We kicked off the day with Durable Goods Orders MoM, Chicago Fed National Activity Index , Durable Goods Orders Ex Transportation MoM, Export Sales, Initial Jobless Claims, Durable Goods Orders ex Defense MoM, Continuing Jobless Claims, Jobless Claims 4-Week Average, and Non Defense Goods Orders Ex Air at 7:30 A.M., Existing Home Sales and Existing Home SalesMoM at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 7-Year Note Auction at 12:00 P.M., Cold Storage at 2:00 P.M., Fed Balance Sheet at 3:30 P.M., and Fed Kashkari Speech at 4:00 P.M.

The Biden Administration conducted a historic liquidation on the nation’s Strategic Petroleum Stocks, which began in March 2021 and ended badly in June 2023. At the low, the SPR had been drawn down by 291 Mil barrels or 46%. To limit future production, the purpose was to keep energy prices low while cancelling oil leases and discouraging exploration. Since then the SPR has increased 50.7 Mil barrels, but still 38% less than the start of the Biden term. Looseningregulations and more favorable petroleum stance had energy prices unchanged or lower in 2025, and declines accelerated with the reciprocal tariff announcement, and nearby crude oil fell below $60 for the first time in over 4 years in late March. Last week, the SPR grew by 468,000 barrels, the most since January, and stocks were the largest since October 2022. Any additional weakness in energy prices will likely be used for US restocking.

Photo by Waldemar on Unsplash

Central US Weather Pattern Update

Central US Warmth to Aid Planting, Emergence; Drought Coverage Shrinks Nearby:

The Central US forecast is drier in the E Midwest into early May, and now a full 10 days of open planting weather are offered to IL, IN, OH, and MI. Rain in late April instead favors The US Plains, IA, and MN, where its needed. Drought eases west of the Mississippi River. Widespread warmth further aid field prep & seeding. NOAA’s 6-10 day temp and rain probability shows an active pattern of showers is projected across the Plains/W Corn Belt into May 2^nd. Cumulative rainfall of 1”+ favors KS, E NE, IA, ND, Mn\\N, and WI. Patchy rain is possible in the E Midwest this weekend but major disruptions to planting are not anticipated. High temperatures in the upper 60’s, 70’s, and 80’s will become widespread beginning next Monday. Ag Resources (ARC) maintains that the national seeding progress stays aligned with longer-term averages into mid-May. Crop emergence will be sped by warmth. ARC does note that actual

Rain totals in the Plains Thursday-Friday should be closely monitored.

Global Weather Pattern Discussion

Drought in Place in China, Key Areas of Middle East:

Improved climate patterns are noted in the US & Brazil, but issues remain in key areas of China and Middle East. Root-zone soil moisture anomalies in the Middle East & Asia as of April 21^st, which aligns vegetation health, which in large parts of Syria, southern Turkey, Iraq, and China are well below last year. Only spotty showers are forecast in the Mid-East over the next 10-days, and there’s no sign of soil moisture improvement across the east Chinese Plains. For this is a wheat issue. Irreversible damage has been done to Mid-East wheat crops. Frequent rain is needed in China in May to salvage winter wheat potential there. Some 60% of China’s winter wheat belt has seen just 30-65% of normal rainfall since Feb 1^st .

2025 US Corn Yield Scenarios

ARC’s research suggests significant weather adversity is needed this summer to tighten the US corn balance sheet and lift Dec CBOT above $4.80. This is primarily do to the US producer seeding 95+ Mil acres. This is partially due to a rebound in Brazilian production, a temporary elimination of Argentine export taxes and a current cap in US ethanol production capacity of 18 Bil Gal. The message is that the path to building corn inventories has been made easier by larger US corn seedings and so far favorable US & South American weather. Since 2015, yields have been a ceiling and floor, and ARC views th most probable range of US corn yield in the coming year at 173-185 BPA. A yield below 175- whether perceived or published by the USDA – is needed to spark the addition of new fund length after June 1^st . Into mid-May dry weather helps advance spring seeding and crop establishment.

Corn Comments & Analysis

Brazilian Corn Markets Shed Weather Premium on Lack of Weather Threats:

Global corn futures ended weaker, while Argentine/Ukraine fob premiums firmed slightly. ARC’s work suggests that spreads and cash markets take over leadership in rationing old crop inventories. Recall exporter stocks/use in 24/25 will be historically tight. However, future supply estimates are rising amid timely US seeding, improving Midwest weather, as the Brazilian monsoon produces rain across the winter corn areas into May 10^th. End user will be less anxious to chase rallies/extend coverage until/unless there is a new crop supply issue. July corn futures in Brazil have fallen to $5.07/Bu, vs. $5.60 in mid-March. Seasonal relaxation of Brazil’s market has been slower amid expanded ethanol production, but ARC maintains Brazil’s exportable surplus in 2025 expands by 7-8 MMT’s. Brazilian fob corn for July is offered at $2.11/MT, some $5.00/MT below US Gulf offers. Be prepared to sell recoveries. Even potential Central US dryness won’t be a market factor until mid-June. N Hemisphere weather is favorable for new crop seeding. It’s key Dec CBOT stays above it’s 20 – and – 100-day moving averages at $4.53. Otherwise, a test of $4.40-$4.45 is in the offing.

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