This past week felt like a month. By the time we arrived at Friday’s close, the hullabaloo surrounding the March 31 USDA nonsense was a distant memory. And it had only been the past Monday. So much happened in markets of every sector, when the latest CFTC Commitments of Traders reports were released Friday afternoon Ben sent me a message that read, “I can’t think of a more pointless CoT report since I started doing them.” (For the record, Ben automated these for us a few months ago, allowing the numbers to be posted within seconds of being released by CFTC.) He was correct. Most of last week’s activity occurred after the latest data was collected Tuesday afternoon/evening due to the US president’s self-proclaimed “Liberation Day” tariff tirade Wednesday afternoon.

Since then, the most frequent question I’ve been asked is what I think of the situation. Most of you have been with me long enough to know what I’d like to say, so I don’t need to repeat it. I will add this is what the US supposedly voted for. Certain uncertainty. The potential destruction of the US agriculture industry. The possible collapse of US investment markets and retirement holdings. Given this, folks should be happy with the way things have gone since January.

I was reminded of the conversation I had last August when an individual made the comment to me about how “Uncle Joe” (meaning then President Joe Biden) had destroyed his 401K[i]. At the time the S&P 500 Index had fallen from its July 2024 high, and then all-time mark, near 5,670 to a low of 5,119 during August, a loss of about 10%. As you would guess, he is a true follower of the current US president. (There is much I could say about this situation, but I won’t. Again, most of you have read and or heard it before.)

It would be interesting to visit with this particular individual now and get his thoughts because as of Friday’s low and close the S&P 500 Index had dropped 17.5% from its February high near 6,147, also a new all-time mark. My guess is his opinion is much like the other true followers: This selloff is still Uncle Joe’s fault, or if not the former president’s then Chairman Powell’s, or former President Obama, or anybody other than the current president’s statements and actions. Remember Jim Jones could do no wrong either.

What do I think will happen with US markets? I’ve answered this question a number of ways. Regarding US stock indexes, the traditional view is a 20% selloff creates a bear market. (I don’t necessarily believe this position, but it is industry standard.) Given that, a look at the long-term monthly charts for the three major indexes shows the S&P has lost 17.5% (as stated earlier), the Dow Jones Industrial Average is down 15%, and the Nasdaq has already dropped 23% from its all-time mark of 20,204.58 posted last December.

Those of you following along with my Monthly Analysis, a segment that can also be viewed as a long-term investment newsletter posted each month, will recall I talked about how these three major US indexes confirmed long-term downtrends by the end of March. From a purely technical point of view, then, I think US stock markets are going to continue to fall. Investors don’t like uncertainty, and as I said earlier the US supposedly voted for this very thing last November.

As for the US commodity complex, my standard answer these days is what we learned from WTI crude oil back in April 2020. The long-held believe the absolute floor of a market was $0[ii]is not true. Markets can go below $0. Are there markets that could actually fall that far? While I want to say no, anything is possible. A good example is the US soybean market[iii]. I could talk about a number of factors, but the bottom line is the intrinsic value of the market. The National Soybean Index was calculated at $9.18 on Friday, April 4 (2025), the NSI’s lowest weekly close since $9.14 the week of August 31, 2020. If we apply the economic Law of Supply and Demand (Market Price is the point where the quantity demanded equals the quantities available creating a market equilibrium.), then we know the US soybean market’s real supply and demand situation is as bearish as it has been in nearly 5 years. Looking ahead at the new-crop market the November 2025 futures contract settled last Friday at $9.8425, a new low weekly close for the 2025 issue.

I’ll close by returning to the original question: What do I think of the overall situation the US finds itself in? I’ll answer with a short story. Back in the day when I worked at a small branch grain elevator near Centerview, Kansas, one of my jobs was to climb the leg and grease the belt at the top. To do so meant a long climb up a thin metal ladder carrying a grease gun and usually accompanied by a friendly Kansas “breeze”. When I’d get to the top I had two choices. I could look back down the ladder, a somewhat frightening view given where I’d come from, or look out across the barren, desolate landscape.

Until next time.

Darin Newsom

[i] You can read my initial Afternoon Commentary monologue on this conversation from August 15, 2024. I continued my comments in the Afternoon Commentary for August 21, before writing a column about the conversation on August 22, “Darin’s Dogma”.

[ii] I wrote a Weekly Column about this event on April 20, 2020, “Life Below Zero”. You can read in the archives or on the homepage under “Public Columns”.

[iii] My latest piece for Barchart talks about US soybeans. (LINK)