Written Commentary
MORNING AG OUTLOOK
Mostly lower trade across the Ag space as prices continue to react to yesterday’s bearish USDA data. Record US yields and higher than expected stocks combined with favorable SA weather will likely limit the upside price potential in the near term. Speculative trader were heavy sellers in corn and soybeans yesterday as they reload on the short side of corn while continue to pare back their long bean position. A dry outlook for at least the next 7-10 days across the US plains does provide some underlying support to wheat prices. The Supreme Court is expected to rule on the legality of the Trump Admin. use of tariffs by Wed. At risk is roughly $150 bil. in tariff revenue so far collected by the Fed Govt under the IEEP Act. Ukraine’s Deputy Prime Minister reports Russian drone strikes impacted 2 vessels used for transporting Ag. products. Spot crude oil is up $1.20 stretching out to a 2 month high. The US $$ is slightly higher. US stock indices are slightly lower.
Corn:
Mch-26 is down $.03 just under $4.19 reaching a fresh 5 month low. Not much support on the chart until $4.10. Near term export demand should remain strong however look for increased competition from Argentina as their harvest approaches. The market will need to find a price level that keeps US demand strong while also trying to restrict additional 2nd crop acres in Brazil. O.I. rose 44k contracts on yesterday’s price plunge. Look for Mch-26 to challenge its contract low at $4.10, possibly $4.00 by the end of Q1 if SA weather holds favorable.
Soybeans:
Mch-26 beans are down $.07 near $10.42, still holding above this months low at $10.35. Mch-26 meal also down $2 holding just above its recent low near $295. Mch-26 oil is up 20 points while holding within yesterday’s range. Oil likely drawing some support from higher energy prices. Still looking for large flash sales confirming recent Chinese purchases. Total Chinese purchases are believed to be between 10-11 mmt, nearing the 12 mmt total. Sinograin successfully auctioned off 1.1 mmt of soybean as they continue to free up storage for US imports. I’m afraid yesterday’s 3 mmt increase in SA production (all Brazil) is only just the beginning of further increases making the even the reduced USDA export forecast of 1.575 bil. a challenge. Look for spot futures to pull back to the $10-$10.25 range.
Wheat:
Prices range from $.04 lower in KC to $.04 higher in MIAX. Inside trade for both KC and CGO futures. The market seemed to take the slightly higher than expected global production and stocks data in stride. Strong sales to end 2025 prompted IKAR to raise their Russian wheat export forecast 2.4 mmt for the 25/26 MY to 46.5 mmt. The USDA held their forecast unchanged yesterday at 44 mmt. Look for Mch-26 CGO to trade back over $1.00 bu. premium to corn.
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