Soybeans The Downside Leader

MORNING AG OUTLOOK

Mixed trade across the Ag space overnight with most contracts experiencing 2-sided trade.  Soybeans are the downside leader pressured by favorable weather along with lower energy prices.  Chicago wheat is the upside leader as heavy rains across the S. Midwest may threaten the SRW crop just as harvest starts to accelerate.  Spot WTI crude oil has fallen to a fresh 2-month low as markets await for the official peace signing ceremony this Friday in Switzerland.  VP Vance stated on CNBC’s “Squawk Box” that the Strait of Hormuz would “be open in a toll-free way for the long term.”  Spot WTI crude oil is down $2.30 a barrel near $78.45 with next support at the April low of $77.22.  Spot RBOB is down $.03 per gallon while HO is $.08 lower.  Speculators were light to moderate buyers across the Ag. space yesterday following record selling reported in last Friday’s CFTC-COT data.  Mostly dry across the nation’s midsection yesterday with only light showers across the NC Midwest while heavy rains across the Gulf coast region.  Heavy rain will continue to impact the Gulf coast this week while moderate to heavy rains for much of the central and ECB.  Lighter amounts for the far WCB.  Rains across central and the interior South of Brazil will continue to slow corn development and harvest.  Rains in Argentina is limited to the NE.  Western Europe remains in a hot/dry pattern.  The US $$ is moderately lower in 2-sided trade.  US stock indices are slightly higher.

Corn: 

Prices are mixed and within $.01 of unchanged.  July-26 is down $.00 ½ at $4.15 while Dec-26 is steady at $4.42 with both so far holding within yesterday’s range.  Support for July-26 is at $4.05, a gap on the weekly chart from last Sept-26. Corn ratings improved 1% to 68% G/E, in line with expectations as there was a 1% shift from fair to good.  Ratings improved in 8 states while declining in 10.  Overall ratings are historically average for mid-June.  Emergence at 94% is in line with YA and the 5-year Ave. of 93%

Soybeans: 

July-26 beans are $.08 lower at $11.11 ¼ while Nov-26 beans are down $.06 ½ at $11.28 ¼.  July-26 meal is down $1 at $301 while July-26 oil is down 26 points at 74.11.  Crush margins rebounded $.01 to $3.64 ½ bu. with bean oil PV slipping to 55.1%.  Still on the lookout for fresh demand interest from China while US FOB offers have become more competitive with Brazil.  NOPA members processed just under 209 mil. bu. in May-26, coming in below expectations of 216 mil.  Implied census crush at 215 mil. bu. would bring YTD totals to 1.999 bil bu up 8.3% from YA, vs. the revised USDA forecast of up 8.4%.  Crush needs to average 217 mil. bu. per month June through Aug. to reach the USDA.  Bean oil stocks slipped to 1.735 bil lbs., well below expectations and a 5-month low.  Plantings advanced 3% to 95% vs. the YA pace and 5-year Ave. of 93%.  Emergence at 88% is above the 83% from YA and 5-year Ave. of 82%.  Ratings improved 1% to 66% G/E.  The ratings index improved to 81.8, slightly above the historical average.  Oddly ratings improved in only 6 states, declined in 11, while holding steady in 1.  Ratings rose 7% in both IN and SD, while declining 8% in NE and down 7% in both LA and NC.

Wheat: 

Prices range from steady to $.08 higher.  CGO July-26 is up $.07 ½ at $5.97 ¼, KC July-26 is steady at $6.40 while MIAX July-26 is also steady at $6.16.  Resistance for CGO July-26 is at LW’s high at $6.00 ¼.  Resistance for KC July-26 is at $6.45.  Winter wheat ratings rose 2% to 27% G/E vs. expectations of no change.  95% of the crop is headed vs. 92% YA and the 5-year Ave. of 91%.  Harvest advanced more than expected to 25%, vs. only 9% YA and 5-year Ave. of 13%.   There was a 1% decline in the crop rated poor/VP, down to 45%.  Overall ratings are still the lowest in 20 years for mid-June.  My model is forecasting an Ave. yield rose to 47 bpa, up from 46.8 bpa last week.  Spring wheat ratings improved another 3% to 55% G/E, slightly better than expected and are just below the 57% G/E from YA.  Emergence at 95% is above YA at 88% and the 5-year Ave. of 89%.

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