Welcome to the latest edition of the Paradigm Futures Agricultural Hedging Report! As of March 15, 2025, we’re seeing dynamic shifts across commodity markets. Here’s a breakdown of the key trends, data, and recommendations from our team to help you navigate the current landscape.
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Corn: Correction or Opportunity?
Corn prices have shown resilience, with May futures finding support in the $4.50-$4.60 range after a 40-cent rally off recent lows. While a short-term correction appears underway—highlighted by a new high and lower close on Tuesday—the market is testing prior resistance levels. Our next target? A break above $4.7075, which could signal the end of this correction and renewed bullish momentum.
Weekly Data Highlights:
- Export Inspections: A marketing-year high of 71.6 million bushels, up 18 million from the prior week, reflects strong demand amid tariff concerns.
- Export Sales: Consistent at 38.1 million bushels, with Mexico leading purchases despite tariff talks.
Outlook: We view the drop from $5.1875 to $4.42 as a correction, not a trend reversal. A move past $4.7075 could pave the way for higher prices, though a retest of $4.42-$4.50 remains possible early next week.
Recommendations: We’re 60% sold on 2024 corn and 10% sold on 2025, with a new crop sale recommendation of 10% at $4.84.
Soybeans: Undervalued with Upside Potential
Soybeans closed the week down 8 cents but showed resilience, finishing 23 cents off the weekly low. Support from robust export sales and a soybean meal market avoiding sub-$300/ton levels kept the market afloat. Momentum is building, with moving averages compressing (200-day at $10.585, 100-day at $10.285, 50-day at $10.4325). A break above $10.365 could turn the chart structure bullish.
Weekly Data Highlights:
- Export Sales: A seven-week high of 27.6 million bushels, far exceeding last year’s pace.
- Basis Strength: National average basis improved by a penny, supported by firm Brazilian basis despite their massive harvest.
Outlook: At $2.00 below breakeven ($11.20 cash), soybeans remain undervalued. We anticipate a rally to $12.00-$12.50 this growing season, mirroring corn’s recent trajectory.
Wheat: Mixed Signals Amid Drought Concerns
Wheat markets were choppy but closed higher: KC up 21.5 cents, Chicago up 5.75 cents, and Minneapolis up 9 cents. KC wheat broke above its 50- and 100-day averages, though all classes remain below their 200-day marks. Drought conditions are worsening, with 27% of winter wheat and 39% of spring wheat affected.
Weekly Data Highlights:
- Export Sales: A 36-week high of 28.8 million bushels, doubling last year’s average.
Outlook: Warm, dry weather in the Kansas wheat belt could pressure yields, supporting prices if moisture doesn’t arrive soon.
Recommendations: We’re 60% sold on KC and Chicago wheat, 35% sold on Minneapolis, with new crop targets at $6.64 (KC/Chicago) and $6.95 (Minneapolis).
Hogs & Cattle: Diverging Paths
- Hogs: April lean hog futures dipped 75 cents, correcting after a $7.00 rally. We expect support between 84.00 and the 50-61.8% retracement levels, with tariff risks looming. We’re 75% sold for summer 2025, with calls bought to retain upside potential.
- Cattle: June live cattle surged $2.85 to $199.325/cwt, nearing prior highs. Feeders hit new contract highs, signaling a strong uptrend. Cash cattle traded at $203-$206, with managed money holding a robust 112,816 net long position.
Broader Market Context
- Energy: Weakness persists amid uncertainty in EIA forecasts, though China’s rumored stimulus could lift demand.
- Dollar Index: We’re stepping back from our bearish stance, expecting a bounce to 105.50 before reassessing.
- Fertilizer: Improving U.S.-Russia relations could ease potash supply concerns, though UAN prices may see short-term upside.
What’s Next?
With the USDA Perspective Plantings and Stocks Reports looming at month-end, historical data suggests a positive price reaction for corn (average 10-year move: +4.72 cents). Stay tuned for our soybean and wheat charts next week!
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The risk of loss in trading futures and/or options is substantial, and each investor and/or trader must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades, statistical services, and other sources that Paradigm Futures believes to be reliable. We do not guarantee that such information is accurate or complete, and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice given will result in profitable trades.
