Written Commentary
MORNING AG OUTLOOK
Mostly lower trade across the Ag space this AM as Pres Trump and Chinese leader Xi end their May summit. Lack of clarity for additional Chinese demand for US agricultural goods continues to weigh on market sentiment. Energy prices spiked overnight after Pres Trump stated China had agreed to purchase oil from the US. In a Fox News interview the Pres said, “we’re going to start sending Chinese ships to Texas and Louisiana and to Alaska.” Time will tell whether this materializes or just to leverage Iran into opening up the Straits of Hormuz, something both US and China agree needs to happen. Trump Admin. official’s downplayed China’s insistence that the US scale back its military and financial support of Taiwan. WTI June-26 crude oil is up $3.30 barrel near $104.45. Spot RBOB is up $.04 per gallon while HO is $.11 higher. Scattered, light showers across the N. Midwest the past 24 hours, otherwise mostly dry. US weather leans bearish for the Ag. space with moderate to heavy rainfall across the Midwest over the next week. Lighter totals in the SW plains and SE. Week 2 of the outlook maintains above normal temperatures with normal to above normal precipitation. Cool/dry conditions in Argentina remain favorable for harvest activities. In Brazil rains to favor the interior south while hot/dry for the central and NE regions. The US $$ is moderately higher, stretching out to a 3-week high. US stock indices are lower coming off fresh record closes for the Nasdaq and S&P 500.
Corn:
July-26 is down $.03 ½ at $4.64 while Dec-26 is $.03 lower at $4.88 ¼. Support for July-26 is at this month’s low at $4.61. Support for Dec-26 is at its 50-day MA at $4.86 ¾. While we had speculative traders selling 27k contracts yesterday, reducing their net long position to 350k contracts, O.I. was down 12k contracts. The BAGE held their Argentine production forecast at 61 mmt, just above the USDA est. of 59 mmt, while harvest has reached 32%. US corn acres in drought rose 1% LW to 26%. Near-term sentiment remains bearish. No date has been set for the US Senate to vote on E-15.
Soybeans:
July-26 beans are $.07 lower at $11.85 ½ while Nov-26 is down $.08 ½ at $11.75. July-26 meal is down $2.50 at $330 while July-26 oil is up 10 points at 73.75. While US officials maintain China is committed to buying 25 mmt of US soybeans over the next 3 MY’s, lack of clarity and timing when they will start has tipped market sentiment lower. So far inside trade for July-26 beans. Nov-26 has so far held above this month’s low at $11.64 ¾. Inside trade for July-26 oil. Crush margins are up $.03 at $3.52 bu. NOPA data later this AM is expected to show members processed 214 mil. bu. in April-26, down from 226 mil. in March, however up from 190 mil. in April-25. Oil stocks are expected to have fallen 4% to 1.95 bil lbs. The BAGE held Argentine production forecast steady at 48.6 mmt, vs. the USDA est. of 48 mmt. Harvest jumped 24% to 58%, well above the historical average. With yesterday’s speculative selling not captured in today’s CFTC-COT update, look for another record net long position by MM’s in the soybean complex.
Wheat:
Prices range from $.04 to $.09 lower. CGO July-26 is down $.08 at $6.50, KC July-26 is down $.07 ½ at $6.97 ¾, while MIAX July-26 is $.04 lower at $6.98 ½. KC July-26 has a chart gap from Tues. open between $6.87 ¾ – $6.90 ¾. The Kansas crop tour final yield est. was 38.9 bpa, below the 5-year Ave. of 45.5 and the lowest since 2023. Their production forecast at 218 mil. bu. would imply their harvested acres at roughly 5.6 mil. acres. The USDA pegged Kansas yields at 37 bpa with production at 214.6 mil. bu. The USDA harvested acreage est. at 5.8 mil. represents 83% of the planted acres, below the historical average of 92%. The BAGE pegs 26/27 Argentine production at 21.3 mmt, while well below 25/26 at 29.5 mmt, it’s in line with the USDA est. of 21 mmt. US WW acres in drought rose another 1% the past week to 71%.
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