Ag Prices Recover From Yesterday’s Lower Trade

MORNING AG OUTLOOK

Mostly higher trade across the Ag space this AM as prices recover from yesterday’s lower trade.  Speculative traders have been sellers the past 3 sessions after massive buying on Monday.  Perhaps a bit of a relief bounce ahead of the weekend partially driven by higher energy prices.  The standoff in the Persian Gulf continues with the Straits of Hormuz remaining mostly closed despite Pres. Trump earlier in the week describing peace talks as being in their “final stages”.  WTI July-26 crude oil is up $1.25 a barrel near $97.60.  Spot RBOB is up $.07 per gallon while HO is $.11 higher.  Markets continue to monitor signs of demand, or lack thereof, from China.  Higher production forecasts in Argentina also weighed on corn and soybean prices yesterday.  Heavy rains continue to impact E. TX and portions of the Gulf coast and SE Midwest.  Another system brought scattered showers to the WCB including areas in W. KS and NE.  Precipitation over the next week will continue to favor the Gulf coast and S. Midwest where some areas may experience isolated flooding.  Lighter amounts for northern plains with only scattered rains for the Great Lakes region.  In Brazil still hot and dry for the central and NE regions while only scattered rains in the interior south.  Much of Europe is also turning warmer and drier. The US $$ is slightly higher while holding within yesterday’s range.  US stock indices are slightly higher.

Corn: 

July-26 and Dec-26 are both $.02 higher at $4.64 ¼ and $4.87 respectively.  Both holding within yesterday’s range.  This afternoon’s COF report is expected to show cattle inventories as of May 1st at 11.536 mil. head, up 1.4% from YA.  Placements are expected to rise 3% with marketings down 9.5%.  Prospects for sales to China have raised the price floor for corn while favorable weather limits the upside.  Near-term look for July-26 to hold in a $4.50-$4.90 range. The BAGE raised their Argentine production forecast 3 mmt to 64 mmt, once again forging a gap with the USDA forecast of 59 mmt.  Harvest advanced 1% to 33% near its historical average.

Soybeans:

July-26 and Nov-26 beans are both $.05 higher at $11.99 ¼ and $11.91 ¾ respectively.  July meal is up $.60 at $329 while July-26 oil is up 48 points at 74.35.  July-26 beans once again bounced off its 50-day MA overnight while holding below yesterday’s high.  Inside trade for Nov-26 beans and July-26 oil.  Crush margins are mostly steady at $3.41 ½ bu. With crush margins holding near record highs to fuel expanding biofuel production along with the potential for Chinese demand to return to pre-tariff levels has raised the price floor while favorable weather limits the upside.  Near term look for July to hold between $11.75-$12.25.  The BAGE raised their Argentine production forecast 1.5 mmt to 50.1 mmt, above the USDA est. of 48 mmt.  Harvest continues to roll, up another 17% in the past week to 75% complete.  Biodiesel blending credits (D4 RIN’s) totaled 690 mil. in April, up 5.7% from March and are the highest since Dec-24, suggesting another boost in green diesel production and likely higher bean oil usage.  Production and feedstocks usage data from March is to be released by the EIA next Friday.

Wheat: 

Prices range from $.02 lower to $.02 higher.  CGO July-26 is down $.02 at $6.45 ½, KC July-26 is also off $.02 at $6.85, while MIAX July-26 is up $.01 ½ at $6.91 ½.  Support for CGO July-26 is at $6.31 ½ while support for KC July-26 is at this month’s low of $6.64.  US wheat is least likely to benefit from the Chinese trade agreement with US prices largely uncompetitive in the global marketplace.  Starting in June, Argentina will cut their export tax on wheat shipments to 5.5% from 7.5%.  Russia’s Ag Ministry stated their port capacity will grow to 100 mmt annually by 2030, up from the current 85 mmt.

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