Written Commentary
MORNING AG OUTLOOK
All green on the Ag screen this AM as KC wheat and soybean oil propel agricultural prices higher. Higher energy prices continue to drive inflation fears as the US/Iran war remains at a standoff. With the Straits of Hormuz still closed the path of least resistance for crude oil remains higher. June-26 WTI crude oil is up $3.25 near $103.25 just shy of its contract high from early March. June-26 RBOB is up $.09 per gallon with spot futures trading to its highest level in nearly 4 years, while HO is up $.11. Heavy rain fell across the S. Midwest and Delta region over the past 24 hours as cooler conditions invaded the northern Midwest. Scattered frost was common in the N. plains and NW corn belt. Rainfall over the next week will favor the Gulf Coast and Delta with lighter precipitation for the ECB. Mostly dry for the central and WCB along with the N. plains. Lack of rain in the far SW plains remains worrisome for the HRW crop while drought readings in the N. plains will likely expand. Dry conditions in Argentina are favorable for crop maturation and harvest activities. Rains in S. Brazil this week while central and N. growing areas remain hot/dry stressing the 2nd corn crop. The US $$ index is little changed as the day 2 of the FOMC meeting concludes later today. No change in rates is expected. US stock indices are steady to higher shrugging off higher energy prices as corporate earnings remain strong.
Corn:
July-26 and Dec-26 are both up $.01 ½ at $4.77 ½ and $4.97 ¼ respectively. Both traded into new highs for the month. July-26 is testing the upper end of its $4.50-$4.80 range. Dec-26 has so far held just below its March high of $4.98 ½. Today’s EIA report is expected to show ethanol production very near the previous week’s output of 306 mil. gallons. Margins have remained elevated as corn costs haven’t held pace with higher ethanol prices. Heavy rains from earlier this week will likely not slow corn plantings much. Taiwan reportedly bought 65k mt of US feed corn for July shipment.
Soybeans:
July-26 beans are up $.04 ½ at $11.93 ¾ while Nov-26 is up $.04 at $11.71. July-26 meal is up $1.60 at $329 while oil is up 65 points at 73.14. July-26 beans traded to their highest level in a week while nearing the upper end of its $11.55-$12 range. Nov-26 beans are holding just below its contract high at $11.74 ¼. New contracts highs in bean oil with the spot contracts soaring to a fresh 3 ½ year high. Resistance for July-26 meal is at $335.60. Spot board crush margins are up another $.05 ½ to another all-time high at $3.73 bu. The EU has detected 6 soybean meal shipments testing positive for a non-approved GMO so far in 2026. Four have been from Argentina and 2 from Brazil. So far 2 of the shipments from Argentina and 1 from Brazil have been withdrawn. So far in 2024/25 MY the EU has imported 9.9 mmt of Brazilian meal and 6.9 mmt from Argentina, while on 930k tons from Ukraine, their 3rd largest supplier. As soybean oil prices have surged, UCO imports from China have become more attractive. Two cargoes carrying 339k barrels of UCO have arrived in Port Arthur TX within the last month, the largest imports so far this year. More is expected as the gap between US bean oil and UCO has widened. Rendered beef tallow prices have also spiked. EPA data showing biodiesel and RD production along with feedstocks usage from Feb-26 is due out on Thursday. Census soybean crush from Mch-26 is after the close of trade on Friday. Would expect to start seeing bean oil stocks start to come off their 6-year highs in Feb-26.
Wheat:
Prices range from $.04 to $.08 higher. CGO July-26 is up $.05 ¼ at $6.63 jumping out to a fresh 14 month high. KC July-26 is $.06 higher at $7.08 ¼ with spot futures hitting a 22-month high. MIAX July-26 is up $.04 ¼ at $7.17 ½ trading into new contract highs. The USDA attaché projects Canadian production in 2026/27 MY at 36.2 mmt, down about 10% from YA on slightly lower acres and a return to normal yields. They also project Australian production at 29 mmt, down 19% from YA. Weather impacts from El Nino may present downside risk to this forecast. Exports from both countries are expected to be lower as well.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
