Ags Again Draw Support From Higher Energies

MORNING AG OUTLOOK

Higher trade across the Ag space this AM as prices once again draw support from higher energy prices.  Energy markets are shrugging off Pres Trump’s decision to extend a deadline to attack Iran’s energy infrastructure unless they agree to a US peace proposal that would open the Straits of Hormuz.  In his social media post the Pres maintains the extension was at the request of the Iranian Govt and that peace negotiations are ongoing while Iran claims they have no intentions of holding talks with the US.  The new deadline is April 6^th.  Spot WTI crude oil is up $2.25 per barrel near $96.75.  Spot RBOB is up $.06 per gallon with HO $.08 higher.  Today the EPA is expected to announce their long awaited policies on US biofuel blending quota’s and SRE’s at their “American Ag. Appreciation event” in Washington.  Next Tues brings USDA Mch 1^st stocks data along with prospective plantings.  Widespread rain and much cooler temperatures across the Great Lakes regions and ECB the past 24 hours.  Dry this weekend across much of the nation’s midsection as temperatures recover into early next week.  Rains next week will again favor the central and ECB.  Lite, scattered precipitation for the WCB and northern plains, dry in the SW plains.  Rains in Argentina will be most concentrated in Buenos Aires.  Dry for WC and far southern Brazil.  Modest rains for the interior south and far northern growing areas.  The US $$ is moderately higher while challenging the highs for the week.  US stock indices are moderately lower, challenging the lows for the week.

Corn: 

May-26 is up $.02 ½ at $4.69 ½ while Dec-26 is up $.01 ½ at $4.96.  The Reuters poll shows analysts expected Mch. 1^st stocks at 9.104 bil. bu. up from 8.147 YA.  We are just below that at 9.074 bil.  Estimates range from 8.575 – 9.378 bil.  Corn acres are expected to slip to 94.371 bil. down from 98.788 YA.  We are at 93.75 mil. with the range of guesses 92.60 – 96 mil.  US exports remain strong with YTD commitments at 2.712 bil. bu. up 30% from YA, vs. the USDA forecast of up 15.5%.  The quarterly hog/pig report showed Mch. 1^st inventories at 100% of YA levels, just below expectations of 101%.  The end of March USDA reports have been supportive for corn in recent years closing higher the past 5 and 65% of the years since 2000.

Soybeans: 

May-26 beans are up $.02 ½ near $11.76 while Nov-26 beans are $.04 ½ higher at $11.57 ¼, pushing into new highs for the week.  May-26 meal is now steady at $322.10 while oil is up 57 points at 68.59.  We estimate MM are holding a record long position in soybean oil at just over 150k contracts. President Trumps trip to Beijing being rescheduled for mid-May helped fuel speculative buying this week.  The Reuters poll shows analysts expected Mch 1^st stocks at 2.067 bil. bu. up from 1.911 YA.  Estimates range from 1.880 – 2.125 bil.  We are near the high end of the range at 2.116 bil  Bean acres are expected to jump to 85.55 bil up from 81.215 YA.  We are at 85.5 mil. with the range of guesses 84.25–86.5 mil.  Today’s EPA will likely show mandated green diesel blending between 5.3-5.6 bil gallons annually vs. 3.35 bil in 2025.  Also look for the Trump Admin. attempt to reallocate 75% of the SRE’s back onto Big Oil.  Export sales are holding up decent despite its premium to Brazil with YTD commitments down 18% vs. the USDA forecast of down 16%.  Meal sales are record high 14% YOY vs. the USDA up 6%.  Bean exports are down 60% YOY vs. USDA forecast of down 52%.

Wheat: 

Prices range from $.03 -$.05 higher with all 3 classes pushing into new highs for the week.  CGO May-26 is up $.02 ½ at $6.07 ½ while KC May-26 is up $.05 ½ at $6.32 ¼. US winter wheat area in drought expanded 2% to 57%, a new 52 week high.  Look for further expansion in drought readings next week.  Eventually rains in the extended forecast will need to find a rain gauge in order for crop prospects to improve.  The Reuters poll shows analysts expected Mch 1^st stocks at 1.310 bil bu. up from 1.237 YA.  We are at 1.323 bil with the range of est. at 1.289 – 1.334 bil.  All wheat acres are expected to slip to 44.786 down from 45.328 YA.  Winter wheat acres are expected to fall to 32.73 mil. vs. 33.153 YA.  For WW we are at 32.6 mil. with a range of est. 31.9 to 33.4 mil.  Algeria is believed to have purchased 660-700k mt of wheat near $272/mt CF likely sourced from the Black Sea region.

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