Written Commentary
MORNING AG OUTLOOK
Mixed trade overnight as Ag markets remain abuzz from yesterday’s social media post from Pres Trump suggesting that after his phone conversation with Chinese leader Xi that China would consider upping their 25/26 MY US soybean purchases to 20 mmt from the current 12 mmt. He also reminded they are on the hook for 25 mmt for the 26/27 MY which current sit at zero. Cash markets are doing what they can to prevent additional Chinese purchases with spot US Gulf offers rising $.15 bu. while Brazil FOB offers falling $.20 bu. taking their differential out to $1.10 per bu. For non-Govt owned trading houses the differential is even wider when you considers China’s 10% reciprocal tariff on US imports. Current pricing dynamics will shift all non-Chinese buyers to cheaper SA supplies. A lot building up to Pres. Trump’s visit to China in April. So much for Z45 guidelines dominating price action. Scattered rains are providing temporary relief in EC Argentina. More is needed to improve crop prospects. Wetter conditions in NC Brazil may slow soybean harvest and 2nd corn plantings. Dry across much the central Midwest into early next week. Moisture towards the end of the 7 day outlook to favor the GL region and ECB. Virtually no precipitation for the US plains. Gradual warming across the Central US with above normal temperatures thru week 2 of the outlook. Spot crude is down $1.30 a barrel. US $$$ is moderately higher trading at a 2 week high. US equity markets have turned lower.
Corn:
Mch-26 is up $.00 ½ at $4.30 while holding within yesterday’s range. No specific mention of China buying US corn. Prices remain rangebound between $4.15-$4.40. Yesterday’s EIA report showed ethanol production last week at 281 mil. gallons was the lowest in nearly 2 years impacted by the frigid Midwest temperatures. USDA Feb-26 WASDE report next Tues. Lowered FOB offers from Argentina will start cutting into US exports. Today’s export sales are expected to range between 32-80 mil. bu.
Soybeans:
Mch-26 beans are up $.09 holding just above $11.00 and within yesterday’s range. While trading to a fresh 5 ½ month high overnight, Mch-26 oil failed to trade above $.56 lb falling back to 55.33 down 33. Mch-26 meal is up $4.50 at $300.70. While it may not make economic sense for China to buy more US beans, they did but 12 mmt Nov thru Jan at prices above what they could have secured from Brazil. Price volatility to remain high leading up to EPA decision on RVO’s and SRE’s in March and Trump’s visit to China in April. Addition Chinese buying, or lack thereof, along with price differentials between US and SA to drive prices. Heavy speculative buying in beans yesterday with O.I surging 16.5k contracts. Oil O.I. was up 6k while down 6k in meal. Exports are expected to range from 15-55 mil. bu. for beans, 0-25k tons of oil and 250-500k tons of meal.
Wheat:
Prices are steady, within a penny of unchanged in 2 sided trade overnight. Wheat prices not impacted by Pres. Trump’s Truth Social post. CGO Mch-26 at $5.27 remains stuck between its 50 and 100 day MA. KC Mch-26 held MA support at $5.26 ½. MIAX Mch-26 hovering just above its contract low at $5.60 ½. Both the 6-10 and 8-14 day outlooks look for above normal precipitation. Export sales are expected to range from 10-20 mil. bu.
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