Mixed as Traders Monitor Developments in Middle East

MORNING AG OUTLOOK

Mixed trade across most of the Ag space overnight as traders monitor developments in the Middle East.  Energy prices have turned mixed in choppy 2-sided trade overnight as recent peace negotiations in Switzerland appear to have calmed heightened tensions.  Mediators from Qatar and Pakistan maintain that US and Iranian officials are back on track to reach a final peace deal within 60 days.  WTI Aug-26 crude oil is down $.95 per barrel at $74.90.  Spot RBOB is steady while HO is up $.02 per gallon.  Updated CFTC-COT data will be released this afternoon, delayed due to Friday’s Juneteenth Holiday.  The USDA will also provide crop progress and condition updates.  Overall global weather is mixed.  Heavy rain and much cooler than normal temperatures impacted a portion of the central Midwest this weekend while the SW plains endure hot/dry conditions.  Rains this week will favor the S. Midwest with lighter amounts across the N. Plains.  The central Midwest and Great Lakes region is expected to see a break from the heavy precipitation.  Above normal temperatures are expected across much of the nation’s midsection in Week 2 of the outlook.  Dry across central and eastern Brazil this weekend with moderate showers across the far West, including Mato Grosso.  Wet across NE Argentina with lighter rains to the South.  Much of W. Europe remains locked  in a hot/dry pattern.  The US $$ is slightly higher in 2-sided trade with US stock indices are mixed and little changed.

Corn: 

July-26 is down $.01 at $4.16 ½ while Dec-26 is steady at $4.44.  Cattle on Feed as of June 1^st at 102% of YA was slightly below expectations of 103%.  Placements at 90% were well below expectations of 95%.  Safras & Mercado lowered their Brazilian corn production forecast .2 mmt to 139.9 mmt, still slightly above the USDA est. of 138 mmt.  IMEA reports 2^nd corn harvest in Mato Grosso has reached 21% vs. only 14% from YA however behind the historical Ave. of 23%.  The BAGE reports Argentine corn harvest has reached 48% while holding their production forecast at 64 mmt vs. the USDA est. of 61 mmt.

Soybeans: 

July-26 beans are $.04 ¾ higher at $11.27 ½ while Nov-26 beans are up $.03 ½ at $11.46 ¼.  July-26 meal is up $.60 at $301.90, while July-26 oil is 55 points higher at 70.16.  The entire complex has held within Thursday’s range.  Crush margins inched up $.01 ½ to $3.08.  Chinese imports of US beans in May-26 reached 1.66 mmt, slightly above the 1.63 mmt imported in May-25.  Their imports from Brazil slipped to 9.96 mmt during the month, down from 12.1 mmt in May-25.  In the Jan thru May period China has imported 8.4 mmt of US soybeans, down 42.5% YOY while imports from Brazil rose 6.7% to 22.7 mmt.  Yesterday the US Soybean Export Council stated they expect China will import 25 mmt of US soybeans 26/27 MY.  Markets will continue to be sensitive to Chinese demand, or the lack thereof.  The BAGE kept their Argentine production forecast unchanged at 50.1 mmt while estimating harvest has reached 97%.  D4 RIN credits generated in May rose to 736 mil., up from 710 in April, well below the monthly pace needed to meet the mandated levels.

Wheat: 

Prices range from $.03 lower in CGO and KC to $.06 lower in KC.  CGO July-26 is down $.03 ½ at $6.02 ¼, KC July-26 is $.06 ½ lower at $6.37 1/2, while MIAX July-26 is $.05 lower at $6.18.  The BAGE reports Argentine plantings have reached 58%, still well above the historical average of 42%.  Despite deepening drought Soft wheat condition in France slipped only 1% to 76% G/E, well above the 68% G/E from YA.   Look for Spring wheat ratings in increase another 1% to 56% G/E.  Russia kept their export taxes on feed grains at zero.

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