Mixed, Mostly Higher Trade Overnight

MORNING AG OUTLOOK

Mixed but mostly higher trade across the Ag space overnight.  Wheat is the upside leader as conditions for the US winter crop continue to worsen.  Energy prices are slightly lower as tensions in the Middle East eased a bit.  Late on Monday Pres. Trump called off a planed attack on Iran after leaders from 3 regional powers in the Middle East asked him to “hold off.”  WTI July-26 crude oil is down $.60 a barrel near $103.80.  Spot RBOB and HO are both down $.04 per gallon.  Traders in the Ag. space will continue to monitor for signs of interest from China following Sunday’s fact sheet that stated their intent to purchase $17 bil. in US Ag. goods annually, this in addition to the 25 mmt of soybean they pledged to purchase last fall.  This would take total annual US Ag. purchases to $28-$30 bil., the highest in 4 years.  Sunday’s announcement fueled massive speculative buying and yesterday’s price surge.  Widespread rains across the central midwest the past 24 hours with heaviest totals stretching from SE KS across central MO into S. IL and IN.  Rains thru the upcoming Holiday weekend are forecast to be heaviest for E. TX and the Gulf coast region stretching NE across the S. Midwest and ECB.  Lighter amounts for the Great Lakes region and N. plains.  Week 2 of the outlook continues to lean toward above normal temperatures and normal to above normal rains.  Harvest conditions to remain favorable in Argentina.  In Brazil, only scattered rains for the interior south region.  Hot and dry for the central and NE regions.  The US $$ is slightly higher in 2-sided trade.  US stock indices are lower.

Corn: 

July-26 is up $.02 at $4.79 while Dec-26 is $.01 ½ higher at $4.99 ½.  Resistance for July-26 is at its double top at $4.87 ½ while resistance for Dec-26 is at $5.06 ½.  No date has been set for the US Senate to vote on E-15.  Plantings advanced 19% to 76%, matching the YA pace while ahead of the 5-year Ave. of 70%.  Plantings were in line with expectations.  Emergence at 39% is below YA at 47% and just above the 5-year Ave. of 37%.  I’d expect our first crop ratings next week.  US corn is competitively priced with Brazil thru the end of summer while ranging from $10-$15 ton above Argentina.

Soybeans:

July-26 beans are up $.04 at $12.17 while Nov-26 is up $.03 at $12.04.  July-26 meal is up $1.50 at $336 while July-26 oil is down 15 points at 75.48.  Resistance for July-26 beans is at last week’s high of $12.35.  Crush margins fell back $.02 overnight to $3.53 bu.  Plantings remain at a record pace at 67%, above the 63% pace from YA and 5-year Ave. of 53%.  MI is the only state with a noticeable delay at 37% vs. 46% Ave.  Emergence at 32% matching YA and above the 5-year Ave. of 23%.  US FOB offers at the Gulf remain more than $1 bu. above Argentina through the summer months.  US FOB offers range from $.60-$.90 above that from Brazil.

Wheat: 

Prices range from $.05 to $.07 higher.  CGO July-26 is up $.05 ½ at $6.70, KC July-26 is up $.05 ¼ at $7.09 while MIAX July-26 is $.07 higher at $7.10 ¼.  All 3 classes have held below LW’s high.  Winter ratings dipped another 1% to 27% G/E.  There was a 3% increase in the crop rated poor/VP, now up to 43%.  Overall ratings are well below their historical average and the lowest in 4 years.  Ratings in KS fell another 2% to only 15% G/E while 58% of their crop is rated poor/VP.  Look for abandonment levels to continue rising.  Ratings did increase 4% in Ohio and 3% in both Ok and Oregon.  Ratings in Montana fell another 13% and are off 20% in the past 2 weeks.  Nationally 71% of the crop is headed, vs. 62% YA and 5-year Ave. of 58%.  Using the USDA acres and current crop ratings suggest WW production at 1.065 bil bu, with an average yield of 48.4 bpa.  US wheat prices remain well above competing countries in the global marketplace

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