Written Commentary
MORNING AG OUTLOOK
Higher trade across the Ag futures space this AM ahead of today’s USDA production and WASDE data. Strength is being driven by another sizeable drop in US winter wheat ratings and higher energy prices. After rejecting Iran’s counterproposal to the most recent US peace agreement Pres. Trump stated that the US/Iran ceasefire was on “life support.” Iran insists on receiving war reparations, full sovereignty over the Straits of Hormuz, the release of frozen assets and for sanctions to be lifted. WTI June-26 crude oil is up $3.40 a barrel near $101.45. Spot RBOB is up $.09 a gallon while HO is $.11 higher. Dry across much of the nation’s midsection the past 24 hours with lingering rain activity in the SE. Light rains across the central Midwest and ECB over the next 5 days with the next round of heavy showers early next week. Little to no precipitation for the SW plains and far WCB. Week 2 of the outlook holding with above normal temperatures and precipitation. Favorable harvest conditions for much of Argentina this week. In Brazil good rains across the interior south with lighter amounts in WC Mato Grosso. Hot and dry for the central and EC regions. The US $$$ is moderately higher awaiting key inflation data. CPI data from April is expected to have risen .6% and up 3.7% YOY. US stock indices are pointing lower.
Corn:
July-26 and Dec-26 are both $.03 higher at $4.78 ¼ and $5.00 ¾ respectively. Money managers bought another 8k contracts yesterday pushing their long position to 364k contracts. Traders expect little change in old crop ending stocks in today’s USDA WASDE report. We look for a 25 mil. bu. cut to 2.102 bil. on higher exports and feed usage while lower demand for ethanol production. 2026 production is expected to fall nearly 1.1 bil. bu. to 15.935 bil. due to lower acres. The US House this week is expected to vote on legislation to allow the year-round sale of E-15. Corn plantings advanced 19% to 57%, slightly below the YA pace of 59% while ahead of the 5-year Ave. of 52%. Plantings were in line with expectations. Emergence at 23% is just below the YA pace of 26% and above the 5-year Ave. of 19%.
Soybeans:
July-26 beans are $.04 ½ higher at $12.17 ½ while Nov-26 is up $.03 at $11.97 ¾. July-26 meal is up $1.20 at $326 while July-26 oil is 61 points higher at 74.35. Resistance for July beans is at LW’s high of $12.26 ¼. Inside trade for July-26 and Nov-26 beans and July-26 oil. Without additional old crop sales to China, the USDA soybean export forecast at 1.540 bil. bu. is likely too large. The ave guess in the Reuters poll shows old crop ending stocks slipping 5 mil. bu. to 345. New crop production is expected to increase just over 180 mil. bu. to 4.445 bil. with trendline yields holding at 53 bpa. Plantings remain at a record pace at 49%, above the 45% pace from YA and 5-year Ave. of 23%. MI is the only state with a noticeable delay at 12% vs. 26% Ave. Emergence at 20% is above the 16% pace from YA and 5-year Ave. of 12%.
Wheat:
Prices are $.11-$.16 higher across the 3 classes. CGO July-26 is up $.12 ½ at $6.46 ¾, KC July-26 is $.16 higher at $7.02 ¼, while MIAX July-26 is up $.11 at $6.97 ½. WW ratings dipped another 3% to 28% G/E as there was a 3% shift from good to VP. 40% of the crop is now rated poor/VP vs. only 18% YA. Overall ratings remain at a 3-year low. Ratings in KS fell another 5% to only 17% G/E. 51% of the crop in Kansas is rated poor/VP. Look for a higher-than-normal level of abandonment in KS this year. G/E ratings increased 10% in MT while falling 7% in OK and 6% in TX and NE. Nationally 61% of the crop is headed, vs. 51% YA and 5-year Ave. of 45%. Current conditions suggest WW production at 1.170 bil. bu., down 17 mil. from last week, with an average yield of 49.6 bpa. Spring wheat plantings advanced 53%, still trailing the YA pace of 63% however above the 5-year Ave. of 51%. Emergence at 23% is just below YA at 25% and above the 5-year Ave. of 19%.
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