Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space this AM as prices draw support from larger than expected declines in US crop ratings while harvest also lags expectations. Soybean oil is the outlier to the downside pressured by lower energy prices. Spot WTI crude oil is down $2.25 per barrel at $87.20, while falling to a 1-month low. Spot RBOB is off $.04 per gallon while HO is down $.15. Speculative activity was quiet yesterday as we had MM’s small sellers in soybean meal while light buyers everywhere else. USDA will provide updated production and balance sheet data on Friday. Dry for much of the Midwest this week which should enable harvest progress to get back on track. A tropical disturbance is expected to bring heavy rain to the SE this weekend before bringing rain to the ECB by early next week. The 6-10 day outlook shows above normal temperatures and precipitation across the entire Midwest. In SA precipitation will continue to favor the interior south of Brazil and Argentina where temperatures are expected to hold at below normal readings. Hot with limited rain in Mato Grosso and N. MGDS. Isolated flooding potential for Parana and Sao Paulo. Europe will continue to see scattered showers bringing some relief from this summer’s drought. The US $$ is moderately lower while holding within yesterday’s range. US stock indices are higher.
Corn:
Dec-26 is $.04 ½ higher at $5.01 ¾ while holding within yesterday’s range. Support below the market is at $4.88 with near term resistance at the 50-day MA at $5.08. Crop ratings slipped 3% to 54% G/E. Composite ratings fell to a new seasonal low while holding just above ratings from 2023. Ratings fell 8% in NE, 3% in IA and 2% in IL, MO, and SD, areas that saw the heaviest concentration of rain last week. Ratings improved 9% in CO, 3% in PA, and 2% in MI and ND. 83% of the crop is mature matching the 5-year Ave. Harvest advanced only 5% to 23%, the slowest pace in 7 years while below the 5-year Ave. of 27%. IA is 7% harvested vs. Ave. of 20% while NE is 15% harvested vs. 24% Ave. Updated ratings suggest an average US yield of 178.0 bpa with production at 15.758 bil. bu. down 18 mil. from last week and below the USDA forecast at 15.80 bil. bu. The Bloomberg survey shows traders expect US corn production will slip 66 mil. bu. to 15.734 bil. with yields falling .7 bpa to 177.8 bpa. Ending stocks are expected to increase 127 mil. bu. to 1.694 bil.
Soybeans:
Nov-26 beans are up $.09 at $12.89 ¾ holding within yesterday’s range. Dec-26 meal is up $5 at $352.10 while Dec-26 oil is down 13 points to 69.22. Crush margins are up $.01 to $2.46 ½. Bu. With China on Golden Holiday until Thursday, demand interest will likely be quiet however this USDA did announce a flash sale of 104k mt to an unknown buyer yesterday. Crop ratings slipped 1% to 57% G/E. Composite ratings fell to a new seasonal low while still just above the historical average. Ratings rose 5% in OH, 4% in ND and 1% in IN and WI. Ratings fell 9% in NE, 6% in MI, and 4% in IA and KY. Harvest advanced only 8% to 25%, also the slowest in 6 years while behind the 5-year Ave. of 33%. Updated ratings suggest an average US yield of 52.3 bpa with production at 4.493 bil. bu. down 16 mil. bu. from last week and below the USDA forecast of 4.535 bil. The Bloomberg survey shows traders expect US soybean production will increase 3 mil. bu. to 4.538 bil. with yields up .1 bpa to 52.9 bpa. Ending stocks are expected to slip 1 mil. bu. to 309 mil. Abiove reports Brazil’s crush capacity rose 13% in 2026 to 86.4 mmt annually. They forecast total crush in 2026 will reach 63.5 mmt. The USDA crush forecast for the 2026/27 MY is 65 mmt.
Wheat:
Prices are $.05-$.09 higher in 2-sided trade. CGO Dec-26 is up $.07 at $6.99, Dec-26 KC is $.09 higher at $7.51, while Dec-26 MIAX is up $.05 ½ higher at $7.14. Although the Russia/Ukraine war continues to intensify, Russia was able to export 2.4 mmt of wheat in Sept-26, according to IKAR, with a record 1 mmt moving through Baltic ports. Total shipments July-26 through Sept-26 were 6.4 mmt vs. 11.3 mmt YA. IKAR also reports the export price for wheat ended last week at $266/mt FOB, down $1 from the previous week. Ukraine’s agricultural exports through the Danube River ports totaled 1.145 mmt in September, up from 716k in August. US winter wheat plantings advanced 9% to 36%, below the 5-year Ave. of 46%. 16% of the crop has emerged vs. the 5-year Ave. of 20%. The Bloomberg survey shows trader expect US 2026/27 ending stocks will rise 5 mil. bu. to 722 mil.
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