02/26/2025 Risky Business

On the Grains
Good morning. As we finish out the week, all eyes are on what President Trump does over the weekend regarding Mexico and Canada’s tariffs. His comment, “On time,” killed almost all grains yesterday except oats. So far, 47’s tariffs have been all bark and no bite, which seems to be playing into his hand to get what he feels is necessary. At some point, though, people get pushed enough, and that bark turns into a bite. Overall, risk-off was the theme yesterday and will likely continue today. It’s risky business to continue to hold long positions in the commodities markets, especially commodities that rely on exports, such as corn, soybeans, and hogs. Both the corn and hog funds managers hold large positions. Of the two, corn and hogs, corn has a much stronger storyline, with Brazilian stocks to use at a record low. We know that 24/25 exports are currently running at a blistering pace and will need to see either a massive reduction shortly or the USDA yet again increase the export figures. With another leg lower, closer to the 50-DMA, several clients will be locking up their feed needs for the summer.