Written Commentary
CORN
Prices were $.07-$.09 higher while spreads also strengthened. With volatility expected to remain elevated, I look for May-26 to hold in a $4.40-$4.80 range with energy likely to drive any directional breakout. Dec-26 pushed back up to $4.90 vs. this month’s high of $4.98 ½. An Allendale survey showed US farmers will plant 93.68 mil. Acres of corn in 2026, down from 98.80 mil. YA. Earlier this week S&P Global est. corn acres will reach 95.2 mil. vs. the USDA Forum est. last month at 94 mil. Since the war with Iran began, which triggered a 30-35% surge in fertilizer prices Dec-26 corn has worked hard to not lose too many acres to soybeans this Spring. Ethanol production slipped 321 mil. gallons last week, down from 331 mil. the previous week and off 1% from YA. Production was at the low end of expectations and slightly below the pace needed to reach the USDA corn usage forecast of 5.60 bil. Bu. In the MY to date there has been 2.959 bil. bu. used, or 15.25 mbd, an annualized pace of 5.57 bil. Ethanol stocks rose to an 11-month high at 26.4 mil. barrels. Implied gasoline usage LW slipped 5.6% to 8.728 tbd, and down 1% YOY. Tomorrow’s export sales are expected to range from 25-70 mil. bu.
SOYBEANS
Prices were higher across the complex with beans up $.05-$.10 with new crop futures the upside leader. Meal surged $5-$10 per ton while oil backed up 10-45 points. Bean and oil spreads weakened while meal spreads firmed. Inside trade for May-26 beans. Spot board crush margins have surged another $.12 ½ to $2.67 bu., the highest since Aug-23. Bean oil PV slipped to 50.5%. While US crush rates remain record high and support another 10-20 mil. bu. increase to the current USDA forecast of 2.575 bil. bu., exports are too high without additional Chinese purchases. I suspect even higher energy prices and/or renewed buying from China, are needed for spot soybeans to trade back above $12. If neither happens, look for prices to retest $11 this Spring. As expected, the Fed. Reserve held their Fed Funds target range at 3.5%-3.75%. Chair Powell’s stated that while the oil shock stemming from the war with Iran would boost inflation in the short-term, “the implications of events in the Middle East for the US economy are uncertain.” Brazil’s Ag. Ministry said they have stepped up protocols to a ensure a higher quality of soybean shipments to China and do not expect to see a halt in exports to the world’s largest importer. They also stated only vessels that meet the higher quality standards will leave their ports. With Trump’s trip to Beijing now postponed for about “five or six weeks” the Administration works to get new dates scheduled. The trade anticipates the Trump Admin. will finally update their RVO and SRE reallocation plans for 2026 and 2027 at next Friday’s Ag. event at the White House. The Allendale survey showed US bean plantings at 85.659 mil. vs. the USDA Forum est. of 85 mil. which matches the S&P Global forecast. Export sales are expected to range between 14-28 mil. for beans, 150-300 tons of meal and -10 – 12k tons of oil.
WHEAT
Prices surged $.12-$.19 with KC futures the upside leader as markets injected both weather and war premium. Above normal temperatures will build across the S. plains and WCB through this weekend with no moisture for at least the next week. The May-26 contracts in all 3 classes traded outside the previous sessions range. Wild temperature swings and growing drought in the SW plains provided underlying support and fueled speculative buying. Chinese wheat and wheat flour imports in Jan/Feb at 2.16 mmt were up over 1000% from YA. SovEcon raised their Russian wheat export forecast for Mch-26 to 3.8 mmt, well above the historical average of 3.1 mmt. The Allendale survey showed all US wheat plantings at 44.877 mil. acres vs. USDA at 45 mil. and S&P Global at 44.05 mil. S&P Global winter wheat est. of 32.4 mil. is 2% below the USDA est. of 33 mil. Export sales are expected to range between 12-20 mil. bu.
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