Ag Prices Begin Trading Week on Higher Note

MORNING AG OUTLOOK

The screen is green as prices across the Ag space begin the first full trading week of October on a higher note.  On Friday the USDA will provide updated production and balance sheet data.  Last Friday’s CFTC report showed Money managers were net sellers across the Ag. space for a 4^th consecutive week.  MM’s did add another 15k contracts of soybean meal, extending their record long position to just over 207k contracts.  Energy prices are mixed as tensions in the Persian Gulf remain elevated.  Houthi rebels struck a Saudi oil refinery this weekend.  Spot WTI crude oil is down $1.05 a barrel at $90.05, spot RBOB is off $.02 per gallon while HO is up $.08.  Outside of passing showers in the S. Plains and far N. Midwest, much of the nation’s midsection was dry this weekend.  Favorable harvest conditions look to extend into mid-month after heavy rains in Sept-26 delayed harvest activities across much of the Northern and Central Midwest.  Above normal precipitation to continue in S. Brazil with isolated flooding possible.  Scattered showers in the WC region along with much of Argentina.  Spain and France continue to see some relief from drought while above normal temperatures shift east.  The US $$ is moderately higher trading to a fresh 18-month high.  US stock indices are slightly lower.

Corn: 

Dec-26 is up $.02 ¼ at $5.00, holding within Friday’s range.  Support below the market is at $4.88 with near term resistance at the 50-day MA at $5.07 ½.  MM’s were net sellers of 36.6k contracts of corn, reducing their long position to 378k, a 5-week low.  Very uneven rainfall across the Central Midwest last week.  While significant harvest delays in some areas, good harvest progress was made across the S. Midwest and much of the ECB.  I look for US harvest to have advanced 10% to 28% complete, vs. the 5-year Ave. of 29%.  Bulls remain hopeful for Chinese demand while exports continue to run well below the pace needed to reach the current USDA forecast of 3.275 bil.

Soybeans: 

Nov-26 beans are up $.10 ¼ at $12.88 ½, trading above Friday’s high.  Dec-26 meal is steady at $347.50 after falling to a new 1-month low.  Dec-26 oil is up over $.01 lb., trading to a 3-week high while bumping up against $.70 lb.  MM’s were net sellers of nearly 24k contracts of soybeans, nearly 9k oil while buying 15k meal.  Crush margins improved $.10 to $2.44 ½ with BO PV improving to 50.1%.  With China on Golden Holiday until Thursday, demand interest will likely be quiet.  Their purchase of US beans likely just above 14 mmt.  Reports of mold and other disease issues in areas impacted by heavy rains last week likely supporting trade overnight.  I expect harvest to have advanced 13% to 30%, below the 5-year Ave. of 35%.

Wheat: 

Prices are $.08-$.11 higher in 2-sided trade.  CGO Dec-26 is up $.10 ½ at $6.93 ½, Dec-26 KC is $.11 higher at $7.46, while Dec-26 MIAX is up $.08 ¾ at $7.06 ¾.  The Russia/Ukraine war continues to intensify as Russia struck port infrastructure in Odesa while also destroying a vessel loaded with grain.  Russia also struck a key bridge in Kyiv.  Ukraine continues to target Russia energy infrastructure.  Ukraine’s wheat exports since July 1^st at 2.9 mmt are down 43% YOY, while 30% of the winter crop has been planted.  Saudi Arabia reportedly bought 683k mt of wheat in their recent tender for 535k mt.  Prices ranged from $334.66-$348/mt CF with an average of $339.24.  The grain was sourced from Australia, the Black Sea region, the EU along with N. and S. America.  After Estonia banned the transit of Russian (and Belarusian) grain through their country to ports along the Baltic Sea, Latavia and Lithuania are considering doing the same, further restricting Russia’s ability to export wheat.

Interested in more futures markets?  Explore our Market Dashboards here.