Sharply Lower Energies Weighs on Commodity Valuations

MORNING AG OUTLOOK

Mostly lower trade overnight as sharply lower energy prices weigh on commodity valuations.  Spot crude oil is down over $3 per barrel as tensions with Iran have eased.  The US $$$ is moderately higher while US stock indices are lower.  While January was very dry across EC growing areas of Argentina and S. Brazil better prospects for rain this week could provide some much needed relief.  Mostly dry across the central Midwest this week with showers favoring the Delta and ECB.  Virtually no precipitation for the Central and Southern plains.  Gradual warming for much of the nation’s midsection however normal to below normal temperatures still linger in the Great Lakes region and NE.  Friday’s CFTC data showed MM’s were active buyers across the Ag. space in the week ended Tues. Jan. 27^th while index funds were net sellers.  Gold and silver have rebounded currently trading higher after a sharply lower open overnight.

Corn: 

Mch-26 is down $.02 at $4.26 ¼.  Prices briefly traded below last week’s low.  Usage for ethanol production in Dec-25 will be released after today’s close.  The Ave. est. is 475 mil. bu. which would be down from 480 mil. bu. in Dec-24.  AgRural est. as of Thurs. Jan. 29^th Brazilian farmers have planted 13% of their 2^nd corn crop while harvest for the 1^st crop has reached 10%.  US cattle inventories as of Jan. 1^st fell .4% YOY to 86.2 million, the lowest since 1951.

Soybeans: 

Mch-26 beans are down $.05 at $10.59 ¼ , well off session lows at $10.51 ¾.  Next support is at the January low at $10.37 ¾.  Mch-26 oil is down 54 points just below $.53 lb., also well above overnight lows.  Mch-26 meal has recovered currently up $.70 at $294.30.  Census crush from Dec-25 after today’s close is expected to come in just above 230 mil. bu., which if realized would be the 2^nd highest ever and up from 220.5 mil. in Nov-25.  Oil stocks expected to jump 5% to 2.279 bil. lbs.  AgRural estimates soybean harvest in Brazil has reached 10% as of last Thursday.  Still awaiting monthly data from the EIA on biodiesel and RD production, capacity and feedstock usage data.

Wheat: 

Prices range from $.03-$.05 lower across the 3 classes.  CGO Mch-26 is down $.04 ½ at $5.33 ½.  KC Mch-26 down $.05 at $5.39 ¾.  MM’s bought 16k contracts of CGO wheat the week ended Jan. 27^th cutting their net short position to 95k contracts.  They also bought nearly 3k KC cutting that short position to 10k contracts.  Little to no moisture for the plain states this week.  US export demand remains decent however not likely to exceed the current USDA est. by more than 10-20 mil. bu.  Wire services report Taiwan purchased just over 106k mt of US milling wheat for spring shipment.

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