Doing this in reverse order today…
The Week Ahead
The week ahead promises to be a challenging one as Donald Trump announced wide-sweeping tariffs against our largest trading partners on Saturday:
The most frustrating part of this trade war mess is trying to keep up with it because it is a near-impossible task.
For example, last Sunday’s spat with Colombia:
The back and forth tit for tat action played out live on X, leaving traditional news outlets far behind.
Heck, even I sent out two updates that were moot points by the time we all went to bed as Colombia caved for a second time by Sunday night.
With that being said, I started working on this update Friday evening, before the White House made any official moves against Mexico, Canada, and China.
That is why I will hit on last week’s market moves first before rolling into tariffs, trade and such.
Weekly Winners & Losers
A strong start
2025 is off to a strong start, with soybean meal and cotton as the only major ag commodities showing losses year-to-date.
Note: dairy products are down HARD thus far in 2025
The most interesting move is the Brazilian real's 6% gain vs the US dollar.
Nearby bean futures are up 32 cents year-to-date, but down the equivalent of 28 cents in real due to the Brazilian currency's APPRECIATION vs the dollar.
Haven’t been able to say that in a while!
The other big divergence is soybean meal vs soybean oil.
March soybean oil is up 14.3% YTD vs meal down 5%.
This divergence helped oilshare rally from below 39% at the end of December to 43.4% today.
The Ride
It’s been a roller coaster in soy products the past two months as policy uncertainty sent bean oil into a tailspin to end 2024 all while Argentine weather concerns supported the meal market.
Soybean oil rallied back though, once 45Z guidance (albeit still vague and FAR FROM A FINAL RULE) was released the second week of January, leaving meal to be sold by default (buy oil, sell meal and vice versa).
Meal has still seen its own independent days of strength amid Argy weather woes and soybean oil is firmly strapped into the front car of the roller coaster as it always has and always will be incredibly sensitive to any policy or tariff headlines.
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