Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag space this AM ahead of the 3-day Labor Day weekend. Most contracts experienced 2-sided trade overnight while holding within yesterday’s ranges. Yesterday’s early plunge in wheat prices were inspired by hopes peace talks between Russia/Ukraine could develop, only to see prices recover on reports of fresh attacks on each other’s infrastructure. This afternoon’s CFTC-COT report will likely show record length by money managers in corn, KC wheat and possibly soybeans. Energy prices are lower while fresh news from the Persian Gulf is scarce. Oct-26 WTI crude is down $.85 per barrel at 90.45, spot RBOB is down $.04 a gallon while HO is off $.07. The most recent round of storms brought heavy rain to the N. Midwest and Great Lakes region the past 24 hours, while remnants from Tropical Storm Edouard brought flooding to areas of E. Texas. Rains will continue to favor the N. Midwest, Great Lakes region and the Gulf Coast with the central and southern Midwest remaining hot/dry, pushing crops toward maturity. Much of Argentina and Brazil are shifting into a normal to below normal temperature pattern. Dry for much of Argentina while increased shower activity for central and the interior south of Brazil. Europe braces for its next heatwave. Dry in the west with scattered showers in central and E. Europe. Ukraine continues to hold in a dryer than normal pattern. The US $$ is has rebounded ahead of today’s US jobs report. The US economy is expected to have added 53k jobs in August, vs. a loss of 23k in July. US equity markets are steady to higher.
Corn:
Dec-26 futures are $.01 lower at $5.39 ¾. The BAGE held their Argentine 2025/26 production forecast steady at 64 mmt, vs. USDA 63 mmt, while reporting harvest has reached 93%. New crop plantings are underway with 1.5% of the 8.4 mil. HA seeded. Yesterday, IMEA forecast Mato Grosso’s 2nd crop corn in 2026/27 would fall to 53.7 mmt in 2026/27, down 7.5% from YA as El Nino would likely cut into yields. Linn and Associates is forecasting US production at 15.768 bil. bu. with an average yield of 178 bpa. Their forecast is 245 mil. bu. the USDA est. in August. We’ll have our production and carryout est. on Tuesday, ahead of the USDA production and WASDE reports next Friday the 11th. US census exports through July-26 are 20% above YA, vs. the USDA forecast of up 18%. Expectations for lower US and EU production combined with potential higher demand has been the catalyst for prices reaching 3 year highs.
Soybeans:
Nov-26 beans are $.01 lower at $13.15. Oct-26 meal is down $1.10 at $347.50 while Oct-26 oil is off 70 points at 68.93. Bean oil continues to consolidate near its 50 & 100-day MA’s. Crush margins are off another $.08 at $2.28 ½ bu. We’ve got the combined long position in the soybean complex at just over 510k contracts, above the all-time high from May-26 at 502k. Linn and Associates sees US production at 4.459 bil. with a yield of 52 bpa vs. the USDA forecast at 4.519 bil. and yields at 52.7 bpa. The USDA old crop export forecast is looking 10-15 mil. bu. too low while new crop sales to China continue to stack up. I’d estimate China’s purchases are nearing 12 mmt and will likely be more than halfway to their 25 mmt pledge ahead of Xi visit to Washington in 3 weeks. Higher new crop demand would leave little wiggle room for US yields to fall from the current 52.7 bpa forecast, or risk sharply lower stocks and even higher prices.
Wheat:
Prices range from steady to $.03 higher. CGO Dec-26 is unchanged at $7.54 ¼, KC Dec-26 is $.02 higher at $8.17 ½ while Dec-26 MIAX is up $.02 ½ at $7.68. Asian buyers have been turning to Australia and Argentina in recent weeks to replace delayed cargoes from the Black Sea, often paying $50/mt CF more. Russian wheat exports in Sept-26 are expected to fall to 1.6-2.0 mmt, roughly have of the historical norm according to Rusagrotrans. Results from Saudi Arabia tender for 535k mt of wheat for Nov/Dec shipment is expected to be announced on Monday. The UN FAO lowered their global 2026 wheat production forecast to 810.7 mmt, well below the Aug-26 USDA est. of 819.3 mmt. US spring wheat area in drought deepened another 2% to 82%, while WW areas in drought increased 3% to 59%. Global prices will continue to be sensitive to potential peace talks from the Black Sea region.
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