Ags Mixed Trade Awaiting USDA Updates

MORNING AG OUTLOOK

Mixed trade across the Ag space this AM awaiting USDA production and WASDE updates at 11 AM CST.  Energy prices are lower while holding within yesterday’s ranges.  Spot WTI crude oil is down $.70 per barrel at $90.80, spot RBOB is down $.03 per gallon while HO is $.10 lower.  Hurricane Isaias is expected to make landfall near the Florida/Alabama border tonight as a Category 2 storm.  Damaging winds and coastal flooding are expected while minimal impact on Gulf export operations.  Harvest activity in the SE and ECB will be delayed while crop damage is expected to be limited to cotton in AL/GA.  A fast-moving system bought heavier than expected rains across central IA overnight as it moves into NW IL this AM.  Otherwise, favorable harvest conditions in the central and WCB into early next week.  Widespread rain returns to the central Midwest and N. Plains the 2^nd half of next week.  The 6-10 day outlook shows above normal temperatures and precipitation across much of the nation’s midsection.  Cooler than normal temperatures across Argentina and S. Brazil.  Rain will continue to favor the interior south of Brazil with isolated flooding possible.  A good mix of rain and sunshine for much of Argentina and WC Brazil, favorable for planting.  The US $$ is slightly higher while US stock indices are higher.

Corn: 

Dec-26 is unchanged at $5.00 ¼ while holding within yesterday’s range.  Support below the market is at $4.88 with resistance at this week’s high at $5.09 ¾.  Open interest jumped 8k contracts.  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 continue to lag, down 34% from YA, vs. the current USDA forecast of down only 4%.  History shows that when the USDA lowers yields in both August and September, its pretty much a coin flip for October yield direction.  The BAGE reports corn plantings in Argentina have reached 30%, up from 22% last week.

Soybeans: 

Nov-26 beans are $.05 ½ higher at $12.93, Dec-26 meal is up $2.10 at $359.70 while Dec-26 oil is down 10 points at 67.82 lb.  Crush margins are steady at $2.46 ½ 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.  Chinese purchases have slowed since late Sept-26 which we estimate are very close to 15 mmt.  YTD commitments are up 80% YOY vs. the USDA forecast of up 11%.  Recall a year ago Chinese purchases were zippo.  US Gulf FOB soybean offers remain $.10-$.20 below Brazilian offers through the end of the year.  In early 2027 Brazilian offers are $.80-$.90 below US.  Soybean O.I. plunged 33k contracts yesterday, which was day 1 of the Goldman roll.  Meal O.I. was down 7k while oil was up 1.4k

Wheat: 

Prices are little changed this AM in 2-sided trade.  CGO Dec-26 is unchanged at $6.83 ¼, Dec-26 KC is $.00 ¼ lower at $7.36, while Dec-26 MIAX is $.01 ½ lower at $7.04 ½.  Support for Dec-26 CGO is at its 100-day MA at $6.76 ½, support for KC is at $7.29.  Little to no response from NATO following reports Russia struck vessels in the Black Sea off coastal waters of Bulgaria and Romania this week.  Open interest was down a couple of hundred contracts in CGO futures while down 1.1k in KC.  The Rueter’s poll shows traders expect 2026/27 US wheat stocks to rise only 4 mil. bu. to 721 mil. vs. our estimate of 735 mil. as I look for the USDA to start lowering exports.  Russia’s Ag. Minister expect they will export 1.5 mmt of grain through Baltic ports in Oct-26 despite Lithuania’s effort to prohibit the transport of Russian grain through their country.  US winter wheat areas in drought dropped 4% to 53% while spring wheat in drought fell 9% to 39%.

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