Written Commentary
MORNING AG OUTLOOK
Agricultural prices are higher this AM ahead of tomorrow’s USDA production and WASDE updates. The Reuters survey shows traders expect little change in old crop corn and soybean stocks, while lower production and inventories from the 2026 harvest. Energy prices are higher as tensions in the Middle East remain elevated. Spot WTI crude oil is up $2.60 a barrel near $98.60 while trading to a new contract high. RBOB is up $.06 per gallon with HO $.04 higher. In the US precipitation has shifted south bringing a line of heavy rain stretching from KS all the way to the NE. Rain will continue to favor the central Midwest and ECB over the next week, slowing crop maturation and early harvest efforts. Week 2 of the outlook has above normal temperatures to the south with above normal precipitation for much of the nation’s midsection. Moderate to heavy rain across the interior south of Brazil with cooler than normal temperatures. Argentina is leaning warmer while mostly dry. Above normal temperatures for all of Europe with scattered rains in the East. Continued dry for much of Ukraine. The US $$ is slightly higher ahead of today’s PPI data. Producer prices are expected to have risen .3% in August while up 5.3% YOY. US stock indices are mixed.
Corn:
Dec-26 futures are $.04 higher at $5.32 while holding within yesterday’s range. Near-term support is at last week’s low at $5.26 ½. The Reuters poll expects corn production will slip to 15.785 bil. bu., down 248 mil. from the USDA est. of 16.013 bil. The average yield is expected to fall to 178.2 bpa from 180.7 bpa in August. Ending stocks are expected to slip to 1.528 bil. vs. USDA est. of 1.653 bil. Large speculative traders have been net sellers of corn the past 4 sessions, cutting their long holding back just under 400k. Today’s EIA data is expected to show ethanol production holding near 325 mil. gallons last week, vs. 326 mil. the previous week. Argentine exporters expect to ship 10 mmt of corn in Aug/Sept, more than double last year’s volume as their prices hold well below US and Brazilian FOB offers. The Rosario Grain Exchange raised their 2026/27 planting est. 200k HA to 10.6 mil. HA, still down 3.6% YOY. Brazil’s exports for September are expected to only 5.2 mmt, well below the 6.98 from Sept-25.
Soybeans:
Nov-26 beans are $.09 higher at $13.18 ½ holding just below last week’s contract high at $13.24. Oct-26 meal is up $1.90 at $347 while Oct-26 oil is up 15 points at 70.23. Crush margins are off $.04 at $2.36 with bean oil PV back below 50%. The Reuters poll predicts soybean production will slip to 4.501 bil. bu., down 18 mil. from the USDA est. of 4.519 bil. The average yield is expected to fall to 52.5 bpa from 52.7. Stocks are expected to slip to 298 mil. vs. USDA est. of 320 mil. Chinese purchases of US beans likely range from 12-13 mmt with Chinese leader Xi visit to Washington 2 weeks away. Speculative holdings in soybeans and meal at or near record length while the bean oil long position at 105k remains historically large. US Gulf FOB offers remain $.15-$.25 below Brazilian offers through the end of 2026, however both are well above offers from Argentina. The RGE lowered their 2026/27 planting est. 100k HA to 16.7 mil. HA compared to the BAGE forecast at 17 mil. HA. Brazilian exports in Sept-26 are expected to reach 7.74 mmt, vs. 6.97 YA. The prospects for higher US demand leaves little wiggle room for US yields to fall from the current 52.7 bpa forecast, or risk sharply lower stocks and even higher prices.
Wheat:
Prices range from $.01-$.04 higher in 2-sided trade overnight. CGO Dec-26 is $.03 ½ higher at $7.32 ¼, KC Dec-26 is up $.01 ½ at $8.07 ¾ while Dec-26 MIAX is $.02 higher at $7.50. Russia and Ukraine continue to target port infrastructure while Moscow hints diplomacy may lead to a peaceful solution to end the war. SovEcon lowered their Russian export forecast another 3.2 mmt to 41.4 vs. the USDA est. of 46 mmt. Sept-26 shipments are expected to reach 2 mmt. Yesterday’ Ukrainian drone attack on Russia’s port of Novorossiysk damaged a grain terminal. The RGE raised their Argentine production forecast .5 mmt to 21 mmt, matching the USDA est. The USDA FAS lowered Bangladesh’s import forecast to 6.6 mmt in 2026/27, down from 7.4 mmt YA, citing high costs. The Reuters poll shows traders expect little change in wheat stocks at 717 mil. bu. in Aug-26, vs. our estimate of 727 mil. bu.
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