Written Commentary
MORNING AG OUTLOOK
Soybean Complex:
The soy complex continues to have a bullish tilt with soy product strength supporting beans this week, another new contract high overnight in bean oil and a 10-week high in meal. Crush margins are moving higher and the Indonesian trade deal signed last week includes a significant increase in US meal purchases from only 216,257 tonnes in 2025 to 3.8 million tonnes planned for 2026. US meal exports for the marketing year are already at a 6-year high as Argentina’s crushers are having issues with bean availability, which is slowing their crush rates. Argentina’s bean harvest could begin as early as late March. In overnight news, the Brazilian currency hit another new contract high versus the US dollar, but the wide price differential between US and Brazil values still heavily favors Brazil. Dr Cordonnier lowered his Brazil estimate 1 million tonnes to 178 million citing poor quality and lower yields in northern Mato Grosso and dry conditions in Rio Grande do Sul, where 50% of the crop still has pods to fill.
Corn:
Sideways action continues in the corn following the failed upside breakout on Monday and the technical trend remains neutral. March liquidation is ongoing with open interest down another 37,000 contracts yesterday. It’s too early for US weather to be a significant issue but Argentina showers are anticipated to remain spotty over the next 2 weeks and although recent rains have served to stabilize crops, deterioration may continue in early March. Heavy storms earlier this week damaged up to 1 million acres of corn and beans in Santa Fe and Cordoba areas. Brazil rains are moving into the northern areas and soil moisture needs will increase in March for the safrinha crop, but the current extended outlook does not look overly favorable for a significant soil moisture recharge. Dr Cordonnier lowered his Brazil crop 1 million tonnes to 135 million due to a larger percentage of the safrinha crop being planted after the ideal window, which closes this week. US exports remain a significant bright spot with US September through January sales to Asia nearly doubling from the previous year and sales to the EU this marketing year up 90% from a year ago. US ethanol exports in 2025 hit a record high and today’s weekly production number is expected at 1.132 million barrels per day with stocks anticipated at 25.927 million.
Wheat:
Wheat continues to slip lower this week as recent fund short covering has given way to March liquidation. But the other significant bearish force this week is the potential increase in precipitation in the 6 – 15 day outlook in the southern Plains and a much more active pattern of storms anticipated in early March, which is why the Kansas City contract has been under more pressure. In addition, cold risks in the Black Sea and Eastern Europe have subsided. Technically, May Chicago hit 50% retracement resistance to the June highs of last year on Monday’s high. Algeria bought wheat yesterday, but the total size of the purchase has not yet been announced but it will likely be at least several hundred thousand tonnes. Israel says they are planning to boost their US wheat purchases in a bid for tariff relief and Indonesia says they are already beginning to buy US wheat, having committed to do so in last week’s trade deal.
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