Written Commentary
MORNING AG OUTLOOK
All green on the screen this AM as higher energy prices have supported agricultural commodities. Spot crude oil is up $1.55 per barrel with futures trading above $65 for the first time since last summer as tensions with Iran remain elevated. Gold continues to soar into new all-time highs with prices trading above $5,500 per ounce. The US $$$ is slightly lower while holding within yesterday’s range. US stock indices are slightly firmer with the latest round of corporate earnings coming in mixed. Export sales later this AM. Dry and much above normal temperatures across EC and southern Argentina thru early next week before cooler temperatures and better prospects for rain arrive. Soil moisture is in rapid decline. Look for lower crop ratings from the BAGE in this afternoons crop update. Brazil remains well watered in the central and northern growing areas, favorable for late developing crops however slowing harvest operations. Heat and dryness in the south causing some stress for developing crops. Frigid temps across the NC Midwest is gradually losing its grip. Extended forecasts continue to lean above normal temps in the west, below normal in the east with a dryer than normal outlook across the nation’s midsection.
Corn:
Mch-26 is up $.02 ½ at $4.32 ½ hovering just below yesterday’s high of $4.33 ¼. Major MA resistance just below $4.40. Yesterday’s EIA data showed ethanol production last week slipped to 327.5 mil. gallons which was above expectations and above the pace needed to reach the USDA usage forecast of 5.60 bil. bu. Only time will tell if the year round sale of E-15 is able to gain any traction. O.I. surged 21k contracts in yesterday’s trade that featured heavy speculative buying. Export sales are expected to range between 40-100 mil. bu. Price likely to remain range bound between $4.15-$4.40 until more is known about SA crops.
Soybeans:
Mch-26 beans are up $.07 at $10.82 hovering just below yesterday’s high while rechallenging its 100 day MA at $10.82 ½. Mch-26 oil is up 24 at 54.55 holding within yesterday’s range. Mch-26 meal up $1.20 at $299 with MA resistance at $303.30. This morning’s export sales are expected to land between 15-65 mil. bu. of soybeans, 225-500k tons of meal and 5-25k tons of oil. Monthly biodiesel and RD production, capacity and feedstock usage data on Friday. Census crush from December after the close on Monday. Soybean O.I. jumped 12k contracts in yesterday’s trade with both products slightly lower.
Wheat:
Prices are $.03-$.06 higher across the 3 classes. CGO Mch-26 is up $.05 ½ at $5.41 ½ while trading to its highest level in nearly 2 months overnight. KC Mch-26 up $.03 ¾ at $5.46 holding just below yesterday’s high. Huge range in Mch-26 MIAX overnight with prices currently at $5.78 up $.04. Export sales are expected to range between 10-22 mil. bu. Open interest in CGO rose just over 4.5k contracts indicating fresh money coming in the long side of the market, not just a speculative short covering rebound. O.I. in KC little changed at down 500 contracts.
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