Written Commentary
CORN
Prices were steady to $.02 lower in 2-sided trade. Spreads firmed. Both Sept-26 and Dec-26 traded into new highs for the week before pulling back. Corn usage for ethanol in May-26 jumped nearly 10% from the previous month to 472 mil. bu. This was above expectations and 6% above May-25. Through the first 9 months of the 25/26 MY corn usage has reached 4.127 bil. bu., up 1.3% from YA vs. the USDA forecast of up 2.6%. To reach the current USDA estimate, usage in Q4 will need to reach 1.448 bil. bu. up 5.8% from YA. Corn exports at 59 mil. bu. were in line with expectations. Old crop commitments at 3.362 bil. bu. are up 25% YOY vs. the USDA forecast up 16%. Pace analysis would suggest the USDA export forecast at 3.325 bil. is still too low. Noted buyers were Mexico – 21 mil. (10 mil. old, 11 mil. new) and Colombia – 12 mil. (8 mil. old, 4 mil. new), while there were cancellations of 25 mil. bu. of old crop to unknown. New crop commitments have reached 242 mil. bu. a 4-year high while up 36% YOY. With US crop ratings historically average I doubt the USDA changes their trendline yield estimate of 183 bpa in next week’s production update. Given the updates stocks/acreage data here are my early ideas for the old and new crop balance sheets.
SOYBEANS
Prices were mixed as beans closed within $.03 of unchanged, meal was mixed and within $.50 of unchanged while oil was steady to 10 points higher. Temperatures across the Midwest will gradually ease as the high pressure ridge shifts west. Week 2 of the outlook is non-threatening with above normal temperatures combined with normal to above normal precipitation. Aug-26 beans stretched out to a 2-week high on rumors China was seeking offers for US beans. Without evidence of actual sales, prices stalled below resistance at $11.45, falling back to nearly unchanged. US FOB offers at the Gulf are slightly below Brazilian offers. Keep in mind, for China to buy 25 mmt of US soybean prior to Brazil’s harvest in early 2027, weekly sales need to average nearly 1 mmt. So far still only .2 mmt to China while 1.362 mmt to unknown. Meal stretched out to a 4-week high before pulling back. Crush margins were down another $.03 ½ to $2.82 bu. with bean oil PV holding just above 52%. Census crush in May at 213 mil. bu. was below expectations while bringing YTD crush is up 8.2% from YA, vs. the USDA forecast of up 8.4%. To reach the current USDA forecast monthly crush June-August will need to average 218 mil. bu. vs. 200 mil. YA. Bean oil stocks fell to 2.315 bil. lbs. however was nearly 100 mil. above expectations. Daily crush rates fell to an 8-month low at 6.87 mil. bu. per day, despite soaring crush margins. Soybean exports at 9 mil. were below expectations. Old crop sales at under 2 mil. were a MY low while YTD commitments at 1.509 bil. are down 18% from YA vs. the USDA forecast of down 20%. Old crop shipments to China have reached 11.9 mmt while no additional new crop purchases. New crop commitments at 89 mil. bu. while still historically low, they are a 3-year high, up 52% YOY. Meal sales at 414k tons were in line with expectations with old crop commitments up 17% YOY vs. the USDA forecast of up 9.5%. Oil commitments slipped to 826 mil. lbs. down 65% YOY vs. USDA forecast down 58%.
WHEAT
Prices ranged from steady to $.03 ½ higher. CGO Sept-26 was down $.00 ¼ at $5.99 ¾, KC Sept-26 was $.03 ½ higher at $6.38 ½ while MIAX Sept was up $.00 ½ at $6.19. Resistance for CGO rests at $6.17 ¾, while $6.48 ½ for KC. The Govt. of Bangladesh approved the purchase of 220k mt of US wheat. Open interest was little changed in yesterday’s trade suggesting the price increase wasn’t just a short covering rally. CFTC-COT updates are delayed until Monday. Export sales of 11 mil. bu. were in line with expectations. YTD commitments at 213 mil. bu. are down 19% from YA vs. the USDA forecast of down 15%. By class sales were HRW – 2.1 mil, HRS – 2.3 mil., white – 4.4 mil. while SRW and durum 1 mil. bu. each. Spring wheat area in drought fell 6% to 19%.
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