Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag space this AM with fresh news limited. Soybean oil is once again the leader to the upside anticipating bullish news from the Trump Admin. at Friday’s “Agricultural Event” at the White House while also drawing support from higher energy prices. After Iran’s state media reported they rejected the US peace proposal, they countered with a 5 point plan that would give Tehran control over the Straits of Hormuz. In a joint statement Gulf countries condemned Iran’s “criminal strikes” on their energy infrastructure added they were prepared to defend themselves moving forward. Spot WTI crude oil is up $4.00 per barrel near $94.35, near the midpoint of Monday’s huge range. Spot RBOB is up $.06 per gallon with HO $.25 higher. On Friday the EPA is expected to announce their long awaited policies on US biofuel blending quota’s and SRE’s in Washington. Yesterday the EPA announced they will issue a waiver to allow the sale of E-15 during the summer months to help offset higher gasoline prices. Next Tues. brings USDA Mch 1st stocks data along with prospective plantings. Heavy rains are expected for the Great Lakes region and the northern half of the ECB over the next week. Scattered precipitation at best for the WCB and N. Plains. Dry for the SW plains. Extended forecasts continue to suggest above normal temperatures and rain for much of the Midwest and plain states. In Argentina, healthy rains for Buenos Aires while mostly dry elsewhere over the next week. In Brazil rains to favor the SC region and far north. The US $$ is slightly higher while US stock indices are down .65%-.90%.
Corn:
May-26 is fractionally lower at $4.67 while Dec-26 is unchanged at $4.93 ¼. The Reuters poll shows analysts expected Mch 1st stocks at 9.036 bil bu. up from 8.147 YA. We are just above that at 9.074 bil. Estimates range from 8.420 – 9.378 bil. Corn acres are expected to slip to 94.371 bil down from 98.788 YA. We are at 93.75 mil with the range of guesses 92.60 – 96 mil. Ethanol production LW rebounded to 328 mil. gallons, up from 321 mil. the previous week and up 6% YOY. Production was just above the pace needed to reach the USDA forecast of 5.6 bil. Export sales are expected to range between 28-32 mil. bu.
Soybeans:
May-26 and Nov-26 beans are fractionally higher at $11.72 ½ and $11.50 ½ respectively. Inside trade for Nov-26 while May-26 jumped out to a new high for the week. May-26 meal is down $2.50 at $317.30 while oil is up 56 points at 67.66. We estimate MM are holding a record long position in soybean oil at 146k contracts. President Trumps trip to Beijing being rescheduled for mid-May helped fuel speculative buying yesterday. The Reuters poll shows analysts expected Mch 1st stocks at 2.063 bil bu up from 1.911 YA. We are just above that at 2.116 bil. Estimates range from 1.880 – 2.125 bil. Bean acres are expected to jump to 85.55 bil up from 81.215 YA. We are at 85.5 mil. with the range of guesses 84.25–86.5 mil. Export sales are likely to range from 8-22 mil. bu. of beans, 150-400k tons of meal and -15k – 25k tons of oil.
Wheat:
Prices range from $.03 lower with CGO to $.01 higher in KC. CGO May-26 is down $.02 ½ at $5.95 ¼ while KC May-26 is up $.00 ¾ at $6.18 ½, both hovering near session lows. Look for wheat acres in drought to expand in this week’s updated drought monitor. Rains in the extended forecast will ultimately need to find the rain gauge in order for crop prospects to improve. Traders await the results of the Algerian tender. Export sales are expected to range from 5-22 mil. bu. The Reuters poll shows analysts expected Mch 1st stocks at 1.295 bil bu up from 1.237 YA. We are at 1.323 bil with the range of est. at 1.050 – 1.334 bil. All wheat acres are expected to slip to 44.786 down from 45.328 YA. Winter wheat acres are expected to fall to 32.73 mil. vs. 33.153 YA. For WW we are at 32.6 mil. with a range of est. 31.9 to 33.4 mil.
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