To say market volatility has increased recently would be an understatement. Much of this has been caused by uncertain trade relations with the U.S.’ top global partners, mainly China, the European Union and Japan. The ensuing reaction in the equity markets generated safe-haven buying, which is when traders tend to favor ownership of physical backed products, such as commodities.

Recent safe-haven buying has been most noticeable in precious metals. This has caused gold to spike to all-time highs as managed money flooded the contract. With gold reaching uncharted territory, we are seeing buyers surface in other markets, including the ag sector. While this has supported commodity futures, it has elevated market volatility at the same time.

One of the greatest unknowns in the market right now is how tariffs may impact future global trade patterns. While tariffs will disrupt trade relations, there are still only a few sources for significant commodity imports from, with the U.S. being a leading one. This is especially the case for corn as the South American soybean export program is making its seasonal build in volume which does slow U.S. loadings.

Even so, importers are still buying soybeans from the U.S. in the spot market, especially those exempt from U.S. tariffs. Some importers also feel the risk in commodity markets is greater than the cost of tariffs.

Traders have trimmed their long livestock positions as more uncertainty builds on future red meat demand. Lower energy costs will help maintain domestic demand if the economy starts to soften, but more concern is being shown for future exports. This is especially true into the Chinese market as retailers in the country are now pushing for Australian beef over that from the United States. China is also showing elevated demand for Brazilian pork imports. The potential loss of this trade is more negative for livestock right now than lower livestock numbers is supportive.

There has been a shift in the global vegetable oil market that has pressured the soy complex. Until recently soy oil has held a $100 per metric tons discount to palm oil in the global market. This has now reversed and palm oil is holding a $100 ton advantage over soy oil. This spread has caused a sizable drop in the U.S. crush margin with returns losing 30 cents per bushel crushed in just 10 days.

Brazil announced it would be raising its biodiesel blend rate to 15 percent though, adding 1 percent to projected soy oil usage. While not a lot, this will open the door for future U.S. export business on soy oil, giving that contract support.

While soy oil export demand remains high and shows signs of building, we are seeing doubt over domestic usage. Two more biodiesel plants in Iowa were idled recently due to uncertainty over the future of the 45Z tax credit policy. Data shows this brings the total number of off-line plants in Iowa to five. This accounts for one-third of the state’s biodiesel capacity.

China released its first quarter pork production data, and as expected, numbers were up from last year. A total of 16.02 million metric tons of pork was produced in China from January through March, a 1.2 percent increase from the same period in 2024. Hog slaughter was up from a year ago at 194.8 million head, but same as in the United States, heavier weights added to product output. Hog values have also increased in China, but ongoing concerns over the country’s economy and light consumer demand have capped the country’s hog market.

The Brazilian crush group Abiove has released its updated soybean export numbers. Abiove is now forecasting 2025 Brazilian soybean exports of 108.5 million metric ton, up from their prior forecast for 106.1 mmt. Prospects for elevated trade with China caused the bump in forecasted demand. This higher export forecast will impact the country’s ending stocks, with Abiove cutting projected carryout by 40 percent. This puts Brazil’s ending stocks at 5.4 mmt compared to its prior 9.1 mmt projection.

The Internation Grains Council also updated it global grain forecast. The IGC now puts the world corn crop at 1.274 billion metric tons, up a large 5 mmt from its prior estimate. Larger production forecasts for both South and North America added to this increase. The world wheat crop was trimmed 1 mmt, putting it at 806 mmt.

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