By: Andrew Catsimanes, Copywriter • Production
Key Takeaways
Despite expectations leading into the April WASDE report, USDA’s global numbers landed squarely in the neutral zone. That gave grain markets room to breathe—for now. Arlan Suderman, Chief Commodities Economist at StoneX, noted that while there were no major surprises, the context around these numbers remains anything but calm.
Suderman emphasized that corn demand strength was a notable bright spot, with year-to-date inspections running well ahead of pace needed to meet USDA targets. Soybeans were more ambiguous, with questions around crush demand and export pace creating lingering uncertainty. Wheat remains the least fundamentally supported of the three, with ample stocks and muted export interest.
Suderman pointed to continued strength in corn export inspections and ethanol use, both exceeding USDA expectations. But while that’s positive in the short term, future support will hinge on global demand resilience and the direction of U.S. energy policy—especially as it intersects with biofuels. The Trump administration’s signal to collaborate with Big Oil on a new biofuel framework raises hopes of clarity, but execution remains uncertain. Ethanol mandates are expected to remain near 15 billion gallons, while biodiesel targets are poised to rise—potentially lifting soybean demand if policy details align.
While macro and trade dynamics often dominate headlines, Suderman reminded the audience that weather remains the biggest variable for grain markets. He underscored 2025 as a year with heightened weather risks, particularly for corn. Soil moisture maps and historical analogs point to a scenario in which July and August temperatures could make or break yields. Heat and dryness during these key months, especially in the western Corn Belt, could lead to a supply shock in a market not priced for stress.
Trade policy remains a wildcard. Suderman detailed how the “Trump 2.0” tariff regime—with 10% blanket tariffs on nearly all countries and escalations for retaliatory moves—has created ripple effects across the ag economy. China, having chosen escalation over negotiation, now faces 125% tariffs, putting U.S. commodity exports to Asia in a precarious position. The administration’s proposed port fees for ships tied to China add another layer of concern, particularly for grain exporters. Depending on how these fees are structured and applied, they could represent a material cost increase for shippers.
Looking ahead, Suderman sees a market increasingly vulnerable to headline-driven volatility—from tariff feuds and regulatory shifts to unpredictable summer weather patterns. “We’ve moved from a world of data dependency to a world of narrative volatility,” Suderman said. “Markets are now trading tweets and tariffs as much as they are fundamentals.” With uncertainty elevated across all fronts, Suderman’s message to producers and market participants was clear: Stay nimble. A neutral USDA report may offer a short reprieve, but the 2025 growing season and trade landscape remain anything but settled. This article is based on insights shared during Arlan Suderman’s April 2025 Commodity and Economic Outlook webinar. Watch the full episode here.
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–– Written by: Andy Catsimanes
–– Expert: Arlan Suderman, StoneX Chief Commodities Economist
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Dry soil is slowing winter wheat planting in Russia and Ukraine, with a third of Ukraine's area in moisture deficit. Lost export revenue and costly diesel add a second risk to the size of the next Black Sea wheat crop.
September 23 – The Nasdaq hit another fresh all-time high yesterday, with the S&P 500 close to doing so as well, though stock futures are pointing to a quietly lower start to today’s session after surging higher to start the week as optimism surrounding this week’s various diplomatic pushes abounds. That optimism continues to be reflected in the VIX, continuing to hang around roughly three-week lows, trading at 14.3 this morning. The dollar is surging higher, adding to the week’s gains, as it nears the 101 mark for the first time in nearly two months. Treasury yields are off to a higher start, with 2-year yields back up to 4.80%, 10-year yields at 4.99%, and 30-year yields just above 5.32%. Crude oil prices are looking to hold their ground after a steady decline since late last week, with nearby WTI up 1.3% to trade near $91 and nearby Brent up 1.4% to trade near $100.65 at the time of writing. The ags are mostly lower to start the day, likely influenced in part by managed money selling off some existing length amid hopes for improvement regarding commodity flow through the Black Sea as part of this week’s diplomacy blitz.
September 22 – The Nasdaq and S&P 500 both closed within 1% of their all-time highs yesterday, with stock futures pointing to a quietly higher open at the time of writing. Diplomacy continues to be the theme of the week, with markets pricing in optimism, particularly in the tech sector following encouraging results from the weekend’s meeting between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. It’s also worth noting that Bessent yesterday announced the two sides would be meeting again to discuss AI safety and communication protocols in Shenzen, China in about two months, another potential sign of cooperation instead of escalation. The VIX continues to reflect optimism regarding this week’s various diplomatic pushes as it hovers near its lowest level since early September, starting the day trading just below the 14.7 mark. The dollar is sitting just above unchanged, near 100.46 at the time of writing, touching a fresh two-month high earlier this morning. Treasury yields are quietly lower to start the day, also helping bring some calm to Wall Street, with 2-year yields at 4.747%, 10-year yields at 4.949%, and 30-year yields at 5.279%. Crude oil prices continue their push lower, with nearby WTI down another 1.8% to trade near $90.30 and nearby Brent down 1.6% to trade near $98.70, both roughly two-week lows. The ags are looking at a turnaround Tuesday to kick off the session with most of the complex in the red at the break, led down by the wheat complex. Improving forecasts for planting conditions for the U.S. winter wheat crop are likely having some influence, but I’d also point out the signs of potential increasing U.S. pressure on Ukraine, which we’ll dive into in more depth below, possibly spooking out some managed money length.
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