Written Commentary
MORNING AG OUTLOOK
Higher trade across the Ag space overnight, once again fueled by higher energy prices as tensions in the Middle East escalate. The odds the Strait of Hormuz opening any time soon appear bleak as Iran struck at least 3 cargo ships attempting to move thru the passage in the past day. Three other vessels in the region have also been hit. Spot crude oil is up $5.50 per barrel after trading nearly $10 higher. Spot RBOB is up $.10 a gallon with heating oil up $.20. The higher trade comes a day after the IEA confirmed the release of a record 400 mil. barrels of crude from strategic reserves over the next 2 months by its 32 member countries. US Energy Sec. Chris Wright stated the US portion would total 172 mil. barrels. Dry across much of Argentina the past 24 hours. Rains are expected to fill in over EC and Southern Argentina over the next week providing benefit to later maturing crops. Rains in Brazil will continue to favor northern growing areas with only scattered moisture for the SC region and RGDS. Subsoil moisture for the 2nd crop corn has improved significantly in recent weeks. In the US the system that brought heavy rains across the central Midwest and ECB is finally pushing off to the east. Precipitation over the next week will favor the Great Lakes region. Only scattered amounts for the northern plains and WCB. Dry in the SW plains. Above normal temperatures in the west are expected to slide across the central Midwest and ECB in week 2 of the outlook. The US $$ is slightly higher while stock indices are lower.
Corn:
May-26 is up $.05 at $4.65 ¼ holding below this week’s high of $4.76. Dec-26 is up $.04 at $4.93. Yesterday’s EIA report showed ethanol production rebounded to 331 mil. gallons LW, up from 322 mil. the previous week. Corn usage at 111 mil. bu. or 15.9 mil. bu. per day was above the 15.4 needed to reach the USDA forecast of 5.60 bil. Ethanol stocks fell to 25.6 mil. barrels, well below the 27.6 mb from YA on heavy weekly consumption. Export sales are expected to range between 35-85 mil. bu. Following recent rains the Rosario Grain Exchange held their Argentine production forecast steady at 62 mmt, well above the USDA est. of 52 mmt. Their acreage est. at 8.13 mil. HA and yield of 7.63 tons/HA are both well above the USDA 7.5 mil. HA and yield of 6.93 tons/HA.
Soybeans:
May-26 beans are up $.15 ½ at $12.29 ½, holding just below this week’s high of $12.33 ¾. May-26 meal is up $3.30 at $318.70. May-26 oil is up 90 points at 68.06 while holding within yesterday’s range. The Rosario Grain Exchange held their Argentine production forecast steady at 48 mmt, in line with the USDA. Speculative buying is anticipating supportive RVO and SRE announcements from the Trump Administration this month while RIN values also rally. US Treasury Sec. Bessent and USTR Greer are meeting this weekend in Paris with Chinese trade officials ahead of Pres. Trump/Xi meeting in Beijing later this month. Bulls remain hopeful for fresh Chinese purchases despite US Gulf FOB offers running $1.00-$1.30 over Brazilian offers into the summer months. Wire service reports that Cargill has paused Brazilian soybean shipments to China over changes to their inspection procedures has helped widen that gap. Export sales are expected to range between 10-30 mil. bu. for beans, 150-350k tons of meal and 0 to 15k tons of oil.
Wheat:
Prices range from $.06 to $.08 higher. CGO May-26 is up $.08 at $6.02 ¾. KC May-26 is up $.07 ½ at $6.21 while holding within yesterday’s range. Export sales are expected to range from 8-16 mil. bu. The RGE forecasts Argentine production at 29.5 mmt, well above the USDA est. of 27.8 mmt. Russian exports in March are expected to reach 3.7 mmt, nearly double the 2.0 mmt shipped in Mch-25.
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