Bean Oil Prices Jump to Six-Week Highs

MORNING AG OUTLOOK

Mixed trade across the Ag space overnight with soybean oil the leader to the upside.  Bean oil prices jumped out to a 6-week high after the EPA announced SRE’s for 2025 totaling 1.76 bil. RIN’s would be fully reallocated to larger refineries in future years.  No surprises in the USDA crop progress and condition updates.  Census soybean crush and corn grind for ethanol production data is scheduled for release after today’s close.  Energy prices are higher with spot crude oil reaching a 3-month high while both spot RBOB and HO have reached fresh contract highs.  Oct-26 WTI crude is up $1.90 a barrel at 87.65 while RBOB is up $.02 per gallon with HO $.09 higher.  Light, scattered rains in the Great Lakes region as well as the far WCB, otherwise mostly dry across the nation’s midsection the past 24 hours.  Rains to favor the N. Midwest and Great Lakes region this week with the South remaining hot/dry, pushing crops toward maturity to the detriment of yield.  Cooler than normal temperatures for S. Brazil and much of Argentina the next 7 days.  Above normal temperatures to hold in WC Brazil.  Scattered rains for the NE and interior south of Brazil.  Much of central and W. Europe returning to a hot/dry pattern while drought conditions in S. Ukraine deepen.  The US $$ is moderately higher while US stock indicies are down.

Corn: 

Dec-26 futures are $.03 lower at $5.35 after carving out a new contract high overnight.  We estimate MM’s are holding a record large, long position at just over 445k contracts.  O.I. increased 15.5k contracts in yesterday’s trade.  Corn ratings held steady at 57% G/E, however there was a 1% shift from excellent to good.  Composite ratings improved in 5 states, declined in 10 while holding steady in 3.  Conditions fell to a new low for the growing season while holding below the historical average.  92% of the crop is in the dough stage, 62% is dented while 13% of the crop is mature, all at or ahead of the 5-year Ave.  Updated ratings would suggest an average US yield of 179.6 bpa with production at 15.914 bil. bu., down 39 mil. bu. from last week and 99 mil. below the USDA forecast of 16.013 bil.  Expectations for lower EU and US production with prospects for higher usage (including China) tighten the global stocks outlook.

Soybeans: 

Nov-26 beans are $.08 higher at $12.96 trading to a new contract high for a 5th consecutive session while trading above $13 for the first time.  Oct-26 meal is down $.40 at $338 in 2-sided trade.  Oct-26 oil gapped higher and is currently 121 points higher at 72.04.  In the process it also filled a gap from late July.  Crush margins are up $.05 ½ at $2.42 bu. with bean oil PV recovering to 51.7%.  D4 RIN values surged to nearly $2.10, up from their August low just under $1.80.  July-26 crush is expected to reach 220 mil. bu. up 1% from June, while up from 205 mil. bu. in July-25.  Bean oil stocks are expected to 10.4% from June-26 to 1.878 bil. lbs.  Crop ratings fell 2% to 58% G/E, in line with expectations.  Composite ratings fell to the lowest of the crop cycle while holding just below the historical average.  Ratings improved in 7 states, declining in 8 while holding steady in 3.  95% of the crop is setting pods vs. YA and 5-year Ave. of 93%.  13% of the crop is dropping leaves vs. 10% from YA and 5-year Ave. of 9%.  Updated ratings suggest an average US yield of 52.6 bpa with production at 4.515 bil bu., down 15 mil. from last week while just below the USDA forecast of 4.519 bil.   We’ve got the combined long position in the soybean complex at nearly 480k contracts, vs. the all-time high from May-26 at nearly 502k.  Poor US finishing weather combined with Chinese buying provide little wiggle room for US yields to slip from the current USDA forecast of 52.7 bpa.

Wheat: 

Prices range from $.01 lower to $.03 higher.  CGO Dec-26 is up $.02 at $7.76, KC Dec-26 is $.01 lower at $8.37 while Dec-26 MIAX is $.01 higher at $7.64.  Given recent rains, ABARES raised their 2026/27 Australian wheat production forecast 3 mmt to 29.9 mmt, still 17% below last year’s harvest however.  The USDA forecast for 2026/27 is 28 mmt.  Kazakhstan wheat exports in 2025/26 are expected to have jumped 16% YOY to 8.3 mmt.  Russian has shifted requests for up to 5 mmt of wheat exports thru the Baltic Sea, up from only 1 mmt last year and 2.5 mmt 2 years ago.  Ukraine has harvested 32 mmt of grain so far, or 58% of the planted area.  Just over 5 mil. HA of wheat has been harvested with volume reaching 24.76 mmt producing an average yield of 4.92 mt/per HA.  US spring harvest advanced 15% to 77% complete, above expectations and above the 69% pace from YA and the 5-year Ave. of 68%.

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