A Sea of Red Across The Ag Space Led By Beans

MORNING AG OUTLOOK

A sea of red across the Ag space this AM led by sharply lower soybean prices.  Under the newly negotiated US-China Board of Trade agreement reciprocal tariffs will be reduced with the trade truce between the world’s 2 largest economies also being extended.  While this will allow China to import US feed grains, meat, dairy and soybean products at reduced tariffs, the list didn’t include soybeans.  This will continue to limit China’s purchase of US soybeans to Govt. controlled entities COFCO and Sinograin.  Soybeans and soybean meal have both traded below Friday’s low.  Weekend rain continued to impact the WCB and S. Plains while the C. Midwest and ECB experienced mostly favorable harvest conditions.  That pattern looks to hold into midweek before precipitation shifts east.  Widespread moderate to heavy rain will continue to slow process in the WCB until dryer conditions settle in late this week.  Moderate to heavy rains across Buenos Aires and far S. Brazil.  Scattered rains across most South American growing areas this week with normal to below normal temperatures.  Energy prices are higher as Pres. Trump rejected Iran peace proposal while suggesting US military strikes would extend beyond the November mid-terms.  Nov-26 WTI crude oil is up $2.60 per barrel at $95.00, RBOB futures are $.02 higher while HO is up $.17 per gallon.  The US $$ is moderately higher while holding within Friday’s range.  US stock indices are lower.

Corn: 

Dec-26 futures are down $.05 at $5.23 while holding within Friday’s range.  While prospects for US sales to China is encouraging, weaker soybean prices and favorable harvest conditions for 2/3^rd’s of the Midwest is weighing on prices.  Despite money managers selling just over 12k contracts last week, they hold near record length in corn.  The Reuters survey shows analysts expect Sept. 1^st US corn stocks at 1.918 bil. bu. vs. 1.551 bil. YA and down slightly the USDA Sept-26 WASDE estimate of 1.922 bil.

Soybeans:

Nov-26 beans are down $.24 at $12.95, Oct-26 meal is down $7.50 at $366.40 while Oct-26 oil is down 16 points at 67.10.  Next support for Nov-26 beans is at this month’s low of $12.90 ¼.  Crush margins are up $.02 at $2.47.  Sinograin auction off only 192k mt of soybeans from state reserves, roughly 37% of the volume offered.  MM’s were net buyers of 20k contracts of soybeans, extending their long position to 265k, within 1k of their record long from 2 weeks ago.   MM’s also bought nearly 7k contracts of soybean meal, extending their record long positions to 192k.  They also extended their record net long position across the soybean complex by nearly 13k to 554k.  The Reuters survey shows traders expect Sept. 1^st US bean stocks at 324 mil. bu. vs. 325 mil. YA which was also the USDA Sept-26 WASDE estimate for 25/26 ending stocks.  Analyst Patria Agronegocios places Brazil’s soybean plantings at just over 4%, in line with YA.

Wheat: 

Prices range from $.07-$.12 lower.  CGO Dec-26 is down $.07 ¼ at $6.96 while holding within Friday’s range.  Dec-26 KC is off $.12 at $7.50, also holding within Friday’s range.  Dec-26 MIAX is down $.14 at $7.06 while violating support at its 100-day MA at $7.09.  Turkey submitted a proposal to Russia late last week to allow Black Sea shipments however so far, no peace talks are being considered.  Russia claimed to have struck 2 bulk vessels and data centers in Kyiv overnight.  A Reuter’s report states that 80% of Russia’s Black Sea grain export terminals could be operational once a peace agreement is reached having not sustained significant damage.  The Reuters survey shows traders expect all US wheat production at 1.524 bil. bu., down from 1.531 bil. in Aug-26.  Sept. 1^st stocks are expected at 1.872 bil., well below the 2.134 bil. YA.

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