👋 Good morning! It's that time of year when our productivity takes a nosedive, all thanks to those irresistible March Madness office pools. If your bracket is already busted, courtesy of McNeese's “Cinderella” story against Clemson, don't worry, you're in good company. Now, let's pivot from court-side upsets to the latest in ag news that'll have you dribbling with excitement."

• 🎥 🏀 12 over 5 upset

— TDY team

Market pulse

A blend of cautious optimism and strategic recalibration

📊 A brief overview on how the markets fared yesterday…

• Crude Oil: Prices increased, driven by a solid U.S. demand outlook and a weaker U.S. dollar. Government data revealed a larger-than-expected drop in distillate inventories, including diesel and heating oil, which decreased by 2.8 million barrels. Additionally, heightened geopolitical tensions in the Middle East contributed to concerns over potential supply disruptions. ​

• Copper: Prices surged past $10,000 per tonne for the first time in five months, propelled by robust demand and apprehensions regarding potential U.S. tariffs on copper imports. Traders sought to secure supplies ahead of possible trade restrictions, reflecting the metal's critical role in various industries. ​

• U.S. Equities: Major stock indexes experienced slight declines as investors processed ongoing policy shifts and economic signals. The S&P 500 decreased by 0.2%, the Dow Jones Industrial Average edged down by less than 0.1%, and the Nasdaq Composite fell by 0.3%. These movements reflect investor caution amid evolving economic policies and market dynamics.

Overall, the day's market movements underscore the intricate interplay between economic forecasts, geopolitical developments, and investor strategies

Ag-bite bulletin

🌽 €32M Maize Bet: Bayer throws €32 million into a maize seed powerhouse in Zambia, set to triple production by 2025. But it's not just about growing more corn—this facility is also sprouting jobs, with 80 permanent roles, 100+ seasonal gigs, and 15,000 farm jobs. They’re even upgrading water systems and funding a health center for 10,000+ people. The bigger play? Food security. Bayer’s climate-resilient maize will reach 6.4 million farmers this year, aiming for 10 million by 2030, feeding 30 million people. With plans to double their African agribusiness by 2030, Bayer isn’t just planting seeds—they’re planting market dominance.

📉 Soggy Sales, Sinking Stock: General Mills (GIS) shares fell 5% premarket after posting a 5% drop in Q3 sales to $4.84 billion, missing expectations. Weak retailer inventory, sluggish snack demand, and fewer away-from-home meals weighed on results. EPS of $1.00 beat estimates but still fell 15% year-over-year. Adding to the pain, the company slashed its 2025 outlook, now expecting sales to drop 1.5%-2% and EPS to fall 7%-8%, worse than prior forecasts. With shares already down 12% this past year, investors seem to be skipping breakfast on this one.

💰 Eco-Friendly Crop Protection: Belgian startup BiocSol has secured an additional €4.4 million in funding, inching closer to its €10 million target to revolutionize sustainable crop protection. This latest investment includes equity from Dutch impact fund Pymwymic and support from the Walloon Region's Win4company program. The funds will accelerate BiocSol's R&D efforts and global proof-of-concept demonstrations for its biofungicide products, offering eco-friendly alternatives to traditional chemical pesticides.

The big picture

The ABCDs of Ag: Giants Juggling Diversification in a Boom-Bust Circus

Once the kings of commodity chaos, the "ABCD" agribusiness giants, Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus, are now facing a reality check. After cashing in on supply chain mayhem post-Ukraine invasion, they’re learning the hard way that riding high on market volatility only lasts so long. Now, with grain prices stabilizing, they’re scrambling to reinvent themselves, kind of like an aging rock band trying to stay relevant by experimenting with jazz.

Plunging profits & shrinking margins…

ADM and Bunge, the publicly traded members of the group, both reported massive profit drops in 2024:

• ADM: 48% decrease in profits, revenue down 9.8% to $85.5 billion.

• Bunge: 49% decline in profits despite a major merger attempt.

• Cargill: 10% revenue drop to $160 billion, prompting a 5% workforce reduction (8,200 jobs).

• Louis Dreyfus: Earnings fell 14% in the first half of 2024.

For companies that thrive on market volatility, these figures paint a worrying picture. With grain prices settling down, the once-lucrative arbitrage opportunities have dried up, leaving them exposed to their biggest weakness, thin margins and limited pricing power.

Good idea, bad execution?

To avoid getting whiplashed by commodity price swings, the ABCDs have been experimenting with diversification, but the results have been underwhelming:

• ADM bet big on the nutrition business, spending billions on acquisitions like Wild Flavors, but it still contributes less than 10% of total revenue. Worse, ADM is now under a regulatory probe for accounting discrepancies in that division.

• Bunge tried to scale up through an $8.2 billion merger with Viterra, aiming to create a $25 billion agribusiness empire. However, skepticism remains over whether bigger means better in a low-margin business.

• Cargill pivoted into meat processing and plant-based proteins, which helped for a while, but like grain, the meat industry is notorious for its own booms and busts.

• Louis Dreyfus decided to double down on its core, trading and shipping, avoiding over-expansion but still suffering from shrinking profits.

What this means for you?

If you’re an investor, farmer, trader, or agribusiness pro, here’s what you should be paying attention to:

• Investors: Watch for companies that execute diversification well, not just spending money but actually integrating high-margin businesses successfully. ADM’s nutrition struggles prove that throwing billions at a sector doesn’t guarantee success.

• Farmers: Be prepared for market fluctuations as these giants shift strategies. Supply chain stability could be at risk if mergers lead to more consolidation and fewer competitive buyers.

• Commodity Traders: Volatility is still king, while prices are calmer now, geopolitical risks (think China, Russia, U.S. tariffs) could shake things up again. Stay nimble.

• Agribusiness Professionals: Companies looking to avoid the ABCD fate should focus on technology, efficiency, and alternative revenue streams, not just reacting to the next price cycle.

For decades, these agribusiness giants relied on their ability to profit from price swings. Now, as markets normalize, they’re struggling to redefine their roles. Whether through better diversification, strategic M&A, or new technologies, the next few years will determine if the ABCDs can evolve, or if they’ll just keep riding the same old commodity rollercoaster.

World news you should probably hear

• Trump Moves to Dismantle Department of Education – Trump signed an order to shrink the Department of Education, cutting staff and shifting functions, though major programs remain intact.

• Canada Calls Early Election Amid U.S. Tensions – PM Mark Carney set an April election, citing Trump’s tariffs and threats to Canadian sovereignty.

• Greenpeace Fined $600M Over Pipeline Protests – A court ordered Greenpeace to pay Energy Transfer, sparking concerns about free speech and activism.

• Newsom’s Podcast Features Right-Wing Guests – California Gov. Gavin Newsom launched a podcast with right-wing figures, drawing backlash from Democrats.

Tractor thoughts

The biggest difference between bravery and stupidity is simply whether or not it worked out in the end. source