Commodities in Focus: Soybean Rally, Ethanol Swings, and Weather Risks

Soybean Futures Climb as USDA Lowers Planting Estimates

Soybean prices edged higher in overnight trading after the U.S. Department of Agriculture (USDA) projected a lower planting area than anticipated, sparking optimism in the market.

The USDA now expects U.S. farmers to plant 84 million acres of soybeans, missing trade expectations of 84.4 million acres. This marks a decline from last year’s 87.1 million acres and is also lower than the October estimate of 85 million acres. The reduced planting outlook has fueled bullish sentiment among traders.

Corn planting, on the other hand, is expected to reach 94 million acres, surpassing trade estimates of 93.6 million acres. Wheat acreage is now forecast at 47 million acres, slightly up from the previous projection of 46.7 million acres.

With planting intentions shifting, production forecasts remain key:

• Soybean production is projected at 4.37 billion bushels, with a yield of 52.5 bushels per acre.
• Corn output is forecast at 15.585 billion bushels, with a yield of 181 bushels per acre.
• Wheat production is expected to reach 1.926 billion bushels, with a yield of 50.1 bushels per acre.

Markets responded to the USDA’s outlook:

• Soybeans for May delivery gained 6¢ to $10.47¼ per bushel.
• Soymeal rose $1.30 to $303.80 per short ton.
• Soy oil added 0.08¢ to 45.67¢ per pound.
• Corn futures increased ¾¢ to $4.94¼ per bushel.
• Wheat futures softened, with Chicago contracts down 4½¢ to $5.75¼ per bushel, and Kansas City wheat slipping 4¼¢ to $5.94¼ per bushel.

Ethanol Production Slips While Stockpiles Hit Four-Year High

Volatility in the ethanol market continues as production declined while stockpiles surged to their highest level since 2020, signaling shifting supply and demand dynamics.

Ethanol output dipped to 1.081 million barrels per day, the lowest in nearly a month, according to the Energy Information Administration (EIA). While the Midwest—the heart of U.S. ethanol production—held steady at 1.033 million barrels per day, declines were recorded on the Gulf and West Coasts. The East Coast was the only region to report a slight production increase.

Meanwhile, ethanol stockpiles climbed to 27.571 million barrels, a sharp rise from 26.218 million barrels the previous week. This spike in inventories raises questions about short-term demand trends and potential pricing pressure in the biofuel sector.

Strong Winds and Dry Conditions Threaten Key Agricultural Regions

Weather remains a critical factor for commodities, and looming high winds across the Midwest and Plains could pose risks for agricultural areas.

Forecasts indicate wind gusts reaching 45 mph across central Nebraska, combined with low humidity and dry grasses, creating prime conditions for wildfires. These hazardous conditions extend to eastern North Dakota and western Minnesota, where sustained winds of 30–40 mph and gusts up to 60 mph could down trees and disrupt power lines.

With planting season on the horizon and supply chains sensitive to weather disruptions, market participants will be watching conditions closely. Whether it’s shifting acreage, ethanol market fluctuations, or weather risks, volatility remains a key theme in the commodities space.

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