Daily Market Cast: 3/25

Daily Commentary: Wednesday, March 25, 2026

Transcript

SPEAKER_00 0:00

Good afternoon everyone. Today is Wednesday, March 25th, and this is Sam with today's commentary. Markets remain in a reactive phase with direction shifting alongside headlines. Today, energy and biofuels set the tone. The EPA announced a nationwide waiver allowing expanded sales of E15 and E10 gasoline blends beginning May 1st, aimed at stabilizing fuel supply and lowering prices. The waiver will run for at least 20 days with the option to extend if needed. At the same time, the market is looking ahead to clarity from the EPA on RVOs and SREs, with expectations building for an announcement later this week. Put it together and the message is clear. Biofuels are front and center again. Crude oil traded like it has been, volatile and headline driven. Early weakness followed reports of a proposed peace plan with Iran, only to reverse after the plan was formally rejected. By the close, crude had recovered off the lows, but the bigger story is that the market is still holding elevated levels relative to where we were just a few months ago. Geopolitics added another layer late in the session, reports that President Trump will visit China May 14th through the 15th, with President Z expected to visit Washington at a later date. Sparked renewed buying interest, but particularly in soybeans as the market began to price in the potential for improved trade flow. That combination, supportive policy, elevated energy, and shifting trade expectations continues to provide underlying support for gray markets. Now on corn, the question continues to come up: where are corn prices going? And it's a fair one with a major report right in front of us. December corn has carved out a well-defined range since January, bouncing from the 445 low up to 498 and now sitting near 490. That tells you the market already has structure and more importantly, underlying strength. This rally started well before the war headlines, which suggests the story is bigger than geopolitics, though that added fuel and helped push us toward the key$5 level. Funds have shifted their posture, moving from short to long, and that's been a supportive tailwind. But from here, it likely takes a new catalyst to break and hold above$5. The upcoming USDA report leans slightly bearish with expectations for higher stocks in acres. But if acreage comes in below$94 million, that opens the door for another leg higher. Seasonally, history favors the bulls. December corn hasn't made its early yearly high in March in over 25 years. Near term, watch support at 480 and 466 with resistance just above$5. Volatility stays elevated, but the bigger trend still leans constructive. May corn futures closed 4.3 quarter cents higher at 467 and a quarter. December futures gained 4.25 cents, the finished at 493 and a quarter. Non-soybeans, soybeans are participating in the broader strength, but remain more mixed compared to corn as they balance outside market support with ongoing demand uncertainties. Like corn, beans are benefiting from the rotation into hard assets and the idea that commodities are undervalued in a stagflation type environment. However, they don't have quite the same immediate bullish catalysts. Energy markets still matter here, particularly through the lens of biofuels, and any sustained strength in that space could lend additional support. But similar to the rest of the complex, soybeans are trading more on macro flows and headlines than clean fundamentals at the moment. The bigger shift to watch is the transition from headline-driven trade to data-driven trade, as key reports from agencies like the IEA, EIA, and OPEC roll out in April, markets will start to recalibrate around actual supply and demand rather than speculation. That shift could ultimately determine whether soybeans can build a more sustained move higher or remain stuck in a choppy, reactive pattern. May soybean futures gain 16 and 3 quarter cents to settle at 1171 and three quarters. November soybeans close the day at 1150, higher by six and a quarter cents. The wheat complex is quietly firming alongside the broader grain complex, but it continues to take more of a backseat to outside market influence than outright bullish conviction. The push higher this morning comes despite weaker crude oil, which speaks to underlying support, but the trade still feels stuck in this headline-driven environment. Geopolitical uncertainty tied to US Iran developments is keeping some risk premium in place, yet the constant back and forth messaging on a ceasefire is limiting follow-through. At the same time, wheat isn't getting the same direct demand pull from biofuels or energy linkage as corn and soybeans, leaving it more sensitive to macro tone and weather. Until the market transitions out of this headline phase and into something more data-driven, weak like wheat likely remains choppy, caught between outside market volatility and its own fundamental story. May Chicago wheat futures gain 7 and 3 quarter cents to close at 597 and 3 quarters. May Kansas City futures end of the day at 6.17 and 3 quarter, up 13 and 3 quarter cents, and may Minneapolis finished higher by 9.5 cents, closing at 6.40 and 3 quarter. Now to the livestock complex, lean hogs continued to press lower, making new lows for the move on a daily basis, and today was no exception. June hogs opened with a gap lower, pushing below the 103 level early in the session. Within the first 10 minutes of trade, buyers stepped in and drove prices above yesterday's high, but the strength was short-lived. Sellers re-entered the market, and by the close, June hogs finished just slightly higher on the day, up seven and a half cents at 104.12.5. We were able to execute our strategy and get long June hogs below 103. We are currently holding that position with a protective stop at 185 cents. From a fundamental standpoint, the recent cold storage report offered some support showing pork stocks at 5% below year-ago levels. This tighter supply picture should help underpin the market on breaks. In the cattle market, packers appear to be losing control of the leverage they briefly gained by cutting kills and idling capacity. While reduced slaughter levels initially supported boxed beef prices, that strategy is beginning to unravel. Box beef values were sharply lower today, down nearly$8 in the morning report. While packer margins have briefly turned positive, the question now becomes what's next? Our expectation is that packers will attempt to push cash cattle prices lower this week. One of the unintended consequences of reduced slaughter is the building up of market ready cattle. Those cattle are remaining on feed longer, and carcass weights are now running 47 pounds above year-ago levels. This is a bearish overhang that the market will need to work through. The futures market reflected these concerns today. The cattle complex opened higher but encountered selling pressure mid-morning, ultimately finishing in negative territory across most contracts. April live cattle filled 95 cents to 234.42.5. June live cattle declined 75 cents to 233.85. Demand remains the key underlying support, but there are growing signs that consumers may be pushing back against higher beef prices. If that trend continues, it will limit packers' willingness to chase the cash market higher and could lead to a softer cash trade. The cold storage report showed beef inventories at 5% below last year. While that might typically be viewed as supportive, it is less impressive given the significantly reduced slaughter pace. In our view, freezer stocks should be tighter than they currently are, suggesting demand may be starting to soften. Feeder cattle were mixed on the day March feeders, which expired tomorrow, were the only contract to post a gain, rising$1.57.5 to close at$361.87.5. This puts the contract in line with the feeder cattle index, which closed at$361.59. Deferred contracts were weaker. May feeders fell 65 cents to 350 and 5 cents. This concludes today's commentary. We hope everyone has a great evening and we will talk to you tomorrow.