Disappointing Crop Tour Fuels Higher Trade

MORNING AG OUTLOOK

Continued supply disruptions from the Black Sea region combined with disappointing crop tour results fueled higher trade across the Ag. space overnight.  US crop progress and conditions were largely in line with trade expectations.  The US Midwest has seen some relief from recent heavy rains with heaviest precipitation in the past 24 hours across C. NE.  Much of the Midwest will see light, scattered rain thru the end of the week with heaviest concentration across C. MO.  Normal to below normal temperatures for much of the C. Midwest and Great Lakes region while the SW plains remains hot and dry.  Cooler than normal temperatures with moderate precipitation for NE Argentina and S. Brazil while the rest of the cropland areas in SA will see above normal temperatures and minimal precipitation.  Turning cooler with prospects for healthy rains for S. France and Germany, likely too little too late to benefit EU corn production.  Energy prices are mixed and little changed with little progress in resuming peace negotiations in the Persian Gulf.  Spot WTI crude is up $.80 a barrel at $85.30.  Spot RBOB is up $.03 while HO is down $.02, pulling back after reaching a new contract high.  After trading to a 2-month low yesterday the US $$ is little changed.  US stock indices are steady to down 1%.

Corn: 

Sept-26 is $.01 higher at $4.66 while Dec-26 is up $.01 ½ at $4.91.  Both traded to a 3-month high overnight.  The Pro Farmer crop tour expect SD corn yields will only reach 149 bpa, down from their est. of 174 YA.  In OH they forecast yields at 180.2 bpa, down from 185.7 last year and in NE they pegged yields at 160.7 vs. 179.5 bpa YA.  US corn conditions slipped 1% to 60% G/E, in line with expectations.  Composite ratings improved in 7 states, declined in 9 while holding steady in 2.  Overall ratings fell to a new low for the growing season while slightly below the historical average.  76% of the crop is in the dough stage, 29% is dented while 4% of the crop is mature, all just ahead of the 5-year Ave.  Using updated USDA acreage data my model is suggesting an average US yield of 180.4 bpa with production at 15.983 bil. bu., just below the USDA forecast of 16.013 bil.  AgRural reports Brazil’s 2^nd crop is 85% harvested vs. 94% YA.

Soybeans: 

Sept-26 beans are $.06 ½ higher at $12.07 ½ while Nov-26 is $.07 higher at $12.23, both trading to new highs for the month.  Sept-26 meal is up $3.40 at $315.50 while Sept-26 oil is up 19  points at 71.63.  Crush margins are up $.02 at $2.73 ½ bu.  US Gulf FOB offers are holding $.30-$.35 bu. below Brazilian offers thru the end of 2026.  Yesterday’s NOPA crush at 216.6 mil. bu. was slightly below expectations.  Implied census crush at 222 mil. bu. bringing YTD to 2.436 bil. bu., up 8.4% from YA, in line with the USDA forecast.  To reach the USDA est. of 2.650 bil., crush in August would need to reach 214 mil. bu. vs. only 198 YA.  Bean oil stocks at 1.36 bil. lbs. was down 9.4% from June and below expectations of 1.454 bil.  Pod count data from the Pro Farmer crop tour as follows: SD – 946 pods per 3×3 foot square vs. 1,189 YA, OH 1,197 pods vs. 1,287 YA and NE at 1,269 pods vs. 1,348 YA.  Soybean ratings fell 1% to 61% G/E, in line with expectations.  Composite ratings match the lowest of the crop cycle while still just above their historical average.  Ratings improved in only 5 states, declined in 11 while holding steady in 1.  85% of the crop is setting pods vs. YA and 5-year Ave. of 80%.  Using updated USDA acreage data my model is suggesting an average US yield of 53 bpa with production at 4.547 bil. bu., just above the USDA forecast of 4.519 bil.

Wheat: 

Prices have turned mixed ranging from down $.02 to up $.03 across the 3 classes.  CGO Sept-26 is down $.01 ½ at $6.73 ¼, KC Sept-26 is steady at $7.58 ¾ while MIAX Sept-26 is up $.03 at $6.78.  the overnight high in Sept-26 KC was within a dime of its contract high at $7.77 ½.  Ukraine’s grain harvest has so far reached 30.8 mmt with 6.6 mil. HA (56%) of their cropland being harvested.  That total includes 23.8 mmt of wheat.  A German farm association forecasts their countries wheat harvest will reach 20.9 mmt, down 7.7% YOY.  IKAR reports Russia’s wheat export prices ended last week at $215 per mt, down $5 from the previous week.  They expect Russia will export between 2.1-2.6 mmt in August, up from 1.6 mmt in July. Winter wheat harvest advanced to 96%, vs. 93% YA and 5-year Ave. of 94%.  Spring wheat ratings increased 1% to 52% G/E.  With the increase, composite ratings remain just above their 5-year Ave.  41% of the crop has been harvested vs. the 5-year Ave. of 34%.  Updated acreage data and crop ratings suggest an average yield of 49.2 bpa and production at 457 mil. below the USDA forecast of 474 mil.

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