Written Commentary
MORNING AG OUTLOOK
A sea of red across the Ag space this AM as US voters head to the polls for midterm elections. Odds that Democrats take a majority control of the House are over 90% while odds they take over the Senate have grown to just over 75% according to Kalshi betting platform. Energy prices rebounded after a US attack on Iran’s Qeshm Island fueled fears of renewed escalation. Spot WTI crude oil is up $.80 per barrel at $97.25. Spot RBOB is up $.05 per gallon while HO is $.10 higher. Usage data after the close was slightly below expectations while harvest progress was in line. Widespread rains across the WCB and N. Midwest will slow the remaining harvest in the short-term. Showers will slide east bringing widespread rain to the central and ECB by the end of the week. The 6-10 day forecast shows above normal temperatures and below normal precipitation which should enable harvest to wrap up in a timely manner. Precipitation this week will continue to favor the interior South of Brazil while scattered shower activity for Argentina. Temperatures to hold at below normal readings in these areas. Above normal temperatures with scattered rain for WC Brazil. The US $$ is moderately higher while holding within yesterday’s range. US stock indices are mixed.
Corn:
Dec-26 is down $.03 ¼ at $4.45 reaching a fresh a 4-month low. Disappointing trade action yesterday considering the USDA flash sale of over just over 1.7 mmt of corn to Mexico, the 3rd largest sale ever to our neighbors to the south. There was 438 mil. bu. of corn used to produce ethanol in Sept-26, at the low end of expectations. Usage will need to average 474 mil. bu. per month to reach the current USDA usage forecast of 5.650 bil. bu. Harvest progress at 74% was in line with expectations and just below the 5-year Ave. of 77%. Using USDA Oct-26 production estimates there is nearly 2.2 bil. bu. left to harvest in NE, SD, MN and IA. 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 $.01 higher at $12.17 ¾, Dec-26 meal is down $1.20 at $318.40 while Dec-26 oil is down 33 points at 64.75. Jan-27 beans have so far held within yesterday’s range. Dec-26 meal has fallen to a fresh 2 ½ month low. Dec-26 oil is holding just above LW’s low at 64.50. Yesterday’s net selling across the complex took the combined MM long position down to 373k, still historically large however below the recent record of 558k. Speculative traders continue to shed length as SA forecasts remain non-threatening. Crush margins slipped another $.07 ½ to $2.07 ½ bu., the lowest in 9 months. I estimate Chinese purchases are near 19 mmt. Sept-26 crush at 199 mil. bu. was slightly below expectations. To reach the USDA forecast of 2.780 bil. bu., crush will need to average 235 mil. bu. per month Oct-26 through Aug-27. Bean oil stocks at 1.458 bil. lbs. were below expectations of 1.534 bil. Harvest progress advanced 9% to 88% complete, vs. the 5-year Ave. of 84%, also in line with expectations.
Wheat:
Prices have turned $.02-$.06 lower across the 3 classes. CGO Dec-26 is $.04 ¼ lower at $6.02 ¼, Dec-26 KC is off $.06 at $6.40 while Dec-26 MIAX is $.02 ½ lower at $6.23 ¼. Prices will remain sensitive to Chinese demand interest, or lack thereof. With Russia able to ship just over 3 mmt per month and 1 mmt from Ukraine would put the current USDA export forecasts at 40 and 12.5 mmt respectively close to reality. Still no firm date set for tri-lateral peace talks between US, Russia and Ukraine. US WW plantings at 83% are just below the 5-year Ave. of 84%. Emergence at 65% matches the 5-year Ave. Crop ratings at 44% G/E were in line with our expectations, however well below the Ave. estimate in the Reuters poll at 50%. Rain in the S. Plains should benefit conditions before dormancy. Only 2 participants in Jordan’s 120k mt wheat tender with no sales announced yet.
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