Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space this AM. Markets had a lot to sort thru yesterday with export sales, crush data, SA production updates along with biofuel headlines. Reports the EPA will finalize 2026 biofuel blending quotas by early March inspired large speculative buying in bean oil. Prices seem to have stalled out after reaching fresh 4 month highs overnight. Indications are the EPA is considering a bio-based diesel blending quota between 5.2 to 5.6 bil. gallons. While well above the 3.35 bil. from 2025, it is would imply a potential reduction from previous proposed total of 5.6 bil. It appears the EPA will cancel plans to limit tax credits for imported biofuels and feedstock. They are also working to determine how much, if any of the SRE will be reallocated to large refineries. The biofuel industry would like to see 100%, while big oil would prefer zero. Spot crude oil is has bounced back $.60 per barrel. SA remains mostly favorable. In the US cooler than normal temperatures across the central and northern US Midwest thru the end of January. Limited rainfall for winter wheat areas for the next week to 10 days. The US $$ is slightly lower after reaching a 6 week high yesterday. US stock indices steady to higher.
Corn:
Mch-26 is up $.02 near $4.22, recovering after yesterday’s weak close despite large flash sale announcements. BAGE reports Argentine plantings have reached 92% with 93% of the crop in normal to good condition. Earlier in the day the Rosario GE raised their Argentine production forecast 1 mmt to a record 62 mmt, well above the USDA forecast of 53 mmt. Conab’s Brazilian production est. at 139 mmt, also well above the USDA forecast of 131 mmt. As usual big discrepancies between USDA est. and forecasts coming from SA. Record ethanol production this week raises hopes for higher domestic usage. Exports remain on pace to meet or exceed the USDA est. of 3.2 bil. bu.
Soybeans:
Inside trade for Mch-26 beans as it holds near $10.55 up $.02. After reaching a fresh 3 month low overnight Mch-26 meal is up $1 near $290. After trading to a 4 month high overnight Mch-26 oil has backed off trading slightly lower near 52.80. NOPA data would suggest census crush at 230 mil. bu. which would bring YTD crush to 892 mil. bu. up 7.4% above YA, vs. the revised USDA forecast of up 5%. Oil stocks held by NOPA member rose to a 19 month high at 1.642 bil. lbs. however were slightly below expectations. While Conab lowered their Brazilian production forecast 1 mmt to 176.1 mmt, AgroConsults raised their forecast 6% to 182.2 mmt. BAGE reports Argentine plantings have reached 94% with 61% G/E down 64% LW.
Wheat:
Prices range for $.02-$.07 higher with KC and CGO the upside leaders. Inside trade for Mch-26 CGO trading just below yesterday’s high of $5.17 ¼. Overall holding in a $5.00-$5.25 range. Mch-26 KC is bumping up against MA resistance near $5.27. Saudi Arabia is seeking offers for their 595k mt tender for milling wheat for April/May shipments. Results are expected to be announced on Monday. US winter wheat acres in drought slipped 1% in the past week to 41%.
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