Ag Prices Weighed Down by Energies + Favorable Weather

MORNING AG OUTLOOK

Except for wheat we’re seeing lower trade across much of the Ag space this AM with prices weighed down by lower energy markets and favorable weather.  While the standoff in the Persian Gulf continues and the Straits of Hormuz remains mostly closed, energy prices have softened after failing to trade into new highs.  WTI July-26 crude oil is down $2.00 a barrel near $102.15.  Spot RBOB is down $.08 per gallon while HO is off $.10.  Traders will continue to monitor signs of demand interest from China.  China’s Ministry of Commerce stated that China and the US have agreed to cut tariffs on agricultural trade as part of a broader trade deal however didn’t mention which products would be included nor mentioned the additional $17 bil commitment as referenced in the White House fact sheet.  Speculative traders were moderate sellers across the Ag. space yesterday following massive buying on Monday.  The past 24 hour saw heavy rains stretch from E. TX and the Gulf coast region through the S. Midwest and parts of the ECB.  Heavy rains will continue along this path into early next week with lighter amounts for the WCB and southern plains.  Mostly dry for the N. Midwest and Great Lakes region.  Week 2 of the outlook shows above normal temperatures for much of the nation’s midsection with normal to above normal rains.  Harvest conditions to remain favorable in Argentina.  In Brazil, scattered rains for the interior south region while hot and dry for the central and NE regions.  The US $$ is slightly higher in 2-sided trade.  US stock indices are higher.

Corn: 

July-26 and Dec-26 are both $.04 lower at $4.71 ¼ and $4.93 ¾ respectively.  Initial support for July is at $4.68 ¾.  Support for December is at $4.87 ½.  No date has been set for the US Senate to vote on E-15.  Today’s EIA data is expected to show ethanol production recover to 323 mil. gallons last week, up from 318 mil. the previous week.  Friday’s COF report is expected to show cattle inventories as of May 1^st at 11.536 mil. head, up 1.4% from YA.  Placements are expected to rise 3% with marketings down 9.5%.

Soybeans: 

July-26 beans are down $.06 at $12.03 ½ while Nov-26 is $.05 lower at $11.98.  July-26 meal is down $2.50 at $329.80 while July-26 oil is up 5 points at 75.49.  Support for July-26 beans is at $11.92.  Crush margins are up $.02 at overnight at $3.53 ½ bu.  Chinese customs data showed they imported 3.3 mmt of US soybeans in April, well above the 1.38 mmt from April-25.  Their total imports for the month at 8.5 mmt were up 40% YOY however below expectations of 10 mmt.

Wheat: 

Prices range are $.02 to $.04 higher across the 3 classes.  CGO July-26 is up $.02 at $6.69 ¼, KC July-26 is up $.02 at $7.05 ¾ while MIAX July-26 is $.03 higher at $7.00.  All 3 classes experiencing 2-sided trade overnight.  Algeria’s reportedly bought 200k mt of milling wheat in their recent 50k mt tender for July-Aug shipment.  Prices ranged from $285-$292/mt.  It would appear US wheat is least likely to benefit from the Chinese trade agreement with US prices uncompetitive in the global marketplace.

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