Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space overnight driven by a surge in energy prices. Weekend peace talks between the US/Iran failed to produce a peace agreement resulting in Pres. Trump announcing a blockade of the Strait of Hormuz for vessels seeking to get to Iranian ports. The US Navy will begin blocking maritime traffic through the narrow passageway at 10 EST today. Weekend talks broke down as Iran was unwilling to stop their pursuit of nuclear weapons. In addition to announcing the blockade, Pres. Trump is reportedly considering resuming military strikes in Iran. Spot WTI crude oil is up $7.60 a barrel near $104.15. Spot RBOB is up $.13 per gallon while HO is up $.34. Weekend rains were disappointing for the WC plains while some areas of the SE plains may see localized flooding this week. Precipitation will again favor the central Midwest and Great Lakes region over the next 7 days. Continued dry in the SE states where drought conditions will deepen. Mostly dry for the WCB with slightly better prospects for rain in the N. plains. Scattered rains for central and northern growing areas of Brazil this weekend, while dry in the south. Rain this week will favor RGDS in the deep south. Dryness in the interior south is a growing concern. Warm/dry this weekend for much of Argentina however heavy rains this week for the EC and northern growing areas may produce isolating flooding while also slowing harvest. The US $$$ index and US stock indices are lower.
Corn:
May-26 is up $.04 at $4.45 while Dec-26 is up $.03 ½ at $4.75 ¾. Last week May-26 rejected trade below $4.40 and now has MA resistance above the market between $4.48-$4.49. MM’s were heavy sellers of corn unloading nearly 50k contracts while reducing their long position to 219k. As of Friday would guess its closer to only 190k. Look for today’s planting update to show roughly 5-6% of the US crop seeded as of Sunday the 12th. APK Inform lowered Ukraine’s production forecast to 31.5 mmt and expect exports will reach 25 mmt. Conab will update their Brazilian production forecast tomorrow. The Ave. est. at 140 mmt is up nearly 2 mmt and well above the USDA forecast of 132 mmt.
Soybeans:
May-26 beans are down $.01 at $11.74 ¾ while Nov-26 beans are $.02 ¼ higher at $11.60. May-26 meal is down $2 at $329.80 while holding within Friday’s range. May-26 oil is up 80 points at 67.90 as it continues to try and fill the chart gap from the middle of last week. For now May-26 beans rejected trade into a fresh 4 week high overnight. Support is at the 50-day MA at $11.55 ¼. While energy/war headlines will still drive price volatility, the markets attention will gradually shift toward the US planting season and Pres. Trump’s upcoming trip to China. With his trip already pushed back 6-7 weeks, I wouldn’t expect them to source anymore old crop soybeans from the US but hopefully can count on at least 25 mmt of new crop. Chinese weapons supplied to Iran could complicate negotiations. Conab is expected to raise their Brazilian production forecast 1 mmt to 179 mmt, still just below the USDA forecast of 180 mmt.
Wheat:
Prices recovered overnight ranging from $.08-.16 higher. CGO July-26 is up $.12 ½ at $5.93 ½ while KC July-26 is up $.15 ½ at $6.20 ½. I expect a modest 1-2% increase in WW ratings, up from only 35% G/E last week. The MM long position in SRW wheat (CGO) was short lived as they sold 14k contracts flipping back around to net short 5.6k contracts. APK Inform lowered their Ukraine production forecast in 2026 to 19.9 mmt while cutting their export forecast 1.5 mmt to only 13 mmt. Russia’s Ag. Ministry slashed their export tax 41% to 329/roubles per ton.
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