Written Commentary
MORNING AG OUTLOOK
Mostly lower trade across the Ag space ahead of today’s USDA production and WASDE reports. Energy prices are mixed and little changed. While tensions in the Persian Gulf remain elevated, fresh news is scarce. Spot WTI crude oil is up $.15 per barrel near $72.25. Spot RBOB is down $.02 a gallon while HO is off $.03. The past 24 hours showed heavy rain across portions of the S. Midwest with isolated flooding likely in SE MO and S. IL. Rains in WCB brought some relief in W. NE and KS ahead of the expected temperature surge this weekend into next week. Precipitation over the week to favor the S. Midwest and SE. Little to no rain for the NW corn and soybean belt along with the N. plains. 100+ degree temperatures are expected across the Dakota’s Sunday thru Wed. of next week. Week 2 of the outlook shifts the high pressure ridge further west limiting yield threatening heat to the NW plains. The potential for scattered rains in France over the next week is not expected to provide much relief with as temperatures remain well above normal. Seasonably warm temperatures in SA with rains limited to S. Brazil. The US $$ is slightly higher in 2-sided trade while US equity markets are mixed.
Corn:
Sept-26 and Dec-26 are both $.03 ½ lower at $4.28 and $4.48 ½ respectively. This week’s low in Sept-26 futures is $4.25 while also the midpoint of its range over the past 2 weeks. This week Dec-26 topped out just shy of $4.66, its 50% Fibonacci retracement between the May high and the June low. Yesterday’s US drought monitor showed US corn acres in drought held at 19%. Expectations for tighter US and global stocks should keep prices supported above their June lows. The markets’ attention will quickly shift back to US weather and yield prospects.
Soybeans:
Aug-26 beans are down $.02 ¾ at $11.75 while Nov-26 is $.04 ¼ lower at $11.77 ¼. Aug-26 bounced off its 100-day MA support at $11.71. Aug-26 meal is down $1.00 at $316.40 while holding between yesterday’s high and its 100-day MA. Aug-26 oil is up 28 points at 70.20 in 2-sided trade. Crush margins (Aug-26) rebounded another $.04 to $2.93 ½ bu. with bean oil PV holding near 52.5%. US FOB offers at the Gulf remain at a $.05-$.15 per bu. premium over Brazilian offers out to Nov-26. Prices to remain sensitive to Chinese demand. New crop flash sales at nearly 600k mt to China/unknown confirmed purchases from earlier this week, however more are needed to stay on track to purchase 25 mmt ahead of Brazil’s harvest early next year. With the Chinese demand potential and uncertain US weather I expect price pullbacks to be well supported.
Wheat:
Prices are steady to $.02 lower across the 3 classes in 2-sided trade. CGO Sept-26 is steady at $6.19 ½ as rally attempts appear capped at its 100-day MA at $6.20 ¼. KC Sept-26 is $.01 ¼ lower at $6.53 while holding within yesterday’s range. MIAX Sept is off $.01 at $6.38. Most eyes will be focused on US and EU wheat production. Global stocks among major exporters could challenge their 24/25 lows.
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