Harvest Fuel Relief Program Announced

MORNING AG OUTLOOK

Mostly higher trade across the Ag space this AM in 2-sided trade.  Energy prices are higher as Houthi rebels stepped up attacks on Saudi Arabia.  Dec-26 WTI crude oil is up $2.15 per barrel at $100.70, stretching out to a new contract high.  Spot RBOB is up $.02 per gallon while HO is $.08 higher.  Yesterday the Trump Administration announced they would be providing $8 billion in fuel assistance to US farmers to help offset record high diesel prices.  Payments from the Harvest Fuel Relief program will be based on planted acres, estimated production costs and yields.  Specific payments for each crop will be released in November.  US soybean harvest and winter wheat plantings were in line with expectations while corn harvest continues to lag.  Dry conditions across the Midwest over the next week should help US harvest to get back on track.  Week 2 of the outlook shows above normal temperatures across the Midwest with above normal precipitation for the WCB and plain states, while below normal rainfall in the east.  Moderate to heavy showers this week for central and S. Brazil and much of Argentina where temperatures will be below normal.  Hot/dry for N. growing areas of Brazil.  The US $$$ is moderately lower while US stock indices are steady to lower.

Corn: 

Dec-26 is $.01 ½ higher at $4.68 ½, rebounding after trading to a fresh 2 ½ month low.  Next support is the August low at $4.57 ¼.  After another session with heavy speculative selling we’ve got the MM long position just under 195k contracts.  Open interest was down nearly 11k contracts.  Harvest advanced 11% in the past week to 44%, below expectations of 49%.  It’s the slowest pace in 7 years and below the 5-year Ave. of 52%.  Delays are most pronounced in the NC Midwest with IA at 26% vs. 50% Ave., SD 29% vs. 47%, MN 38% vs. 53%, and MI 13% vs. 31%.  Until we see better demand for US corn, and/or a weather issue in SA, the path of least resistance remains lower as speculators shed length while US farmers harvest a better-than-expected crop.

Soybeans: 

Nov-26 beans are $.06 higher at $12.59 ½, rebounding after dipping to a 2-month low.  Longer term support is at the 100-day MA, currently $12.26 ¾.  Dec-26 meal is down $1.20 at $353.60 while Dec-26 oil is up 75 points at 67.44.  Crush margins are steady at $2.60 bu.  Despite MM’s being light sellers across the complex yesterday, O.I. was slightly higher.  Beans were up 6.4k contracts while both meal and oil were up less than 1k.  After announced sales yesterday we estimate US bean sales to China between 16.5-17 mmt.  I believe the USDA export forecast at 1.695 bil. bu. (46.1 mmt) is too low if China finishes up their 25 mmt purchase commitment.  Harvest advanced 18% to 64%, still slightly behind the 5-year Ave. of 65%.  The most noted delays were in IA at 57% vs. Ave. of 74%, NE 52% vs. 71% Ave. and KS at 41% vs. 53%.  Brazilian plantings at 26% were up from 15% the previous week and above the 24% pace from YA.  Of China’s 11.88 mmt of soybeans imported in Sept-26, only .361 mmt were from the US, which was better zero from YA.  Imports from Brazil totaled 10.7 mmt.

Wheat: 

Prices range from $.01 to $.06 higher with 2-sided trade across the 3 classes.  CGO Dec-26 is $.06 higher at $6.61, Dec-26 KC is also up $.06 at $7.05 ½ while Dec-26 MIAX is up $.01 at $6.71. Winter wheat plantings advanced 12% to 63%, still below the 5-year Ave. of 69%.  Emergence at 39% also below the 5-year Ave. of 43%.  The EU says they are also working with Ukraine, Turkey, India and N. Africa importing countries in pushing for a safe navigation agreement for the Black Sea, upping pressure on Russia to join the discussions.  Ongoing logistical issues in shipping feed grain from the Black Sea region has provided little support for prices as US wheat remains largely uncompetitive.

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