TFM Midday Update 02-07-2025

CORN

Corn prices traded lower at midday, following reports of much-needed rainfall in the dry regions of Argentina, and as traders prepare for upcoming trade negotiations with China.
Markets reacted lower this morning after President Trump’s trade chief nominee, Greer, stated that he would review the previous Phase 1 agreement with China and is prepared to enforce it. The agreement includes significant purchases of U.S. corn, though it remains uncertain whether China will agree to such terms amid its ongoing economic challenges.
Despite having some rainfall, dry weather is expected across central Argentina over the next 15 days, and concerns continue over corn development.
Mexico in 2024 bought an all-time record high 25.3 million tons of US corn, up 36% year over year.

Soybeans continue to trade lower at midday, weighed down by ongoing trade tensions between the U.S. and China, as well as weather concerns in South America. While soybean meal follows the downward trend with soybeans, soybean oil sees some gains.
President Trump’s USTR nominee, Greer, announced plans to review trade agreements with China, Canada, and Mexico. In his remarks, he emphasized that the goal is to prevent significant disruptions in soybean prices, such as those experienced during the previous Trump administration.
A huge soybean crop in Brazil is still being forecasted, despite the troubles with harvest. They are predicting the crop to total 170 mmt in 2025, up almost 10% compared to 2024.
Crop conditions overall in Argentina declined 3% last week to 17% good/excellent, down from 31% last year, although parts of the region received some relief with rain.

Wheat remains lower at midday, following a strong market close yesterday driven by growing dryness in the U.S. Plains, along with cold temperatures moving into the northern Plains and the Black Sea region.
Expanding dryness in the U.S. Plains, combined with another cold snap moving into the Northern Plains and the Black Sea region, continues to heighten winterkill concerns for the winter wheat crop, as there is little to no ground cover.
Wheat shipments from the Black Sea are expected to slow significantly in the coming months due to a restrictive export quota imposed by Russia.
Wheat markets are responding to the potential trade agreement with China, as China fell short of the Phase 1 purchase targets in the previous deal. Traders are awaiting further developments, with President Trump waiting for China to initiate the first move to kickstart negotiations.

Lauren VandenLangenberg