Ag Markets Mixed, Monitoring Mid East

MORNING AG OUTLOOK

Mixed trade across the Ag Space this AM as markets monitor developments in the Middle East ahead the expiration of the US/Iran ceasefire.  US Vice Pres. JD Vance is expected to lead negotiations for the US in Pakistan.  The timing of these peace talks and who will be in attendance from Iran remain unclear.  Pres. Trump maintains that if a peace agreement isn’t reached, he’ll order military strikes on Iran’s infrastructure.  Iran insists they will “not accept negotiations under the shadow of threats.”   June-26 WTI crude oil is up $.20 a barrel near $87.60.  Spot RBOB is up $.02 per gallon while HO is up $.04.  Above normal temperatures across much of the nation’s midsection this week.  Rain is expected to favor the central and southern Midwest.  Some precipitation is expected for drought areas in the SE and W. Kansas.  Dry for the far SW plains with light to moderate shower activity in the N. plains.  Scattered rain this week in Argentina will improve harvest activities.  Showers in S. Brazil this week while the central and northern growing areas turn hot/dry.  The US $$ index is moderately higher while holding within yesterday’s range.  US stock indices are moderately higher after the Nasdaq snapped a streak of 13 consecutive higher closes yesterday.

Corn:

July-26 and Dec-26 are both $.00 ½ lower at $4.59 ¾ and $4.79 respectively, as both held withing yesterday’s range.  Near-term resistance for July-26 is at $4.62 ½ with support at $4.55 ¾.  Plantings at 11% were in line with YA and trade expectations and just above the 5-year Ave. of 9%.  Progress in the ECB is carrying the Midwest with TN at 64% vs. 5-year Ave. of 24%, KY at 48% vs. 18%, IN at 14% vs. 3%, and IL at 13 vs. 8% Ave.  Iowa at 2% is behind its Ave. of 8%.  4% of the crop has emerged vs. YA and 5-year Ave. of 2%.  The USDA’s attache in Argentina is forecast their 25/26 production at 61 mmt, well above the official USDA forecast of 52 mmt.  The increase largely due to increased acres.  This est is in line with the BAGE however still below the Rosario Grain Exchanged forecast of 67 mmt.

Soybeans: 

July-26 beans are up $.05 at $11.86 ¾ while Nov-26 is $.04 higher at $11.61 ¾.  July-26 held support at its 50-day MA overnight.  July-26 meal is down $.60 at $320.60 while July-26 oil traded into new contract highs currently up 75 points at 70.05.  Spot futures trade to its highest level since July-23.  Plantings are at a record pace at 12%, well above 7% from YA and 5-year Ave. of 5%.  The Delta and ECB are carrying the way while little progress in the WCB and northern Midwest.  LA is 58% planted vs. 5-year Ave. of 32%, MS at 55% vs. 23% Ave. while TN is 50% vs. 9% Ave.  Brazil’s harvest at 92% is now only slightly behind the 94% pace from YA.  Safras & Mercado raised their production forecast .4 mmt to 178.1 mmt, just below the USDA est. of 180 mmt.  The markets attention will gradually shift to Pres. Trump’s meeting in Beijing with Chinese leader Xi next month.

Wheat: 

Prices have turned steady to $.02 lower, unable to hold early strength on lower-than-expected crop ratings.  CGO July-26 is down $.02 ½ at $6.03 ½ while KC July-26 is $.03 lower at $6.44 ½.  KC July-26 stalled just below LW’s 13 month high at $6.63 in yesterday’s trade.  Winter wheat ratings fell 4% to 30% G/E, a larger than expected drop.  Overall ratings remain well below their historical average.  Ratings in KS fell another 8% to only 24% while poor/VP increased to 41%.   Nationally 20% of the crop is headed, vs. 14% YA and 5-year Ave. of 12%.  In KS 15% of the crop was headed.  India has approved the export of another 2.5 mmt of wheat, raising total export permissions to 5 mmt.

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