Written Commentary
MORNING AG OUTLOOK
Mixed trade across the Ag. space ahead of this AM’s weekly export sales data and tomorrow’s USDA production and WASDE updates. Energy prices have turned sharply higher after Pres. Trump commented that making a deal with Iran “isn’t really something that I want to do,” stoking fears the US may be preparing for a “massive bombing” in the Middle East. Spot WTI crude oil up $4.00 per barrel at $92.30, spot RBOB is up $.12 per gallon while HO is $.18 higher. Isaias has reached hurricane status this AM and is expected to make landfall near the Florida/Alabama border Friday night or Sat. AM as a Category 2 storm. Damaging winds and coastal flooding are expected, however, only short-term and minimal impact on Gulf export operations. Harvest activity in the SE and ECB will be slowed while crop damage is expected to be limited to cotton in AL/GA. Favorable harvest conditions in the central and WCB are expected to extend into the middle of next week. Week 2 of the outlook shows above normal precipitation with normal to above normal temperatures across much of the nation’s midsection. In SA cooler than normal temperatures across nearly all of Argentina and S. Brazil. Rain will continue to favor the interior south of Brazil with isolated flooding possible. Scattered rains expected for much of Argentina and WC Brazil. The US $$ is moderately higher, while holding just below this month’s low. US stock indices are lower.
Corn:
Dec-26 is unchanged at $5.02 in 2-sided trade. Support below the market is at $4.88 with resistance at this week’s high at $5.09 ¾. Open interest jumped nearly 9k contracts yesterday. The Reuter’s poll shows analysts expect US production will slip to 15.721 bil. bu. with stocks at 1.670 bil., very much in line with our estimates of production at 15.710 bil. and stocks at 1.695 bil. Export sales are expected to range from 25-65 mil. bu. History shows that when the USDA lowers yields in both August and September, its pretty much a coin flip for October yield direction.
Soybeans:
Nov-26 beans are down $.03 at $12.94 ½ in 2-sided trade overnight. Dec-26 meal is down $2.50 at $363.30 while Dec-26 oil is up 32 points at $.68 lb. Crush margins improved $.02 ½ to $2.54 bu. The Reuter’s poll shows the Ave. production estimate at 4.534 bil. bu. with stocks at 305 mil. just above our expectations of production at 4.510 bil. and stocks at 290 mil. While Chinese purchases have slowed since late Sept-26, perhaps the return from Golden Week will start to change that. Purchases for the 2026/27 MY likely rest between 14-15 mmt. US Gulf FOB offers remain $.10-$.20 below Brazilian offers through the end of the year. By Jan-27 Brazilian offers are $.80-$.90 below US. Soybean O.I. was down 8.5k contracts while meal was up 5.8k and oil down 4.8k. Export sales are expected to range from 16-44 mil. bu. of soybeans, 150-600k tons of meal and 0-6k tons of oil.
Wheat:
Prices are little changed this AM in 2-sided trade. CGO Dec-26 is up $.00 ½ at $6.87, Dec-26 KC is $.01 higher at $7.39 ½, while Dec-26 MIAX is up $.00 ¾ at $7.11. Little to no response from NATO following reports Russia struck vessels in the Black Sea off coastal waters of Bulgaria and Romania this week. SovEcon lowered their Russian production forecast nearly 1% to 87.5 mmt, vs. the USDA est. of 88 mmt. Lithuania is reportedly planning to push the EU to ban Russian grain transit through the region to halt shipments through Baltic Sea ports. Open interest rose 2.7k contracts in CGO while up 2.4k in KC.
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