Surging KC Wheat Provided Lift Across Ags

MORNING AG OUTLOOK

Surging KC wheat futures have provided a lift across most of the Ag space overnight.  There are expanded limits of $.70 bu. today for both KC and CGO futures following yesterday’s limit up trade.  Reports of crop damage for this years winter crop in Kansas confirm the USDA’s low production forecast yesterday.  Energy prices are mixed as the standoff between the US and Iran continues.  While the “fragile” ceasefire is holding, the Straits of Hormuz remains closed.  WTI June-26 crude oil is steady near $102.20 in 2-sided trade.  Spot RBOB is down $.02 per gallon while HO is $.04 lower.  The markets focus will likely shift to Pres. Trump’s trip to Beijing where Chinese purchases of US Ag. goods is expected to be just 1 of several topics discussed by leaders from the world’s 2 largest economies.  Outside of spotty, light rain in the GL region it was dry across the nation’s midsection yesterday.  Rainfall over the next week is expected to be heaviest across the C Midwest.   Lighter amounts for the far western and eastern corn belt along with N Plains.  Only scattered rains for the SW plains and SE.  Above normal temperatures in the WCB will shift across the rest of the Midwest by the end of the week. Favorable harvest conditions for Argentina for at least the next 10 days.  In Brazil good rains across the interior south with lighter amounts in WC Mato Grosso.  Hot and dry for the central and EC regions.  The US $$$ is moderately higher, trading to a new high for the month.  US stock indices are mixed.

Corn: 

July-26 and Dec-26 are both $.01 lower at $4.79 and $5.01 respectively.  Resistance for July-26 is at this month’s high of $4.87 ½.  Resistance for Dec-26 is at $5.05 ¾.  Today’s EIA report is expected to show ethanol production recover to 306 mil. gallons LW, up from 299 mil. the previous week.  China’s purchase of US corn will likely be a topic of discussion between Pres. Trump and Chinese leader Xi.  The USDA did up their 26/27 corn export forecast 50 mil. bu. to 3.150 bil despite also raising their SA production forecast 10 mmt.  The US House is expected to vote this week on legislation to allow the year-round sale of E-15.  Surging wheat prices have provided support to corn as wheat will quickly work its way out of feed rations trading $2 over corn futures.

Soybeans: 

July-26 beans are $.02 ¼ higher at $12.29 while Nov-26 is up $.02 ½ at $12.07 ½.  July-26 meal is up $2.50 at $330.90 while July-26 oil is down 25 points at 75.13.  Resistance for July beans is at the March high near $12.50.  Inside trade for July-26 and Nov-26 beans.  As expected, the USDA raised crush while lowering exports for both old and new crop.  New crop ending stocks at 310 mil. bu. was at the very low end of expectations, roughly 55 mil. below expectations.  With the release of the RVO mandates and SRE’s at the end of March the USDA reversed course by raising bean oil usage for green diesel production by 200 mil. lbs. on old crop up to 14.2 bil. and up 500 mil. lbs. to 17.8 bil. for the 26/27 MY.  The revised 26/27 crush forecast at 2.750 bil. bu. will push industry capacity.  Crush margins are $.03 higher this AM at $3.27 ½ bu.

Wheat: 

Prices range from $.02 lower in CGO to up $.12 in KC.  CGO July-26 is down $.02 at $6.77, KC July-26 is $.12 higher at $7.43 ¼, while MIAX July-26 is up $.05 at $7.29.  Day 1 of the Kansas wheat tour estimated average yields of 38.3 bpa, vs. 50.5 bpa YA.  The USDA pegged the average yield in Kansas this year at 37 bpa, down from 51 bpa last year.  The USDA est. 83% of the WW acres in Kansas will be harvested for grain vs. the historical average of 92%. In their first look at global production in 2026 the USDA is forecasting lower production for 7 of the largest exporters ranging from down 4.5% in Ukraine to 25% lower in Argentina.  The USDA all wheat production forecast was the lowest since 1965 while the HRW est. at 515 mil. bu. is the lowest since 1957.

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