MARKET UPDATE

You can scroll to read the usual update as well. As the written version is the exact same as the video.

Timestamps for video:
Tariff News: 0:00min
Forecasts & Drought: 2:00min
Corn: 5:40min
Soybeans: 9:10min
Wheat: 12:25min

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Overview

Grains mixed as corn sees some pressure from fast planting progress while soybeans bounce off technical support and optimism surrounding trade deals.

As for the trade deal talk we had a few pieces of info out today.

1) The US said we have agreed to a deal with India that will take place this fall. This is friendly as we have not had a deal with them in years. India does not export nor import any grain, but the rumor with this is that they could potentially start importing ethanol.

2) The US said it is close to finalizing a deal with Japan.

3) Yesterday Mexico said they had not come to a final agreement with Trump yet.

4) Scott Bessent said that the situation with China is unsustainable and will need to be de-escalated. The White House came out and said that the US is doing "very well" in discussions of a trade deal with China.

5) Lastly, and the most important headline that was released after the markets closed was that Trump said tariffs on China will come down significantly but won’t be zero.

I'd have to imagine the soybean market will probably enjoy this headline.

Nobody really knows when we will cut a deal with China. All we do know is that a trade war isn’t this ultra bearish factor today. It only becomes extremely bearish if a deal isn’t made by harvest when we typically start selling beans to China.

As I've mentioned before, we sell virtually zero beans to China this time of year anyways. So a non-factor short term.

Planting Progress

Corn planting is above average despite the rains out east.

12% vs the 10% average.

Here is a state by state visual from Darrin Fessler of Lake Front Futures.

Iowa well ahead of pace (18% vs 7% avg)

Where as areas out east are slightly behind.

Soybean planting also ahead of pace.

8% vs 5% average.

Chart from Lake Front Futures.

Forecasts

First looking at the short term forecasts, the next week is suppose to be wet for a good portion of the corn belt.

With the central US and the plains scheduled to receive good rains.

This has added some pressure to the wheat market, as Kanasas has especially lacked rain.

These rains will likely slow corn planting pace slightly and back down to around normal pace for the next week or two, but not enough to cause a "planting delay rally".

However, the wet areas should start to dry out soon as we head into May.

The rain the next week is seen as a beneficial factor to the crops. Not some delayed planting story, as that doesn’t look like it's in the cards.

Here is the the forecast vs normal for the 2nd week (April 29 - May 5)

This should bring some faster planting pace as we get into May, which could result in some pressure on prices short term.

Looking out even further, it appears that the Government as well as private analysts, are all expecting a drier than normal summer for the western corn belt.

So the "potential drought scare" is still a very real possibility this growing season.

First here is the seasonal outlooks from the Goverment.

May - June- July

June - July - August

Here is the seasonal outlook from Eric Snodgrass.

July - August - September

Here is the seasonal outlook from BAM Weather.

Long-term forecasts are hard to predict and not always accurate.

But if every single forecast from the government as well as private ones are seeing the same thing.. it has to make you wonder.

Drought Scare Possible After Wet Spring?

Every year where there is an ounce of dryness in the forecasts, we are of course going to inevitably get 2012 comparisons.

A 2012 type of event is unlikely.

However, just because we are having this wet spring does not mean we still cannot get that summer time "drought scare".

If you remember.. 2012 actually had a wet spring before the shower turned off and it became an issue in June.

Here is the 2012 vs 2025 precip ranks from March 1st to now.

The 2 years are pretty much flipped, but both had wet a March & April.

In 2012 it was wet to the west and dry to the east.

in 2025 is has been wet to east and dry to the west.

2025

2012

Here is the drought monitor comparisons from today vs the same exact date in 2012.

I am NOT saying we are going to see anything remotely close to a 2012 repeat.

I am simply pointing out the fact that just because we had a wet spring, does not mean we cannot still get a drought scare.

The long term forecasts also suggest some concerns as well.

Today's Main Takeaways

Corn

Fundamentals:

The funds went from record short, to near record long, back to near even, now long +125k contracts after buying +70k contracts last week.

It still makes zero fundamental sense for them to get short corn ahead of growing season.

The funds are well aware of how tight the world situation becomes if the US has any issue at all in production.

Again, excluding China the world is the tightest on corn it has ever been.

Yes we are planting a ton of acres and could very easily have a massive crop. But that does not mean we cannot see an opportunity.

For a pricing opportunity, we can still raise a record crop. We just need a small window of perception where the trade thinks the crop might not be as large as advertised.

Hence why we usually post our yearly highs from May to July, record crop or not.

Technicals:

Here is an interesting fresh perspective I wanted to show you.

This is the corn chart flipped upside down.

It looks pretty bearish flipped (meaning it actually looks bullish).

Still have a clear downward trend in place.

It would make sense for us to come back down and tap that major support level for the 3rd time (actually the $5.20 highs).

We topped out exactly after reclaiming 61.8% of the February highs, right where we had been saying we likely would struggle.

We are now sitting right at key support from last spring.

Short term, this is a must hold level. (green box).

If we fail to hold, we probably drop all the way down to $4.68 to $4.74 (red box).

This is the golden zone retracement from this recent rally. It also happens to be the lows from February 2024.

Looking to the upside I still have $5.23 to $5.26 as my next target after hitting this recent target.

That is the golden fib extension of this rally (161.8% of the rally). It is also the highs from February.

Dec corn also rejecting off the short term target I have been talking about for months.

Why this was my short term target:

1) It gave us back 61.8% of the Feb 2025 highs. The most common retracment.

2) It was the lows from Feb 2024. Old support = new resistance.

For Dec corn, if the correction continues I am looking for a bounce in the red box.

To the upside, my longer term target is $4.84 to $4.89

$4.84 reclaims 78.6% of the May highs.

$4.89 is 161.8% of this recent rally.

Soybeans

Fundamentals:

The funds bought +77k contracts of soybeans last week. Which was the biggest outright change in longs since 2020.

Despite being in the middle of a trade war, the funds have now flipped from short to actually long the soybean market ahead of growing season.

Majority of the time, the funds simply follow the momentum and where they think they can make money. They must see a story in the bean market if they are no longer choosing to be short for the first time since early February.

This is only the 2nd time the funds have been long soybeans since 2023.

Fundamentally there is still a clear path for a decently tight situation especially in new crop.

Carryout is projected to be down -25% vs last year even if we raise a record yield. Just a slight hiccup in yield could drastically shift the balance sheet.

I showed this chart last week, but again here is a visual of how yield change affects new crop carryout. Not a ton of wiggle room.

(The chart does not account for changes in demand. Less supply will naturally lead to less demand).

Technicals:

Just like in corn, I wanted to give you a new perspective.

Here is the soybean chart inverted.

Looking at this chart, where would you think it makes sense for us to go from here?

In my opinion, a 3rd test of that support would make perfect sense.

Soybeans have rejected off the 200-day MA for 7 straight days now.

It makes sense that we would struggle to break above this as I have been mentioning the past week or two. As we have not broke above this in 2 years.

I am still simply waiting for 1 of 2 things to happen.

1) We break above the 200-day MA.

This would open the door significantly higher. As it is major resistance.

2) We break below the 100-day MA.

This has also been a key support & resistance point for beans. A break below would likely result in us dropping back down to that key support box for the hundredth time. This level is also the golden zone retracement from this recent rally (50-61.8%). Which makes me more confident this is the level we would fall to if the 100-day gives out.

A break above or below these moving averages will tell us where our next move is.

As for targets, still have my eyes set on $11.04 for target #1.

That gives us back 50% of the May highs. It is also 161.8% of this recent rally (known as golden fib extension).

Nov soybeans have the exact same set up as July.

Simply waiting to see if we break above the 200-day or below the 100-day.

That first target is $10.78 to $10.82

Wheat

Fundamentals:

The wheat market is seeing some pressure from rains in areas that have been extremely dry.

However, the outlook past the next 1-2 weeks still suggest drier than normal. So I do not think areas such as Kansas are even close to being out of the woods as it is going to make more than one rain to make a major impact.

Here is an interesting study done by Peak Trading Research.

If you were to get long KC wheat on April 20th and hold that position for 20 days, you would have had a winning trade the past 12 of 14 years.

Seasonally, this is the time of year where we usually start to see some opportunities in the wheat market.

Wheat is hovering near multi-year lows.

We have the tightest global situation in over a decade.

Can’t get overly bearish at these levels.

Even if it takes some time, I have no interest selling any wheat down here.

Technicals:

KC needs to hold this 8-month-long support.

Currently I'm not looking to make much if any sales until we hit the top of the range again for the 3rd time.