Written Commentary
MORNING AG OUTLOOK
Nearly all green on the screen this AM as agricultural prices look to end the week on a positive note. The US $$ is little changed in 2-sided trade ahead of the US July payrolls data. Non-farm payrolls are expected to have expanded by 83k last month, up from +57k in June while the unemployment rate is expected to hold at 4.2%. US equity markets are steady to higher. Energy prices have turned lower in 2-sided trade. Yesterday’s strength was driven by Houthis attacks on Saudi Arabia while talks between Iran and Oman to reopen the Straits of Hormuz appear to have stalled. Iran is seeking fees of 5-7% of a cargo value to safely navigate the waterway. Spot WTI crude is down $.50 a barrel near $76.80. Spot RBOB is steady while HO is down $.01 per gallon. US weather remains mostly favorable. The past 24 hours saw scattered, but in some cases heavy rain stretching from E. KS across C. MO and into the ECB. Heavy rains are expected across the Central and ECB over the next 7 days, while lighter and more scattered in the WCB. Much lighter amounts in the N. plains while hot/dry in the SW plains. Week 2 of the outlook looks cooler and damp across N. half of the Midwest, while warm with normal to above normal precip. in the S. half. Cooler than normal temperatures across Argentina and S. Brazil with precipitation limited to S. Brazil. Warm and dry across C. and Northern growing regions of Brazil. Hot for all of Europe with only scattered rain in S. France and the Alps.
Corn:
Sept-26 and Dec-26 are $.03 higher at $4.42 and $4.65 respectively with both showing little net change for the week. Dec-26 seems to be building solid support just below $4.60. The BAGE reports Argentine harvest has reached only 74% vs. the Ave. in the mid-80’s. Ukraine’s Ag. Ministry expects a significant reduction in grain shipments in the 26/27 MY due to continued Russian missile attacks. Corn exports are expected to reach only 14 mmt, vs. the USDA est. of 23 mmt. While ports remain open, shipping companies are reluctant to allow vessels to enter the region. France’s Ag. Ministry is forecasting total grain production at 46.1 mmt, down 5.2% from YA due to this year’s drought. Corn production is expected at only 9 mmt, down 35% YOY. Efforts to expand corn demand through higher ethanol production by allowing the year-round sale of E-15 failed to pass through the Senate Ag. Committee yesterday. Committee chairman John Boozman, Rep. Senator from Ark., maintains he is committed to advancing the measure.
Soybeans:
Sept-26 and Nov-26 soybeans are both $.02 ½ higher at $11.62 ½ and $11.80 ½ respectively. Nov-26 continues to build support near its 100-day MA at $11.71, Sept-26 meal is down $.40 at $311.40 while Sept-26 oil is up 10 points at 67.85. Crush margins are down $.02 ½ at $2.67 ½ bu. Cash sources suggest China purchased another 10 cargoes of US soybeans yesterday after purchasing 10-15 on Wednesday as they continue to work toward reaching their 25 mmt commitment. Chinese leader Xi is expected to visit Washington DC in 7 weeks. Look for larger flash sales in coming days vs. only a 122k sale to China announced yesterday. Anec reports they expect Brazil will ship 9.74 mmt of soybeans in Aug-26, up 20% YOY. China imported 11.48 mmt of soybeans from all sources in July-26, up 1.6% YOY. YTD purchases at 61.5 mmt are up just under 1% from YA. China’s Sinograin announced they will auction off another 516k mt of soybeans on Aug. 12th, their 3rd such auction as they look to free up storage ahead of US arrivals. I’ll have expectations for next week’s USDA production and WASDE reports later today.
Wheat:
Prices range from steady to $.05 higher. CGO Sept-26 is $.03 ½ higher at $6.34 ¾, KC Sept-26 is $.05 ¼ higher at $7.05 while MIAX Sept-26 is up $.01 at $6.72. Last month’s surge to 2-3 year highs was driven by logistical issues, not by supply issues, something that a peace agreement could quickly solve. So far global importers have not chased higher alternative sources, certainly not the US. Ukraine’s Ag. Ministry fears their 26/27 wheat exports could fall to 8.3 mmt, less than half of their earlier est. of 17.6 mmt and below the USDA forecast of 14.5 mmt. Ukraine has requested 220 mil. Euro’s from the EU to help support small and medium sized farmers.
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