Corn + Beans Give Back Portion of Gains

MORNING AG OUTLOOK

Lower trade across the Ag space this AM with corn and soybeans giving back a portion of yesterday’s gains.  Wheat is the leader to the downside as US harvest is nearly the halfway point.  Speculative traders were healthy buyers yesterday creating key reversal trade in corn.  Markets will remain sensitive to indications of Chinese trade interest.  Energy prices are back on the defensive after yesterday’s rebound.  Spot WTI crude oil is down $1.65 per barrel near $70.25 while so far holding within yesterday’s range.  Spot RBOB is down $.05 a gallon while HO is off $.06.  Heavy rains stretched from central KS across the S. Midwest the past 24 hours with isolated flooding likely near Wichita KS.  Lighter rains in W. NE to help ease drought conditions.  Precipitation over the week to favor the Ohio Vally region and N. plains.  Only scattered rains elsewhere while dry across much of TX where triple digit heat is expected into early July. Much above normal temperatures is expected to impact much of the nation’s midsection by early next week.  Europe remains hot into early July.  While dry in the west, central Europe likely to see scattered precip.  Rains in South American will be limited to S. Brazil.  Cooler than normal in Argentina and S. Brazil, above normal temperatures for C. and N. Brazil.  The US $$$ is moderately lower while US stock indices range from steady to down 1.2%.

Corn: 

July-26 is down $.01 ¼ at $4.13 ½ while Dec-26 is steady at $4.43.  Inside trade for both. Exports continue to run 25% over YA vs. the USDA forecast of up 16%.  For next week’s USDA update I see corn acres dipping to 94.75 mil. while my June 1^st stocks est is 5.425 bil bu.  The Ave. estimate in the Reuters survey shows acres at 95 mil. down from 95.3 in March with stocks at 5.408 bil vs. 4.643 bil YA.  Yesterday’s drought monitor showed US corn acres in drought slipped another 1% to 22%, still above the 16% from YA.  The BAGE reports Argentine corn harvest has reached 51% while holding their production forecast at 64 mmt vs. the USDA est of 61 MMT.  Agroconsult raised their 2^nd Brazil crop production forecast 3.7 mmt to 115.8 mmt.  Their total production forecast at 144.1 mmt is well above the USDA est. of 138 mmt.

Soybeans: 

July-26 and Nov-26 beans are both down $.06 at $11.21 ½ and $11.51 respectively, both holding within yesterday’s range.  July-26 meal is down $3.40 at $304.80 while July-26 oil is down 36 points at 70.45.  Crush margins fell back $.06 overnight to $3.23 ½ bu.  Prices will continue to be sensitive to Chinese demand, or the lack thereof.  US FOB offers at the Gulf are back to a slight premium over Brazilian offers for July/Aug-26, while slightly below Sept-26 forward.  China’s first new crop purchase of 200k mt showed up in yesterday’s export sales report with another 529k to unknown.  Reuters forecast at 1.046 bil.  The BAGE reports Argentine soybean harvest has reached 98% while holding their production forecast at 50.1 mmt, in line with the USDA est. of 50 mmt.  US soybean acres in drought slipped another 1% to 22%, still above the 12% from YA.

Wheat: 

Prices range from $.06-$.12 lower across the 3 classes.  CGO July-26 is down $.12 at $5.79, KC July-26 is $.11 ½ lower at $6.09, while MIAX July-26 is $.06 lower at $5.81 ¼.  Support for CGO July is at this month’s low of $5.71.  KC July-26 reached a fresh 2 ½ month low while MIAX made a new contract low.  Look for higher spring wheat ratings on Monday with rains across the N. plains this week.  Winter wheat acres in drought fell 6% to 57% while spring wheat acres in drought rose 2% to 25%.  The BAGE reports Argentine plantings have advanced to 66% while leaving their acreage forecast unchanged at 6.5 mil. HA.

Interested in more futures markets?  Explore our Market Dashboards here.