Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space this AM to kick off the new week. Higher energy prices have lent support as US/Iran peace talks stalled. Pres. Trump cancelled plans to send the US negotiating team to Pakistan on Saturday whiling noting peace talks can happen over the phone. Iran has reportedly presently a new peace proposal to reopen the Straits of Hormuz in exchange for deferring talks on nuclear arms. June-26 WTI crude oil is up $.65 per barrel near $95. Spot RBOB is up $.01 per gallon while HO is up $.10. Widespread rain across central US this week will slow planting efforts. While portions of the S. plains will see drought relief this week, other areas in the WCB and N. plains will likely only see scattered rains. Week 2 of the outlook shows cooler than normal temperatures with below normal precipitation across much of the central and ECB. A dryer outlook for Argentina is favorable for crop maturation and harvest activities. Rains in S. Brazil this week while central and N. growing areas remain hot/dry stressing the 2nd corn crop. The US $$ index is moderately lower in volatile trade overnight. US stock indices are mixed and little changed.
Corn:
July-26 is up $.04 ½ at $4.68 while Dec-26 is $.04 higher at $4.88 ¼. Both trading to 4-week highs overnight. July-26 remains rangebound between $4.50-$4.80. The US House Committee on Rules is expected to hear legislation this week on a bill that would allow, but not require, fuel retailers to offer E-15 year-round. Farmers and ethanol manufacturers support the measure while gasoline refineries oppose it citing added compliance costs. Brazil is moving forward with plans to raise their ethanol blend in gasoline 2% to 32%.
Soybeans:
July-26 beans are up $.02 at $11.80 ½ while Nov-26 is $.03 ¼ higher at $11.59. July-26 meal is up $4.30 at $323.40 while oil is down 25 points at 71.08. The 50-day MA at $11.83 ¼ pretty much capped the rally attempt in July-26 beans overnight. Spot board crush margins moved to fresh all-time highs at $3.46 bu. up $.05 from Friday’s close. Money managers bought just over 17k contracts of soybean oil extending their record long position to over 165k. Across the soybean complex MM’s were net buyers of nearly 20k contracts extending their combined long position to a record high 479,184 contracts. Argentine truckers ended their protest over the weekend that has blocked certain commodities from reaching key ports delaying their export. The agreement allows truckers to a 16$ freight rate increase to offset higher fuel and transportations costs.
Wheat:
Prices are steady to $.03 higher. CGO July-26 is up $.03 at $6.20, KC July-26 is $.01 higher at $6.71, while MIAX July-26 is up $.02 high at $6.95 reaching a 10 month high in the process. Money managers bought 11k contracts of KC wheat extending their long position to 28k contracts, the largest since June-22. Ukrainian drones caused damage to a Russian fertilizer plant and oil refinery this weekend. Egypt’s Agricultural Ministry indicates they have purchased 363k mt of wheat from local farmers so far in the 26/27 MY that began at the beginning of April-26.
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