U. S. Draught Monitor
Commodity Markets the markets. If the Maps disagree with what my analysis of markets is saying, I still go with the markets. There are some government numbers used as markets for where we’ ve been rather than making guesses on where we are going. I’ ll leave it at that for now.
U. S. Draught Monitor
April Wrap-Up: Corn and Soy Trends
Let’ s talk about what we were seeing in the new-crop corn and soybean markets as April neared its end.
Corn
Recall I use a market’ s futures spreads, or price difference between contracts, to indicate what the supply and demand situation is. Why? Commercial traders position themselves through futures spreads based on expectations of available supplies in relation to demand at a later date. When evaluating futures spreads, the percentage of calculated full commercial carry( cfcc) covered is more important than flat price. The higher that percentage, the more bearish / less bullish the commercial outlook is for longer-term supply and demand.
Historically, I broke the range into thirds, with spreads covering 67 % or more considered bearish and 33 % or less viewed as bullish. Over the years I’ ve simplified it to 70 % and 30 % respectively, with 50 % straight up neutral.
At the end of March, the December 2025-March 2026 futures spread covered 41.5 % cfcc, a neutral reading as the U. S. headed toward planting season.
In late April, this same spread covered 46 % cfcc, meaning that despite the April rains the commercial side was still not concerned about new-crop supplies. In other words, the commercial side continued to see the reason in the rhyme,“ April showers bring May flowers.” Can this opinion change? Certainly. That’ s why we watch futures spreads day to day, week to week, month to month, and so on, looking for changes in the commercial outlook. Will it change? We’ ll see. If I knew that, I wouldn’ t be staring at a cinder-block wall in the basement office of my house.
Soybeans
The soybean market is made a bit more interesting by the fact the new-crop corn market spent last fall and winter buying acres away from soybeans in the U. S.
Recall I use another spread to tell me this, the weekly closes of the November Soybean / December Corn futures spread from the first week of September through the last week of February. This past period, Dec25 corn stayed strong against Nov25 soybeans prompting U. S. producers to plant more of the former and less of the latter. Do I care what changes USDA makes to its 2025 planted acreage guesses along the way? Do you even have to ask? What matters is what the commercial side thinks of new-crop supply and demand, so again we can turn to futures spreads.
As March came to an end the November-January futures spread covered 44 % cfcc. By late April, this same spread was covering 46 % meaning the commercial side hadn’ t changed its view all that much.
Speaking of spreads, I had to laugh as last month progressed given the loud squawking of those same BRACE members as they proclaimed soybeans were buying acres
March 2025
April 2025
back from corn. After the seed had been purchased. After fertilizer, and some crop specific herbicides, had already been put down. Sometimes all I can do is shake my head and go on. The reality is if soybeans were buying acres away from corn, the price relationship between the Nov25 futures contract and Dec25 corn would again be working in favor of corn. Why? We already know the commercial side is not concerned about new-crop supplies while demand carries a“ YUGE” question mark.
As we turn the calendar page we know what the markets are telling us. Nothing more, nothing less. Generally speaking, it’ s as simple as,“ April showers bring May flowers.”
About the Author
Darin Newsom has been working with markets in general for nearly 40 years, dating back to Black Monday 1987. Over that time, he has worked in local grain elevators, first dumping trucks then as a merchandiser, before becoming a commodity broker and advisor. That eventually led him to DTN where he spent 15 years as the company’ s senior market analyst before going out on his own with Darin Newsom Analysis, Inc.
These days, he also has the title of Senior Analyst for Barchart. Along the way, he has developed his own way of analyzing markets in every sector, always proudly reminding people that he is not an economist.
May 2025 | www. FarmersHotLine. com | 19