US and the World

     It is that time of year again. Early April is often the time when corn planters get pulled out of the shop ready to go to the field. It is also a time of optimism spurned on by the warm touch of the sun on your back. Every year we plant with hopes of good things to come on our way to seeing the frost on the pumpkins come October. 2025 is no different than any other year in that vein however, our geopolitical world is completely different than it has been before and as farmers looking out on our fields this spring there is much greater risk on our horizon.  As we move ahead, we should at least start where the USDA says we must. On March 31st they released their always big March 31st Prospective Plantings report.

     The March 31st report is one of the big three of the year sandwiched between the final numbers from USDA in early January and actual planted numbers that we get at the end of June.   This year USDA came out with a projection of 95.3 million acres of corn and 83.5 million acres of soybeans. This was 5% more corn than we had last year and 4% less soybeans the 2024. In the scope of things if we look back over the last several weeks of projections from various pundits, we are in the ballpark. Everybody thought we would have more corn and less soybeans, the question always was how much more.  95.3 million acres of corn seems reasonable although earlier projections had been all the way up to 97 million acres.

      On the corn stocks side of the equation USDA pegged total corn domestic stocks at 8.15 billion bushels which is down 2% from last year. On the soybean side soybean stocks as of March 1st were 1.91 billion bushels which is 4% higher than last year. US wheat in all positions was at 1.24 billion bushels on March 1st which was up 14% from one year ago.

                      On April 4th soybeans and wheat futures were lower than the last Market Trends report.   Corn futures were slightly higher.  May 2025 corn futures were at $4.60 a bushel.  Dec 2025 corn were at $4.46 bu.  The May 2025 soybean futures stood at $10.16/bu.  The November 2025 soybean futures was at $9.77 bu. The May 2025 wheat futures closed at $5.29 a bushel. The Minneapolis May 2025 wheat futures closed at $5.84 a bushel with the September 2025 contract closing at $6.12 a bushel.

     The nearby oil futures as of April 4th closed at $61.99/barrel down vs the nearby futures recorded in the last Market Trends report of $67.18/barrel. The average price for US ethanol in the US was $2.03/barrel, up versus the $2.00 a US gallon recorded in the last Market Trends Report.

     The Canadian dollar noon rate on April 4th, 2025, was .7034 US, up vs the .6950 US reported here in the last Market Trends report. The Bank of Canada‘s lending rate was maintained at 2.75%.

Ontario

    In Ontario the long winter is finally coming to an end. There has certainly been challenges in the snowbelt regions of Ontario the past few months. There have also been incredible problems with ice storms in late March and early April. Generally speaking, the 1.1 million acres of winter wheat looks unscathed. However, there are always a few problems such as damage from snow mold and heavy ponded water showing up in early April.  Farmers await warmer weather.

    Looking ahead, we need to estimate how many acres will be going into corn and soybeans come this spring. 2.3 million acres seems to be one of the estimates for grain corn to be planted in the coming weeks. However, that always will be subject to change depending on the right type of weather for planting. Soybeans are set to come in less than 3 million acres this year down about 7.8% according to Statistics Canada.  At the end of the day, the crop mix never varies much in Ontario because of our finite acres. However, an uneven spring will always mean more soybeans and less corn. Basis fluctuations will play off that.

     Ontario basis levels for corn have been maintained from a month ago and even slightly increased. This reflects the Canadian dollar as well as the status quo in corn futures compared to a few weeks ago.  On the new crop side, the corn basis has changed very little. Needless to say, part of the basis sustenance in corn has to do with several ships being loaded for Europe in the next few weeks and months.  EU tariffs on American corn and soybeans enhances our export opportunities. The soybean basis has decreased slightly for both old and new crop based largely on a decline in futures and a slight rise in the Canadian dollar.

    Old crop corn basis levels are $1.05 to $1.61 over the May 2025 corn futures on April 4th across the province. New crop corn basis levels were $1.05 to $1.35 over Dec 2025 futures.   The old crop basis levels for soybeans range from $2.43 to $3.20 over the May 2025 futures. New crop soybeans range from $2.63 to $3.12 over the November 2025 futures.   Ontario SRW wheat prices are in the $6.28 bu. range.  For July 2025 new crop the bid is in the $6.55 bu. range.     On April 4th the US replacement price for corn was $6.58/bushel.  You can access all these Ontario grain prices in the marketing section at http://gfo.ca/marketing/daily-commodity-report/

The Bottom Line

     Where do we go from here?  Sometimes it is hard to imagine the way it used to be with the world trading in an ordered fashion. However, with the election of the Trump presidency that has all changed and the imposition of global tariffs has thrown several monkey wrenches into the machinery of moving goods globally. On top of that the trading relationship between the United States and Canada has been changed forever. The movement of grain will also be altered radically.

      The temptation is always to yell fire in a crowded theatre. However, the theatre has already burned down and to some extent Rome is burning. Theorizing on changes that may take place in the coming days weeks and months is very difficult to do as it depends on the musings of the American President. However, despite it all there will be growing marketing opportunities.  With the world trading system broken, it’s just hard to tell where they will come from.

     For instance, at the end of the day the world needs to eat, and grain will be moved, and food will be made. Even though the corn market has buckled under the tariff announcements it is largely resisted the temptation to go down further. Soybeans on the other hand are a different animal largely dependent on exports which are disappearing. It also doesn’t help that the Chinese put counter tariffs on American soybeans.  It is hard to blame them with the Americans putting tariffs on Chinese goods coming into the United States at 54%.  We have the biggest trade war in history and it’s starting out very brutal.

     The American response to their own farmers is to ramp up the American subsidy theme park yet again. At the present time there is $10 billion in direct payments to American farmers in the offing. More is probably to follow.  That points to an American administration which is digging in for the long haul, whatever that might be.

Commodity Specific Comments

Corn

     Corn seems to be above the fray with regard to tariff price action.  There have been all kinds of bad news thrown at the corn market with regard to acres and oversupply, but the price keeps going sideways.  On the global front the corn balance sheet is tighter than usual. Mexico the number one buyer of US corn seems intent on working with the Trump administration.

     The increased corn number from USDA has within it acres which are more fringe than prime Illinois corn country.  Keep this in mind as we go forward because we’ll probably start out with the USDA projected yield of 181 bushels per acre. This will be difficult to get on these many corn acres. We did not get there last year.

    The May 2025 corn contract is currently priced at 7 cents below the July 2025 contract a neutral indication of old crop corn demand. Seasonally, we know that corn prices tend to peak in early June and bottom out in early October. The May 2025 corn futures contract is at the 29th percentile of the past five-year price distribution range.

Soybeans

     The USDA did what it did with regard to a lower soybean acreage number and this should be positive for soybean prices. However, President Trump did what he did with regard to tariffs on China and we got the obligatory Chinese counter tariffs on US soybeans sending the market crashing down in the bean complex.  It would seem obvious, there’s even less enthusiasm for planting beans now.

     In many ways that holds the potential for a further deterioration in soybean acres and prices especially when it comes to potential weather problems. If we have a wet and cool spring that might change things and get soybean acres back. However, if that doesn’t happen soybean acreage and morale might get even lower.

       The May 2025 soybean contract is currently priced 16 cents below the July 2025 contract considered bearish for soybeans.  Seasonally, soybean prices tend to peak in early July and bottom out in early October. The May 2025 soybean contract is currently at the 16th percentile of the past five-year price distribution range.

Wheat

     The wheat market almost never seems to be making sense.  Gaps in supply are almost constantly filled by worldwide production, which continues. At the moment wheat has been affected by the tariff war with some countries such as S