A Green Screen Across The Ag Space This AM

MORNING AG OUTLOOK

A green screen across the Ag space this AM ahead of the USDA quarterly stocks and annual Small Grain Summary at 11 AM CST.  Traders expect minimal change to US wheat production along with 2025/26 corn and soybean ending stocks.  The soybean complex firmed yesterday as speculative traders returned as modest buyers fueled by reports China was seeking offers for US soybeans at the Gulf and off the PNW.  Energy prices are higher with little fresh news from the Persian Gulf.  WTI Nov-26 crude is up $1.20 a barrel at $90.60, RBOB is up $.07 per gallon with HO $.23 higher.  Moderate to heavy rains continue to pull from the desert SW across the Central and S. Plains and into the NC Midwest.  That pattern looks to hold for a few more days as remnants of Hurricane Polo brings addition precipitation across the nation’s midsection.   Harvest progress will remain slow in the WCB until dryer conditions settle in this weekend. Week 2 of the outlook shows below normal precipitation across the Midwest.  Heavy rains in S. Brazil have led to localized flooding.  Precipitation over the next 7 days will continue to favor S. Brazil with scattered showers in the WC region along with central Argentina.   Seasonally warm for nearly all of Europe with rains bringing drought relief to Spain and France.  The US $$ is moderately lower while holding within yesterday’s range.  US stock indices are mixed and little changed.

Corn: 

Dec-26 is up $.02 ½ at $5.24 ½ while holding within yesterday’s range.  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.  I’ve got stocks at 1.905 bil bu while expecting last year’s crop to be cut 36 mil. bu. to 16.985 bil.  Today’s EIA data is expected to show ethanol production slipped to 296 mil. gallons last week, down from 302 mil the previous week.  The EU Commission lower corn production to 48.3 mmt, down another 3.6% from their August est. vs. the USDA forecast of 50.6 mmt.

Soybeans: 

Nov-26 beans are up $.05 ½ at $13.03 ¼, Dec-26 meal is up $2.40 at $361.40 while Dec-26 oil is up 20 points at 68.56.  Inside trade for both Dec-26 meal and oil.  Bean prices will continue to be sensitive the pace of Chinese soy purchases which we estimate to be at 14 mmt.  Crush margins are steady at $2.45 bu.  Delayed harvest in the WCB continues to keep crusher bids firm with soybean meal supplies scarce.  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.  Speculative traders remain near record long in the soybean complex however with Chinese purchases there is little room for lower US yields to slip much below the current USDA est. of 52.8 bpa or risk tighter stocks and even higher prices.  EIA data on bio and renewable diesel production, capacity and feedstock usage from July-26 due out today, while census crush data from Aug-26 due out after the close tomorrow.

Wheat: 

Prices are $.04-$.06 higher ahead of today’s USDA production data.  CGO Dec-26 is up $.05 at $6.97 ¾, stopping just shy of trading $7.00 overnight.  Dec-26 KC is also $.05 higher at $7.48 while Dec-26 MIAX is $.04 ¾ higher at $7.04.  The Reuters survey shows traders expect all US wheat production at 1.524 bil bu., down from 1.531 bil in Aug-26.  The Ave. Spring wheat est. is 471 mil. bu., down from 474 in August.  Our estimate is the lowest in the range at 460 mil.  Sept. 1^st stocks are expected at 1.872 bil, well below the 2.134 bil YA.  Our estimate is 1.830 bil bu.  Rains in the plains will continue to help ease drought conditions.  Ukraine’s largest farm union, UAC expects wheat shipments will decline even further in Oct/Nov as recently harvested corn will take up a larger share of the logistics capacity.

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