Feed Grains Up, Soybean Complex Mixed

MORNING AG OUTLOOK

Mixed trade across the Ag space this AM with feed grain prices higher while the soybean complex is mixed.  Energy prices are sharply lower on reports Pres. Trump wants to negotiate with Iran to end the war just ahead of tomorrow’s mid-term elections.  Iran has suggested they were prepared to reopen the Straits of Hormuz within 2 days if the US would agree to end the war on all fronts.  Spot WTI crude oil is down $4.45 per barrel at $99.65.  Spot RBOB is down $.16 per gallon while HO is off $.17.  Much of the Midwest saw some precipitation over the weekend.  Widespread showers across the nation’s midsection this week will slow the remaining harvest.  Week 2 of the outlook shows above normal temperatures and below normal precipitation.  Weekend rains in South America were heaviest in EC Brazil while moderate shower activity for WC Argentina.  Precipitation this week will continue to favor the interior South of Brazil while scattered shower activity for Argentina.  Mostly dry for WC Brazil, however better prospects for rain in week 2 of the outlook.  The US $$ is moderately lower while US stock indices are higher.

Corn: 

Dec-26 is up $.03 ¼ at $4.51, rebounding after trading to a 4-month low.  Friday’s CFTC report showed Money managers selling just over 90k contracts cutting their long position to only 56k contracts, the smallest in 4 months.  The European Commission lowered EU corn production another 1.3 mmt to 47 mmt however held their import forecast unchanged at 25 mmt.  That compares to the USDA forecast of 48 mmt on production with imports at 23.5 mmt.  I look for US harvest to reach 75% as of yesterday.  Bulls remain hopeful US corn will be on China’s wish list however the path of least resistance remains lower until US demand improves and/or a more threatening SA forecast.

Soybeans: 

Jan-27 beans are steady at $12.34 ½, Dec-26 meal is up $1.20 at $325.80 while Dec-26 oil is down 56 points at 65.34.  Support for Jan-27 beans is at LW’s low at $12.26 ½ with resistance at its 100-day MA at $12.48 ½.  Dec-26 meal fell to a fresh 2-month low before recovering.  Across the soybean complex MM’s were net sellers of 70k contracts reducing their combined long position to 411.5k contracts, the lowest in 2 months.  Crush margins slipped another $.03 to $2.14 bu., the lowest in 9 months.  I estimate Chinese purchases are approaching 19 mmt.  Sinograin is expected to auction off another 400k mt of soybeans tomorrow.  Their last auction they sold only 172k mt, roughly a third of the total volume offered.  Soybean plantings in Mato Grosso, Brazil’s largest producing state, have reached 89% as of Friday, above the 76% pace YA and the 5-year Ave. of 78.5%.  I look for US harvest to have reached 90%.  Census crush in Sept-26, due for release after today’s close is expected to have fallen to 201 mil. bu. down just over 4% from Aug-26 and below 205 mil. bu. processed in Sept-25.  Bean oil stocks are expected to fall to 1.534 bil. lbs. down nearly 10% from Aug-26 and well below the 1.747 bil. in Sept-25.

Wheat: 

Prices are steady to $.05 higher across the 3 classes.  CGO Dec-26 is $.02 ½ higher at $6.06, Dec-26 KC is up $.04 ¾ at $6.49 while Dec-26 MIAX is up $.01 ¼ at $6.25.  MM’s were net sellers of 40k contracts combined across the 3 classes of wheat extending their short position to 80.5k contracts, the largest in 8 months.  The MM short position in CGO has swelled to 75k contracts, the largest in 5 months.  Prices will be very sensitive to any hint of Chinese interest.  IKAR reports the export price for Russian wheat at Baltic Sea ports ended last week at $260/mt, down $4 from the previous week.  The also raised their Oct-26 export forecast to just above 3 mmt, while suggesting Nov-26 could be slightly higher.  The European Commission lowered EU wheat production another .5 mmt to 123.7 mmt.  Still no firm date set for tri-lateral peace talks between US, Russia and Ukraine.

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