Widespread Rains Next Week To Slow Plantings

MORNING AG OUTLOOK

Mixed trade across the Ag space to begin the last trading day of the week.  Energy prices have turned lower in 2-sided trade overnight.  No significant change with the standoff over the Straits of Hormuz.  While the fragile US/Iran ceasefire is holding, the US Naval blockade on Iranian ports continues.  Vessel traffic through the narrow passageway is limited with peace talks uncertain.  The Israeli/Lebanon ceasefire has been extended for 3 weeks enabling peace negotiations to continue.  June-26 WTI crude oil is down $1.50 at $94.35.  Spot RBOB is down $.06 per gallon while HO is off $.04.  Widespread rain across the nation’s midsection over the next week will slow planting operations, however help ease drought conditions across the Delta and WCB.  Week 2 of the outlook shows cooler than normal temperatures with normal precipitation across much of the Midwest.  Healthy rains across NE Argentina the past 24 hours while dry to the south.  Limited rainfall over the next week will support harvest operations.  Rains in Brazil will favor the interior south while much of the central and northern growing areas turn hot/dry.  The US $$ index is moderately lower while holding within yesterday’s range.  US stock indices are steady to up 1.0%.

Corn:

July-26 and Dec-26 are both fractionally higher at $4.64 ¾ and $4.84 ¼ respectively.  Both traded to fresh 3-week highs overnight.  July-26 remains rangebound between $4.50-$4.80.  The BAGE held their Argentine production forecast steady at 61 mmt, well above the USDA est. of 52 mmt.  Harvest progressed only 2% in the past week to 26.5%.  US exports remain strong, up 28% YTD vs. the USDA forecast of up 15.5%.

Soybeans: 

July-26 beans are up $.01 at $11.75 ¾ while Nov-26 is $.01 lower at $11.54.  July-26 meal appears stuck between its 50-day MA resistance at $318.90 and 100-day MA support at $314.80.  July-26 oil is steady at 71.05.  July-26 rejected trade above $12 yesterday while settling back towards the mid-point of its $11.55-$12 range.  Spot board crush margins rebounded $.04 yesterday to $3.33 ½ bu. while bean oil PV held near all-time highs at 52.8%.  Speculative traders were moderate sellers across the soybean complex the past few sessions.  Despite this look for the CFTC to print another record large, long position held by MM’s in soybean oil, and a combined record long position across the complex.  The markets attention will start shifting to Pres. Trump’s meeting in Beijing with Chinese leader Xi next month.  Without additional Chinese purchases the USDA export forecast will likely be lowered again, which will likely again be offset by higher crush.  The BAGE increased their Argentine production forecast .1 mmt to 48.6 mmt, just above the USDA forecast of 48 mmt, while harvest has reached 10%.  At least 18 vessels are now being held up outside a key Argentinian ports as a trucker strike has blocked supply channels to the key export hub.

Wheat: 

Prices range from $.02-$.08 lower, unable to extend yesterday’s price surge.  CGO July-26 is down $.02 ¼ at $6.18, KC July-26 is $.08 lower at $6.71 ¼, while MIAX July-26 is down $.04 at $6.87 1/2.  KC jumped out to a fresh 22 month high before pulling back.  IKAR lowered their Russian production forecast 1 mmt to 90 mmt, while also lowering their export forecast 1 mmt to 46.5 mmt.  Saudi Arabia is tendering for 710k mt of milling wheat for Jun-Aug shipment.  Results of the tender are expected on Monday.  Speculators can’t decide if they want to go long or short CGO wheat, so they are doing neither.  MM long position in today’s CFTC update could be the largest in 3 years.  KC’s premium to CGO jumped out to a new high overnight just above $.63 before pulling back.

Interested in more futures markets?  Explore our Market Dashboards here.