Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag space in 2 sided trade ahead of today’s USDA Stocks & Acreage data. Spot WTI crude oil prices continue to claw their way back toward the highs from earlier in the month nervously monitoring developments in the Middle East. While Pres Trump maintains the US and its allies are close to making a deal with Iran to end the hostilities, more US troops arrived in the region this past weekend with more on the way. The President has also stated he’d consider ending the war without the reopening of the Straits of Hormuz. Spot crude oil has settled back to near unchanged at $103 per barrel. Spot RBOB is down $.01 after making new contract highs overnight while spot HO is down $.03. Wave of precipitation are expected across the central Midwest this week with 2”-3” common that include E. KS, OK and TX. Lighter amounts for the N. Plains, WCB and SE. Parts of the far SW plains continue to miss out. In Argentina, rains this week will again favor BA and surrounding provinces with some isolated flooding possible. Dry and above normal temperatures elsewhere will benefit harvest activities. Scattered rains for the interior south and RGDS in Brazil to provide modest relief from recent dryness. Heavier rains in far north and NE growing areas while mostly dry for the WC region. The US $$ is moderately lower while US stocks indices point to a 1% higher open.
Corn:
May-26 is down $.01 ¼ at $4.54 ½ while Dec-26 is $.02 lower at $4.82, both slipping to a 2 week low. The Reuters poll shows analysts expect Mch. 1st stocks at 9.104 bil bu up from 8.147 YA. We are just below that at 9.074 bil. Estimates range from 8.575 – 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. The end of March USDA reports has been supportive for corn in recent years closing higher the past 5, and 65% of the years since 2000. US corn inspections to date at 1.826 bil are up 36% from YA vs. the USDA forecast of up 15.5%. Week 2 of the weather outlook shows normal to above normal temperatures with mixed precipitation across the Midwest, generally favorable for early planting progress.
Soybeans:
May-26 beans are up $.02 ¼ at $11.62 while Nov-26 beans are $.01 higher at $11.45. May-26 meal is up $1.60 at $316.50 holding support overnight at its 100-day MA. May-26 oil is steady in 2 sided trade. Yesterday spot board crush margins jumped another dime to $2.86 bu., the highest since Oct-22, while bean oil PV surged to a new all-time high at 52.1%. Later today we’ll also get updated green diesel production, capacity and feedstocks usage data from the EIA. In the first 3 months of the 25/26 MY bean oil usage for biofuel production averaged only 932 mil. lbs. month. Usage will need to reach 1.334 bil lbs. per month over the next 9 months to reach the USDA reduced usage est. of 14 bil lbs. for 25/26 MY. Usage will need to reach 1.44 bil. Lbs. per month in the 26/27 MY to reach the USDA projected use of 17.3 bil lbs. The Reuters poll shows analysts expected Mch 1st stocks at 2.067 bil bu up from 1.911 YA. Estimates range from 1.880 – 2.125 bil. We are near the high end of the range at 2.116 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.
Wheat:
Prices range from steady to $.02 higher. CGO May-26 is up $.01 ½ at $6.08 ½ while KC May-26 is up $.01 ¾ at $6.28. The Reuters poll shows analysts expected Mch 1st stocks at 1.310 bil bu up from 1.237 YA. We are at 1.323 bil with the range of est. at 1.289 – 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. Crop ratings in KS fell another 6% to 40% G/E compared to 49% YA. In TX ratings slipped 2% to only 14% G/E vs. 26% YA. In other states OK down 1% to 13% G/E, CO down 10% to 14% G/E, MT up 10% to 28%, NE down 9% to only 9% G/E while SD plunged 18% to 31% G/E.
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