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Tariffs: Over the weekend President Trump announced 25% import tariffs on products from Mexico and Canada and 10% for products from China. Today both Trump and the Mexican president announced a one month stay on their tariffs. Trump had a conversation with the Canadian president at 2 pm Central today. We do not have word on any outcome of that conversation. The White House spokesperson noted he plans to speak with the Chinese president in the next two days. For corn, we had doubts on how much the tariff would have restricted Mexico's interest anyway. With their heavy drought they are in a tough spot. Many buyers would prefer the established rail network from the US anyway. With today's news it further allows corn a sigh of relief. On a related note, this is not the end to the story. Trump has one more month of playing will he/won't he.

AgLeaders Conference: The January edition of the AgLeaders Conference series wrapped up last week. For 2025 we see US corn acreage at 93.7 million. That would be +3.1 from last year. With both higher acres and a return to trend yield, last year was -0.9% from trend, production will be boosted +721 million from last year at 15.588 billion. That would be a new record. Along with a lower beginning stock, total supply will be +498 from last year at 17.153. That would be a new record. With a moderate offset by higher demand we see ending stocks rising from 1.540 billion USDA old crop to 2.063. New crop corn is back in the same crowd as “other heavy supply years”. For price our new crop December corn futures forecast suggests a chance or two near $5.00. Prices are forecast to run below $4.00 at some point later this year. Now it is time to plan out the year ahead with your Allendale marketing specialist.

Brazil 1st Crop Harvest: AgRural estimates the small 1st corn crop harvest at 14% complete.

Brazil 2nd Crop Plant: AgRural estimates planting for the large 2nd corn crop at 9% complete. 2nd crop is typically planted in January and February.

Argentine Concerns: Agro-climatologist, Eduardo Sierra who advises the Buenos Aires grains exchange, said harvests of soy and corn would likely end up well below current forecasts - depending on when rains arrived. "If it started to rain now, you could have 45 million tons of each crop. Every week in February that goes by without rain, you lose 5 million tons more," he said, estimating that both soy and corn would end up closer to 40 million tons. USDA is currently at 51, the two exchanges are 49 and 48 and the US ag attache is at 49. In our view this is a background supportive story, not one yet that US corn can rally on alone.

Basis: Corn basis at harvest lows in Central Illinois was -0.43. It rallied up to -0.14 in December. Current levels for our model location have widened back out to -0.30 as of Friday th 31st. A rally in futures, and heavy farmer sales, have kept basis at wide levels. Corn basis is actually worse than years considered “heavy supply years”.

Export Sales Hold Firm: Corn export sales 1/16 - 1/23 totaled 1,358,543 tonnes on Thursday's weekly report. The remainder of the year can slip to -15% from the five year average and still meet USDA's current goal. This week was +3%. The prior four weeks before that were +25%. USDA lowered their export view on 1/10 by -25 million bushels. They could put that back on if they wanted to.

Micro Grain Futures: CME Group announced a plan to start a new series grain futures contracts. Starting on February 24 they will start contracts 1/10th the size of regular ones. This will include corn, soybeans, soymeal, soyoil and wheat.

Brazil Harvest/Plant: On Monday AgRural estimated the 1st crop corn harvest at 9% complete. Second crop planting, now in its third week, is a little low at 2.2% complete.

Argentina Cuts Export Taxes: Two weeks ago the Argentine government announced a reduction in export taxes. This will be temporary and lasts through June. The current 12% corn tax rate falls to 9.5% through June. For corn this is not a major story. It would lightly lower their export bid by $4 per metric tonne.

USDA's Production Decline: A large surprise was noted for US corn on 1/10. Fall production was revised -276 million bushels to 14.867 billion. This was the second largest decline on the January report in history. This came from a light -151,000 decline in planted acres and +186,000 for harvested. The main driver was the large -3.8 bpa hit to yields, now at 179.3 bpa. Corn yields end the year -1% from USDA’s starting view of trend, 181.0.

USDA's Tightened Ending Stocks: Ending stocks were lowered from 1.738 billion last month to now 1.540.

Corn Pricing: For some time, we have been trading below implied economic value. A trade policy risk discount is reasonable. The question is how much? This is also important when the corn balance sheet has tightened for seven months in a row. Our models imply a futures price of $5.60. Given we are not too concerned about trade policy changes hitting corn too much, it is more of a soybean issue, we feel a 40 cent discount is more reasonable. Being as conservative as we can, perhaps a 60 cent risk could be seen. Bottom line in our view, the balance sheet now allows $5.00 on a very conservative basis.

Brazil continues to see recorded rainfall at levels below the forecast. That continued through last week where corn areas saw rains -50% from normal. The trade is not dramatically concerned about this deficit as this is their time for excess rains. Last week's rain, even with a -50% hit, was still adequate at 0.8 inch in the corn area. Brazil is harvesting the early planted areas of 1st crop corn. Yield development is being finalized now on the later planted areas. Active planting, though delayed, of the big 2nd crop is now occurring. The forecast for the corn area for two weeks ahead is 3.0 - 5.5 inches. The average for those two weeks is 3.2.

Argentina saw rains last week -38% from normal. The prior four weeks were also dry at -37% from normal. Last week's Argentine rain was 0.7. Their corn crop is in active yield determination. There is light concern. The latest forecast shows a bump up to 1.0 - 4.0 inches for most areas. The norm is 2.2 over two weeks.

Pricing: According to our pricing models a 1.9 billion stock equals 475. A normal non-linear pricing relationship shows a stock down to 1.5 would suggest $5.75. USDA's current 1.540 billion stock view would imply $5.60 pricing if we had no trade risk discount. How much of a discount is valid is the main question?

Chart: March Corn is in an uptrend. New highs were made last week. Today's trade managed a fill of the gap left from the 1/30 close, 504 ¼. It also posted an Outside Day that closed higher. This implies a higher start tonight. Next resistance is the 508 peak from May. Near term support for this uptrend is at 443…Rich Nelson

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