Written Commentary
CORN
Prices turned $.04-$.06 lower closing near session lows after reaching fresh 6-week highs overnight. Spreads also weakened. With 100+ degree heat this week limited to the northern and SW Plains, perhaps the market senses its impact on the corn crop may be limited. Lack of rain for the WCB is still problematic. Yesterday’s EIA data showed ethanol production slumped to 306 mil. gallons, down from 321 mil. the previous week and down 4% YOY. Production was the lowest in 10 weeks and below the pace needed to meet the USDA usage forecast for a 13th consecutive week. Exports at 25 mil. bu. (half old crop, half new crop) was well below expectations. Old crop sales were a MY low while YTD commitments reached 3.397 bil. bu., up 24% YOY vs. the USDA forecast up 16%. Commitments represent 102% of the USDA forecast, above the historical average of 96%. Pace analysis would suggest the USDA export forecast at 3.325 bil. is still at least 25-50 mil. bu. too low. New crop commitments have reached 270 mil. bu. a 5-year high while up 15% YOY. US corn acres in drought held steady at 19%.
SOYBEANS
Prices were mixed in 2-sided trade with beans off $.06-$.07, meal was $2-$4 higher while oil was 40-50 lower. Bean and oil spreads weakened while meal spreads firmed. Both Aug-26 and Nov-26 beans held below this week’s high on early strength. Aug-26 meal traded to a 6-week high. Aug-26 oil also held below this week’s high before drifting lower. Corn and soybean prices turned lower on neutral to bearish export data and an improving weather outlook. This week’s temperature surge across the N. Plains and central Midwest is expected to last through this weekend, however is well discounted in today’s market. Next weeks forecast for below normal temperatures with normal precipitation in the NC midwest and much of the ECB lean bearish for prices. Above normal temperatures continue to linger across much of the WCB with below normal precipitation. Crush margins jumped $.10 to $3.12 bu. with bean oil PV falling below 53%. Markets remain sensitive to China demand interest, or lack thereof. US Gulf FOB offers holding $.05-$.20 over Brazilian offers thru Nov. despite no flash sale announcements the past 3 days. Yesterday’s NOPA data was supportive as members crushed 214.3 mil. bu. of beans in June-26, 10 mil. above expectations. Implied census crush at 220 mil. bu. places YTD usage up 8.5% from YA, in line with the current USDA forecast. Oil stocks fell to an 8-month low at 1.5 bil. lbs. Stocks were down 13.5% from May and well below expectations, suggesting a surge in domestic usage. Soybean sales at 72 mil. (7 mil.– 25/26 MY, 65 mil.– 26/27) were in line with expectations. Old crop commitments are down 18% from YA vs. the revised USDA forecast of down 20%. 25/26 shipments to China have reached 12.2 mmt while new crop purchases of 1.056k mt took YTD commitments to 1.256 mmt (46 mil. bu.). There are another 2.325 mmt (85 mil. bu.) to unknown. New crop commitments spiked to 169 mil. bu., a 4-year high while up 94% YOY. Meal sales at 228k tons were at the low end of expectations. Old crop commitments are up 15% YOY vs. the revised USDA forecast of up 12%. Oil commitments slipped to 828 mil. lbs. down 65% vs. USDA forecast down 60%.
WHEAT
Price were mixed while closing within $.03 of unchanged. All 3 classes fell back after stretching out to their highest levels in nearly 2 months. CGO Sept-26 was down $.02 ¾ at $6.74 ¾, KC Sept-26 was $.03 ½ lower at $7.16 ½ while MIAX Sept was up $.02 at $6.85 ¼. Open interest from yesterday’s trade was up 8k in CGO and 6.5k in KC, suggesting not just speculative short covering driving prices but likely a combination of fresh speculative longs or end users locking in prices. Starting next week the variable storage rate for KC (HRW) futures drops to $.00165 per bu. per day. A German farm co-op forecasts their 2026 wheat production will fall 5.6% from YA to 42.7 mmt, a day after France’s Farm Ministry projected production down 4% YOY. Supply disruptions from the world’s largest exporter of wheat coupled with lower production in the US and EU will likely keep the path of least resistance higher with volatility elevated. Export sales at 9 mil. bu. were at the low end of expectations. YTD commitments are down 23% from YA vs. the USDA forecast of down 15%.
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