Written Commentary
MORNING AG OUTLOOK
Prices have turned lower across the Ag space this AM after 2-sided trade overnight. This afternoon’s CFTC data will likely show another record long position by money managers in soybean meal. Energy prices are lower as wire services are reporting China has urged Iran to rein in Houthi rebel activities who’s attacks that have interfered with Saudi Arabia oil shipments through the Red Sea. Spot WTI crude oil is down $.40 per barrel at $101.50 while RBOB is down $.07 per gallon with HO $.01 lower. US weather has been rinse and repeat all week with heavy rain across the N. Midwest slowing crop maturation and delaying early harvest progress. Hot and dry across the S. Midwest, beneficial for harvest activities. This pattern looks to hold into the middle of next week. Week 2 of the outlook has above normal temperatures across the nation’s midsection with normal to below normal precipitation in the east, above normal precip in the west. Above normal temperatures across all of Argentina and Brazil. Scattered rains in Buenos Aires and N. Argentina while in Brazil, heavy rains across the south. Hot/dry in W. Europe with scattered showers in the East. Improved prospects for rain in Ukraine. The US $$ is moderately higher stretching out to a fresh 7-week high. US equity markets are mixed.
Corn:
Dec-26 futures are down $.01 at $5.29 ½ in 2-sided trade. Prices have held within last Friday’s range (USDA report day) all week. Corn bulls remain hopeful the Trump/Xi summit next week will result in China’s purchase of US corn. Crop ratings in France fell to another record low at only 23% G/E, down from 26% LW and well below the 62% YA. As of Monday, harvest had reached 27% vs. only 5% pace from YA. The BAGE left their 25/26 Argentine production forecast unchanged at 64 mmt, vs. USDA 63 mmt est. They report 26/27 plantings have reached 11%. This afternoon’s COF report is expected to show feedlots held 11.279 mil. head of cattle as of Sept. 1st, up 1.8% from YA. Placements in Aug-26 are expected to be down 3.2% from YA while marketings off 3.9%. Prices remain range bound with fresh bullish news lacking.
Soybeans:
Nov-26 beans are down $.11 ½ at $13.08 ½ in 2-sided trade overnight. Oct-26 meal is down $5.70 at $363 while holding within yesterday’s range. Oct-26 oil is down 33 points at 68.35 after trading to a 3-week low overnight. Crush margins backed up $.04 at $2.53 ½ bu. Chinese demand, slower acreage expansion in Brazil along with weather threats from a the “super El Nino” provide underlying support to the soybean complex. Record speculative length may limit further price appreciation in the short term. The trade remains hopeful that US/China will drop reciprocal tariffs at next week’s Trump/Xi summit in Washington. I’d estimate Chinese purchases are between 13-13.5 mmt. China’s Sinograin is expected to auction off another 543k mt of soybeans out of Govt. storage on Sept. 22nd. Yesterday’s EPA data showed Aug-26 D4 RIN generation at only 693 mil., down 13% from July-26 while falling below the pace needed to reach the EPA mandates. D4 RINS have leveled off near $2.10, well below the summer peak at just over $2.50.
Wheat:
Prices range from $.01 to $.03 lower in 2-sided trade overnight. CGO Dec-26 is down $.02 at $7.25, KC Dec-26 is $.01 ½ lower at $7.93, while Dec-26 MIAX is $.03 lower at $7.49 ½. Better prospects for rain in the US plains has weighed on wheat this week. US winter wheat acres in drought fell 2% this week to 57%. Spring wheat and durum acres in drought both down 1% to 56% and 39% respectively. US exports are down 31% from YA vs. the USDA forecast of down 15%. We’ll need to see sales pick up soon or the USDA will have no choice but to lower their export forecast. While sales to Pakistan have yet to be confirmed, yesterday wire services reported they asked participants to match the lowest offers in their 750k mt tender. Those offers are between $348.80 and $353/mt CF depending on the port of entry. Russia claims their Arctic port in Murmansk will start handling grain in Oct-26 as they continue to reroute exports away from the Black Sea.
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