Special Edition – Market Trends Report – USDA Report March 31, 2025
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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 South Korea, Japan and Mexico considering counter tariffs which may affect the wheat trade. Keep in mind, wheat movement is usually about “cheap” and that will continue. Cold weather in the American plains in the next few weeks has the capacity to damage American wheat and take prices higher.
In Ontario producers are gauging the health of their wheat crop after a particularly difficult winter. In the next few weeks wheat farmers will continue to side dress with nitrogen in their never-ending battles to get big wheat yields. As it is, the low Canadian dollar at $0.70 is helping Ontario domestic wheat prices. However, these prices near $6.28 a bushel for old crop and $6.55 for new crop don’t give us a lot of solace. Another wheat price rally before harvest would be a blessing.
The Bottom Line (cont.)
The effect of tariffs on the Canadian dollar has been mitigated because of earlier dips in the currency when the Americans first referred to Canada as the 51st state. In the most recent tariff announcement on April 2nd Canada and Mexico were not included. Overall, though, the talk of tariffs and the April 2nd announcement have been negative for the value of the US dollar. This was unusual especially for the world’s default currency. The Canadian dollar responded in kind by going up when the US dollar goes down. However, going up to the 70-cent level is still a reflection of where we find ourselves versus the United States in this trade war
As we all know we’re currently in a federal election. Each political party has stated there pro Canada stance. There will likely be announcements for more assistance to Canadian agriculture from all parties going forward. Ontario and Quebec corn wheat and soybeans might find an export home within the EU as our preferential tariff treatment (CETA)there continues. U.S. tariff action against the EU has resulted in counter EU tariffs against American grain. This should help Ontario grain exports into Europe.
Clearly though, all of these tariffs and counter tariffs have caused a stickiness to the agricultural economy. We are not winners as farmers. We simply have to pick up the pieces like we have so many times in the past to find a way forward. Keep in mind that the market is never wrong but also keep in mind that sometimes it just doesn’t make sense. We are in some of those times now.
At the end of the day grain fundamentals matter. How much supply and demand is there and how is that going to change short term and long term? At the same time, we have all the non-commercial players investing capital in markets both long and short. On top of that we have all the weather risk which usually accentuates in late spring when the crop is at risk. The hard part is balancing all of these different marketing factors. Clearly in April of 2025, that got much more difficult. Keep in mind, the task still can be done, and risk management never gets old. At the end of the day, there will be many marketing opportunities ahead.
