and 1/4. Products were higher, July soybean meal closed at 294.10, up $1.50/ton, and July soybean oil closed at 49.83, up 33 points. Inside day higher for meal. Livestock markets again closed mixed, June live cattle closed at 214.15, up 97 cents, August feeders closed at 296.42, down $1.07, and June hogs closed at 99.52, down 50 cents. Outside markets are trading lower to sharply lower, crude oil futures are down 50-70 cents/bbl, the Dow Jones index is down 900 points, and the US$ index is down 40-50 points; the S&P500 is down 100 points and the NASDAQ is down 300 points. Outside day lower for crude oil.

Spreads were mostly mixed; corn spreads finished the day 3 cents higher to a penny lower, while soybean spreads were down a penny and a half to up 3 and 1/2 cents. CN/CU closed at 18 and 1/4, down a penny, and SN/SQ closed at 3 and 3/4, up a penny.

Otherwise, with the US crop size having arguably the biggest impact of all the current variables on the 2025/26 supply/demand outlook, weather remains the other ongoing talking point. We find it a bit interesting at how quickly the weather patterns have gone from bullish to bearish and then back again. Dry weather that was conducive to planting quickly flipped from friendly to threatening, then shortly there after, wet weather saw a similar song and dance as it was conducive to boosts in soil moisture early on but then became an issue for areas that have struggled to get crops in all spring. As most are well aware at this point, longer term forecasts continue to offer signs of warm/dry weather emerging later in June, but to this point, the general lack of heat and boosts in soil moisture both in the north and the south have gotten what crop is in the ground off to a near-ideal start.

From a forecast standpoint, we again don't have a lot new to report this afternoon, as a slow-moving low pressure system is expected to continue spinning through the northeast the rest of this week and into the weekend, providing the area with an additional 1-2" of precip. Once this system exists, models see the chance at one more smaller system working through the mid-section of the country and possibly providing rains to parts of the mid-south, before a drier pattern is then expected beginning the first couple days of next week. Temperature forecasts keep above average warmth present in the west over the next 10 days, while the east is seen staying on the cool side. 15-day outlooks show warmth returning then into early June for the northeast, but the southeast is still seeing just average temps as the bulk of the heat stays north.

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