Written Commentary
CORN
Prices were $.08-$.10 higher, closing near session highs. Spreads were mixed. Both Sept-26 and Dec-26 jumped out to 8-week highs. EIA data showed ethanol production rebounded to 322 mil. gallons last week, up from 306 mil. the previous week and up 1.5% from YA. Production was at the high end of the range of expectations, however below the pace needed to reach the USDA corn usage est. for a 14th consecutive week. There was 107 mil. bu. of corn used, or 15.34 mil. bu. per day, below the 15.6 mbd needed to reach the USDA forecast of 5.550 bil. bu. Stocks rose to 24.5 mil. barrels, just above YA at 24.4 mb. Implied gasoline usage last week rose 1.2% to 8.947 tbd which was steady with this week YA. Friday’s cattle on feed report is expected to show inventories at 102.2% of YA at 11.372 mil. head. Threatening US weather combined with hopes of Chinese demand keep the path of least resistance higher. The odds of not reaching the USDA 183 bpa yield is on the rise. Dropping this year’s Ave. yield to 178 bpa would reduce US stocks to 1.35 bil. bu. with a stocks/use ratio of 8.3%. This would support an Ave. Farm price of $5.60 bu. vs. the current estimate of $4.40. Tomorrow’s export sales are expected to land between 25-65 mil. bu. for both crop years combined.
SOYBEANS
Prices were moderately higher across the complex with beans up $.13-$.16, meal was $5-$6 higher while oil was up just over $.01 lb. Bean and oil spreads were mixed while meal spreads weakened. The next significant resistance for old crop soybeans is $12.58 ¼, the May-24 high on the weekly continuation chart. Today’s high in Nov-26 beans at $12.40 ¾ was a tick away from its contract high. Aug-26 meal traded to a 7-month high with next resistance at $342.60. The N. Midwest and ECB will experience normal to below normal temperatures the next few days before rebounding this weekend. Extreme heat returns to much of the WCB and plain states by late this week, while limited prospects for rain will raise crop stress levels. The hot/dry pattern looks to hold into early Aug-26. Crush margins jumped $.10 to $3.26 ½ bu. with bean oil PV reaching 53.2%. US Gulf FOB offers remain $.15-$.20 above Brazilian offers thru Sept-26 while slipping to a $.05 discount by Nov-26. While it was another day of no flash sales, expectations for continued demand interest from China (and others) coupled with an uncertain weather outlook in the WCB will likely keep the path of least resistance to the upside. The market has little wiggle room for US yields to slip below the current 53 bpa trendline forecast. The current USDA Ave. farm price forecast at $11.40 bu. appears high with stocks projected at 310 mil. bu. and a stocks/use ratio of 6.9%. Dropping the Ave. yield to 51 bpa would reduce stocks/use to only 3.1% supporting an Ave. farm price of at least $12.00 bu., however I sense prices would be significantly higher. Tomorrow’s export sales are expected to range from 40-80 mil. bu. of soybeans, 200-500k mt of meal and -2-10k tons of bean oil.
WHEAT
Prices range from $.24-$.31 higher. CGO Sept-26 was up $.27 ¾ at $7.05 ¾ having carved out a fresh contract high at $7.08 ¼. Next resistance is $7.20, the May-24 high on the weekly continuation chart. KC Sept-26 was $.30 ½ higher at $7.63 ½ also establishing a new contract high while reaching a 3-year high on the weekly chart. MIAX Sept-26 was $.24 ¾ higher at $7.29. Supply disruptions from the Black Sea region coupled with expectations for lower production in the US/EU will likely keep the path of least resistance higher with volatility elevated. Freight insurance is becoming costly if not impossible to obtain. Hopes for a quick solution to the supply disruptions appear to be fading. Yesterday was day 1 of the ND crop tour. HRS yield estimates averaged 46 bpa, below the 50 bpa from YA. The tour ends on Thursday when they will issue their production forecast for the state. The USDA is forecasting an average yield of 58 bpa, just below the 2024 record yield of 59 bpa.
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