Mostly Lower Trade As Energy Prices Quieted

MORNING AG OUTLOOK

Mostly lower trade across the Ag space overnight in mostly 2 sided trade.  Energy prices have quieted for now with spot crude holding within yesterday’s range just below $75 per barrel.  The Trump Admin. is working to reopen passage thru the Straits of Hormuz stating the US would provide risk insurance for all maritime trade while also offering support from the US Navy to guarantee safe passage.  Speculators were active sellers across the Ag. space yesterday.  Open interest was mostly lower with corn down 14k, meal -3k, bean oil -1k, CGO wheat -2.5k, KC wheat -1k while soybeans rose 11k.  Markets nervously await meetings between US/China trade negotiators in Paris mid-month and Pres. Trump visit to Beijing late this month.  Dry conditions across nearly all of Brazil the past 24 hours is not expected to last with frequent rain activity the next week to 10 days.  The last 10-20% of soybean harvest across Mato Grosso likely to be a slow go.  Rains in NW Argentina while dry in the central and southern regions.  Corn harvest is just getting underway.  In the US heavy rains across C. IL and IN also pulled across S. OH the past 24 hours.  Rains over the next week will continue to pull from the SE plains across the central Midwest and ECB.  Lighter amounts for the WCB and N. plains.  The US $$ is moderately lower while holding within yesterday range.  US stock indices are mixed and little changed.

Corn: 

May-26 is down $.02 ¾ at $4.43 ¾ sitting at session lows.  New crop Dec-26 is down $.01 ½ at $4.69 ¾.  Today’s EIA report is expected to show ethanol production range between 326-338 mil. gallons, vs. 329 mil. the previous week.  I look for US ending stocks to rise 25 mil. bu. to 2.152 bil. in next week’s WASDE report on lower usage for ethanol production.  While exports continue to hold strong I see no change this month, holding at 3.30 bil. bu.  Feed/residual likely to hold steady as well with quarterly stocks data at month end.  For now spot May-26 has rejected trade above $4.50, next support at the 50 day MA at $4.41 ½.

Soybeans: 

May-26 beans are down $.01 ½ at $11.69 holding within yesterday’s range.  May-26 meal is steady while May-26 oil is down 35 at 62.47, also holding within yesterday’s range.  Nov-26 beans are down $.01 ½ at $11.30 holding within yesterday’s range after trading to nearly a 2 year high yesterday.  I find it highly unlikely we’ll see additional Chinese buying of US beans with Gulf FOB offers running $.80-$1.30 over Brazilian offers into the summer months.  That said however I expect no changes to the USDA export forecast of 1.575 bil. bu. Look for some shifting of bean oil demand away from biofuels into other domestic usage and/or higher stocks.  No big changes expected for SA production.

Wheat: 

Prices range from $.02 lower in MIAX to $.08 lower in CGO.  CGO May-26 is down $.07 ½ at $5.66 ½ with next support at $5.63 ½.  KC May-26 is down $.06 at $5.72 ¼ while holding within yesterday’s range.  Saw first deliveries against Mch-26 KC of 91 contracts.  MIAX May-26 is down $.02 ¼ at $6.11.  Week 2 of the outlook across the Central Midwest is indicating a return of below normal temperatures.  Stats Canada is out tomorrow with 2026 planting intentions.  Wheat acres are expected to slip to 26.4 mil., down from 26.9 YA.  The range of est. is 26 – 29.2 mil Russian grain shipments to Iran have stalled after the recent US/Israeli attacks.

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