Written Commentary
MORNING AG OUTLOOK
Lower trade across the Ag space overnight as prices back off a bit from yesterday’s strong close. Speculative buying fueled yesterday’s price surge supported by strong export demand for feed grains. While soybean sales were weak, hopes for addition Chinese demand drove soybean futures to fresh 2 ½ month highs yesterday, while bean oil carved out new contract highs for a 3rd consecutive session. It would appear current price levels have a lot of bullish news built in with RVO/SRE announcement expected from the EPA next month followed by Pres. Trump’s visit to China in April. Recent rains have brought some relief in EC growing areas of Argentina. While additional moisture is needed, forecasts continue to shift more favorable the 2nd half of Feb. Much of Brazil was dry the past 24 hours. A dryer outlook across WC Brazil will favor crop maturation and harvest as heavier rains shift into the SC region. The central US will see above normal temperatures thru the end of Feb-26. Rains are expected to develop in the S. plains today before stretching across the Delta and southern Midwest this weekend. Dry across the northern half of the Midwest this weekend before showers develop in the N. plains early next week. Spot crude is down $.45 a barrel. The US $$ is slightly higher while US stock indices are lower.
Corn:
Mch-26 is down $.01 at $4.30 ¼ . 50 day MA resistance is near LW’s high of $4.36. Spot prices remain rangebound between $4.15-$4.40. Export sales are running 31% over YA vs. this week’s revised USDA forecast of up 15.5%. The BAGE noted that recent rains across Argentina have been uneven with additional showers needed to support their production forecast of 57 mmt. Crop ratings fell another 1% to 43% G/E however remain well above YA at 26%. This week the USDA kept their Argentine forecast steady at 53 mmt. While Argentine FOB offers continue to run $.15-$.20 below US offers, Brazil remains largely absent as ethanol producers scoop up domestic supplies. Likely summer with the arrival of their 2nd crop before more active in the global marketplace
Soybeans:
Mch-26 beans is down $.08 at $11.29 ¼ while holding within yesterday range. Mch-26 meal is down $1 at $307. Mch-26 oil is down 59 points at 56.95, also holding within yesterday’s range. Soybeans will likely need to see additional Chinese demand soon to hold recent price strength. Spot board crush margins improved $.03 yesterday to $1.73 bu. with bean oil PV slipping back to 48.3%. The BAGE held their Argentine production forecast unchanged 48.5 mmt while crop ratings fell another 8% to 32% G/E, still better than the 18% from YA. Brazilian FOB offers remain $.90-$1.20 below US Gulf thru May-26.
Wheat:
Prices range from $.03-$.08 lower overnight. CGO Mch-26 is down $.06 at $5.46 ½, however holding within yesterday’s range. KC Mch-26 is down $.07 ¼ at $5.46 ¾, also an inside trade. Yesterday’s higher trade saw O.I. down nearly 6k in CGO futures, while up 6K in KC. Export commitments are running 17% above YA, vs. USDA forecast of up 9%. IKAR raised Russia’s 2026/27 wheat production forecast 3 mmt to 91 mmt vs. the USDA est. of 89.5 mmt. The higher production forecast seems to have halted the recent price surge in its tracks following some reports their crop may have experienced damage from recent frigid conditions and icing issues.
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