Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space overnight as the markets await USDA WASDE updates at 11 CST. No significant changes to the US balance sheets are expected. Yesterday’s trade saw heavy speculative buying in soybean oil driven by hopes a trade deal with India will improve demand with the removal of import tariffs. Spot board crush margins rebounded $.06 ½ to $1.68 bu. while bean oil PV surged to a fresh 6 month high at 48.8%. Yesterday US Treasury Sec. Bessent acknowledged a Sr. US Treasury official visited China last week to “strengthen channels of communication” between the world’s 2 largest economies. Bessent is expected to meet with China’s Vice Premier ahead of Pres. Trump’s expected trip to China in April. Scattered and lite rains across Cordoba and SantFe in EC Argentina the past 24 hours. Several chances for beneficial rains over the next week to 10 days likely to reduce crop stress. Scattered rains across C. Brazil in the past 24 hours while dry to the south. Rains will gradually shift south providing relief in RGDS while a dryer outlook across central areas should promote crop maturation and harvest. The central US will see above normal temperatures the next 2 weeks. By this weekend heavy rains are expected to stretch from the SE plains across the Delta and southern Midwest thru early next week. Little if any moisture for the NW third of the corn/soybean belt and northern plains. Spot crude is steady in 2 sided trade. The US $$$ is slightly higher while US stock indices are mixed.
Corn:
Mch-26 is up $.01 ½ at $4.30 ¼ near session highs. Spot prices remain rangebound between $4.15-$4.40. I see no change in US stocks at 2.227 bil. bu. in tomorrow’s USDA WASDE report. Argentina’s FOB offers are now $.20-$.30 bu. below the US Gulf which will continue to cut into US market share. Yesterday’s export inspections at 52 mil. bu. were above expectations however below the 62 mil. needed per week to reach the USDA forecast. YTD inspections at 1.336 bil. are up 47% from YA vs. the USDA forecast of up 12%.
Soybeans:
Mch-26 beans are up $.03 ½ at $11.14 ¼. Mch-26 oil is down 17 points at 56.52. An early rally stopped just shy of its contract high at 56.97. Mch-26 meal is up $1.40 at $299.10. Despite the announced flash sale of 264k mt yesterday, another 8 mmt of Chinese purchases of US beans would appear unlikely as US FOB offers remain $.80-$1.10 above Brazil thru May-26. Look for higher production est. for Brazil in today’s WASDE, perhaps offset by lower in Argentina. Look for bean oil usage for biofuel production to shift to other domestic usage and/or exports. Malaysian palm oil stocks saw 1st drop in 11 months to 2.815 mmt as production fell 14% to 1.58 mmt.
Wheat:
Mixed trade overnight with prices ranges from up $.02 higher in KC to $.01 lower in MIAX. Inside trade for CGO Mch-26 as prices stuck between 50/100 day MA. KC Mch-26 building support at MA’s near $5.26 ½. Wheat continues to lack a spark to trigger a lasting short covering rally.
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