good morning guys it's Wednesday April 2nd 5:25 a. m. Central Time grain markets are lower this morning I believe we've got some Liberation Day Jitters May corn Futures down 7 at 454 and 3/4 May soybeans down 6 and a quarter at 1028 May Chicago wheat down four and 3/4s at 536 last trade May Kansas City Wheat down three at 562 and a quarter May spring wheat down 5 cents at 589 we've got some biofuel news that is potentially friendly let's start there us oil and bio fuel groups are pushing for higher biomass diesel mandates the Coalition which includes the American petroleum Institute met with the EPA on Tuesday to propose raising the federal biomass diesel blending mandates to a range of 5.
5 to 5. 75 billion gallons much higher than than the current Mandate of 3. 35 billion the groups have agreed to keep the ethanol blending requirement at 15 billion gallons smaller refiners and fuel retailers OPP OPP the increase citing concerns over higher fuel costs and potential job losses meanwhile another group boycotted the meeting claiming that the blender's tax credit which expired back in December must be reinstated they argue that the tax credit kept fuel prices low for consumers while its replacement the 45z tax credit is incomplete and ineffective we've been told for years now Mackenzie that biofuel would save the soybean market and save soybean farmers in the United States um we need to be saved because Brazil is producing drastically more soybeans the growth in Chinese Imports is not what it's what it once was as a matter of fact I believe the USDA office in China is expecting contraction in soybean Imports in China during the uh new crop marketing year so we've got this need for more domestic demand and that's exactly what we'd like to see is this going to be for real or not I don't know the Market's optimistic about it and the market will tell you what's going on the soybean oil Market rallied has rallied sharply this week the rally really started on Friday continued into uh yesterday and even overnight and this is on the heels of of this biofuel Coalition headline and that helped to Rally soybeans yesterday this may soybean contract Peak just below that early March High which was 1036 and a half that's your big Line in the Sand that I'd like to see this thing close above today in order for it to look a little bit better from a technical standpoint um I threw in some extra numbers into this chart this morning so This Is Us soybean crush and exports and you can see the trend here the yellow bars is crush the green bars are exports crushes is increasing and increasing rapidly and in its EG Outlook form in February USDA told us that we would again crush crush a record amount of soybeans during the 25 26 marketing Year and that exports would again kind of be muted relative to what they had been from say like 2016 through 2020 or so um so I don't know we hope that some of this policy or or proposed policy becomes reality because I think that unless you have like a crop failure out of Brazil the export piece is going to continue to suffer and as of right now we're still depending on exports for 40 plus percent of our demand for soybeans grown in the United States so we need and we would like a more reliable domestic demand base certainly president Trump's reciprocal tariffs take effect today Trump will announce the specific tariffs on all us trading partners today at 3 p.
m. central Time the White House has yet to provide details about the size and scope of the tariffs Trump's recently proposed 25% tariff on automobile Imports will begin tomorrow White House Press Secretary Caroline levit stated that while Trump is open to negotiations his main focus is on correcting past trade injustices according to the American Farm Bureau Federation farmers are expected to be the hardest hit by the trade War as Mexico Canada and China were the top buyers of us agricultural products in 2024 the group estimates that retaliatory tariffs could Target nearly 27 billion dollar worth of us EG Goods of course farmers are going to be the hardest hit because we don't produce anything in this country anymore aside from corn soybeans wheat and beef and pork and things along those lines so we don't have a whole lot else to export we're a service economy uh largely speaking in any case um the countries that are involved have have been kind of quiet China actually made some sort of last ditch effort last night talking about how us farmers and tech companies are beneficiaries of the US China economic ties Mexico's been very quiet uh Canada has been qush they've talked a little bit but I think there's just a lot of uncertainty here and that's why you look around the markets this morning grains are off you look at the stock market I think that's also some Liberation Day Jitters so there's there's some concern and uncertainty here and I think um I mean I don't know but I think you'll see some headlin today they could be Market moving headlines good or bad the radar is active over the central us corn Bel this morning early morning rains fell across much of Iowa and Northern Illinois the radar was also active across portions of southern Minnesota Illinois Wisconsin Indiana and Ohio separate systems work through North Dakota and South Dakota large rainfall totals are slated to begin accumulating in the South Central corn Bel today and into the early part of next week this morning's GFS run suggests that portions of Southern Illinois Western Kentucky Western Tennessee Northern Arkansas and Southeast Missouri will see up will'll see up to 10 to 16 inches of rain in total over the next five days I keep looking at this GFS model and it you know changes several times per day and I keep thinking oh it's going to change and it's going to lighten up on the amounts and it has not still talking 16 inches of rain for part of that pocket of Central or I'm sorry Southern Illinois and then your um call it Southeast Missouri West Tennessee West Kentucky those sort of places the euro is maybe a little bit easier than the GFS with the with the totals but um this is a lot of rain that we're talking I think this is part of the reason you saw strength in the grain markets yesterday you will absolutely see flooding you'll absolutely see planting delays in these areas and yesterday April 1 was the first planting date uh for corn in a lot of these areas that are circled here on my screen um you could have problems with the winter wheat crop you've got srw wheat in that in those areas that could be negatively impacted by flooding I think that maybe that's part of the reason wheat rall yesterday so overall this is seen as being a friendly factor with regard to The Grandin markets I believe if you guys have not checked out our premium content you sure need to do so Joe can you tell our viewers about yesterday's premium video we did 43 minutes uncut with Pete Meyer yesterday we took mailbag questions from our premium subscribers regarding the acreage and stocks report and they were fantastic there was some like Market type stuff in there to uh people wanted to know Pete if you one of the questions was Pete if there's a crop scare this summer how high is Dorn going to go and Pete and I had drastically different opinions on that just uh so you know but um in any case Pete it's fantastic um he is like a total no BS like shoot it straight tell you exactly what he thinks type guy which is what we like on this show and in our premium content so um if you guys want to see the premium stuff go to standard grain. com you can sign up this morning it's a $50 per month subscription you can cancel it anytime no other fee no other obligation nobody will try to sell you anything else we send out two emails per day standard grain morning update goes out every business day at 5:00 a.
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email blast includes that day's premium video you can jump on the text message list if you want you don't have to give us your cell number we're not going to do anything with it other than uh send you text messages but uh give that deal a shot this morning guys us farmer sentiment declined last month amid increasing policy uncertainty Purdue University CME Group a economy barometer index decreased to 140 in March a 12-point decline from February the decline was driven by Falling crop prices since mid-February and concerns over agricultural trade and farm policy the survey also revealed that farmers expectations for US exports over the next 5 years hit a record low with nearly 30% of respondents anticipating a decline additionally 43% of farmers identified trade policy as the most significant factor affecting their Farms nearly twoth thirds of respondents believe a second round of mfp payments are likely or very likely to help offset lower prices caused by a trade War okay so I'm done uh paying attention to the actual sentiment number because it doesn't make any damn sense to me as we've discussed in the past um I will run through some of these other charts that uh you just discussed Mackenzie over the next five years do you think agricultural exports are more are more likely to increase decrease or remain about the same and it's kind of split um here 33% think will incre increase uh 30% think will decrease if the trade War leads to lower egg prices How likely do you think mfp is uh basically you've got 52% plus 13 my Ma I'm not good at math 65% think that it's likely or very likely that we'll see mfp and I think following that story that we did yesterday that number is probably higher now mfp is coming guys it's I think it's if I had to bet I'd say yeah you're going to see another version of it maybe it's not called mfp but unless you see a drastic change in soybean prices over the course of call it the next 10 months it's probably coming which of the following policies or programs will be most important to your farm the next five years trade policy trade policy trade policy said 45% which um in this current environment how could you say otherwise the forecast for Brazil's Brazil's soybean and corn crops has been cut according to Consulting Group Stone X this season soybean crop is estimated at 167. 5 million metric tons down marginally from the previous estimate of 168. 3 the reduction was attributed to poor weather conditions in the Brazilian state of Rio Grande doou Brazil's first and second corn crops were also revised lower the first corn crop is estimated at 25.
9 million metric tons down from 26. 5 and the second corn crop is projected at 101. 6 million metric tons down from 102.
