Markets Give Back Portion of Price Surge

MORNING AG OUTLOOK

Lower trade across most of the Ag. space as markets give back a portion of yesterday’s price surge triggered by lower-than-expected US corn and soybean production. Speculative traders were healthy buyers across the Ag. markets yesterday after 2 months of shedding length. With the USDA reports out of the way and US harvest nearing completion, the markets attention shifts to monitoring peace negotiations in the UAE and South American weather. So far, no breakthroughs in drawing a cease-fire or the reopening of the Black Sea. No flash sales from the USDA or EIA ethanol production data today as Govt. offices are closed in honor of Veterans Day. Energy prices have rebounded with spot WTI crude oil up $1.15 per barrel at $87.20 while spot RBOB is up $.01 per gallon with HO $.09 higher. Scattered showers across the N. Plains, otherwise dry across the nation’s midsection the past 24 hours. Light rains in the Great Lakes region and ECB the next 24-48 hours otherwise dry across Midwest through the end of the week which should enable harvest to wrap up in a timely manner. South American weather remains non-threatening. A good mix of rain, sunshine and above normal temperatures are favorable for planting progress and early crop development in Argentina. In Brazil heavier precipitation shifts from the South to the WC and northern growing areas, also favorable for crop development. The US $$ is moderately higher, stretching out to a 1 month high after yesterday’s hotter than expected CPI report. PPI data to be released on Friday. US stock indices are higher led by a 1.75% jump in the Nasdaq.

Corn:

Dec-26 is down $.02 ½ at $4.46 ½ while holding within yesterday’s range. US production was cut 141 mil. bu. to 15.893 bil., 70 mil. below expectations with the Ave. US yield down 1.6 bpa to 179.6 bpa. There were no changes to harvested acres. US ending stocks were down 91 mil. to 1.758 bil. 82 mil. below expectations. New crop usage was lowered 50 mil. bu. with exports and feed usage both off 25 mil. For the last 2 crop years combined, Brazil’s production was increased 5.5 mmt with nearly all of the increase offset by higher usage for ethanol. While yesterday’s USDA report may have raised the price floor and stopped the bleeding for now, to see prices push above yesterday’s high will likely require a more threatening forecast in South America or perhaps some unexpected demand from China. The USDA also shifted 2 mmt of exports away from Ukraine to Argentina.

 Soybeans:

Jan-27 beans are $.05 ½ lower at $12.22 ½, holding within yesterday’s range. Next resistance is the 100-day MA at $12.51 ¾. Dec-26 meal is down $1.60 at $324.90 while Dec-26 oil is up 67 points to 63.44, stretching out to new highs for the week. Crush margins have rebounded $.09 to $1.90 bu. after falling to a 10-month low yesterday. US production rose 12 mil. bu. to 4.574 bil., 23 mil. below expectations. The Ave. US yield was increased .3 bpa to 53.3 bpa with no changes to harvested acres. 2026/27 ending stocks were cut 15 mil. to 300 mil. 30 mil. below expectations. Exports increased 25 mil. bu. while the Ave. Farm Price was raised $.10 to $12.10 bu. Global stocks in 2026/27 were down nearly 1 mmt to 123.5 mmt, vs. expectations of no change. South American production was left unchanged, Chinese imports unchanged. Yesterday’s sharply higher close suggests the market was trading production and stocks figures significantly higher than the pre-report estimates with a lot of 54-55 bpa yields floating around. While we’re not in a rationing situation yet, the lower US production and stocks outlook make it critical SA achieves trendline yields

 Wheat:

Prices are $.02 higher pretty much across the 3 classes in 2-sided trade overnight. Prices were higher yesterday, drawing support from strength in corn and soybeans. By itself, the USDA data for wheat was neutral to bearish with global stocks above expectations. US ending stocks rose 3 mil. bu. to 743 mil. in line with expectations. HRW stocks increased 11 mil. bu. to 344 mil. while white wheat stocks fell 10 mil. to 70 mil. Global production increased 5 mmt to 827.5mmt. Argentina and Australia both up 1.5 mmt. Global stocks increased 5 mmt to 281 mmt, vs. expectations for a 1 mmt increase. Russia and Ukraine exports cut another 1 mmt each to 39 and 11.5 mmt respectively. Australian exports were up 1 mmt while Argentina was up .5 mmt. Stocks/Use among global exporters rose to 18.2%, up from 17.3% in Oct-26 while matching YA. Without progress toward peace between Ukraine/Russia or at least some progress on reopening the Black Sea I’d expect the market to inject additional War premium.

Interested in more futures markets?  Explore our Market Dashboards here.