Written Commentary
CORN
Prices were $.05-$.06 higher while spreads firmed a bit. Dec-26 traded to a new high for the month while July-26 reached a 3 ½ week high. July-26 remains rangebound between $4.50-$4.80. Widespread rains across the US midsection will slow planting progress this week. 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%. I expect this afternoon’s crop update to show US corn planting to land between 20-22% through yesterday. Export inspections at 65 mil. bu. were in line with expectations and above the 62 mil. bu. needed per week to reach the USDA forecast. YTD inspections at 2.104 bil. are up 31% from YA vs. the USDA up 16%. Noted buyers were Mexico–14 mil. while Japan, S. Korea and Colombia all bought between 7.5-8.5 mil. bu.
SOYBEANS
Prices were higher across the complex with beans up $.10-$.14, meal surged $5-$10 while oil was up 35 points in choppy, 2-sided trade. Bean and meal spreads firmed while oil spreads were mixed. Most meal spreads traded to new highs. Resistance for July-26 beans is at LW’s high of $12.01 ¼. July-26 meal has resistance at this month’s high at $335.60. Resistance for July-26 oil is at LW’s contract high at 72.64. Spot board crush margins moved to fresh all-time highs at $3.52 bu. with bean oil PV slipping back to 52%. The Argentine meal cargoes rejected in the Netherlands reportedly tested positive for HB4, a drought resistant gene approved as safe by the US in 2019 and by China in 2022. USDA data shows EU meal imports have ranged from 16.6 – 20.6 mmt over the past 2 MY’s with the 25/26 forecast of 19.5 mmt. Brazil is the largest seller into Europe with roughly 50-60% annually with Argentina 2nd at roughly 36% on average. Peace talks between the US and Iran broke down this weekend as President Trump cancelled sending a US negotiating team to Pakistan on Saturday. Iran presented a new peace proposal to reopen the Straits of Hormuz in exchange for deferring talks on nuclear arms which will likely be rejected by the Trump Admin. June-26 WTI crude oil was up nearly $2.00 per barrel at $96.37. Spot RBOB is up $.03 per gallon while HO was up $.09. 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. I look for soybean plantings to reach 20-22% through Sunday, maintaining a record pace. Export inspections at 23 mil. bu. were in line with expectations. YTD inspections at 1.206 bil. are down 24% from YA vs. the USDA forecast of down 18%. China took 9 mil. bu. while Indonesia took 3.5 mil.
WHEAT
Prices ranged from $.02-$.13 higher. CGO July-26 was up $.13 at $6.29 ¾, KC July-26 was $.05 ½ higher at $6.75 ¼, while MIAX July-26 was up $.01 ¼ at $6.94 ½ 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. Saudi Arabia is believed to have purchased 985k mt of wheat for June-Aug shipment. Prices range from $273-$285/mt CF with most of it likely sourced from the Black Sea region. I look for WW ratings to slip another 1-2% down from 30% G/E LW while spring wheat plantings are expected to have reached 24-25%. US export inspections at 13 mil. bu. were in line with expectations. YTD inspections at 803 mil. bu. are up 12% YOY vs. the USDA forecast up 9%.
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