Written Commentary
MORNING AG OUTLOOK
Mostly higher trade across the Ag space overnight. New month but same story as soybean oil prices surge into new highs. July-26 futures have set new contract highs for a 3rd consecutive session. Energy prices are mixed in 2-sided trade overnight as the standoff in the Middle East continues. The Straits of Hormuz remains closed while the US blockade of Iranian ports resumes. Fresh news is limited since Pres. Trump rejected Iran’s peace offer to reopen the SofH in exchange for deferring talks on Iran’s nuclear program. June-26 WTI crude oil is down $.25 near $104.80. June-26 RBOB is up $.03 per gallon while HO is steady. New contract high for RBOB for a 5th consecutive session. Lite rains in the Great Lakes regions and SW plains in the past 24 hours. Heavier amounts in E. TX and Gulf Coast region. Low’s in the mid-20’s being reported in the N. Plains. The next week will bring moderate rains for the central and ECB with heavier totals along the Gulf coast and SE. Dry for much of the WCB and N. plains. Following a recent dry stretch moderate rains are expected for EC and N. Argentina. Heat and dryness continue for Central and N. growing areas of Brazil, stressing the 2nd corn crop. Moderate to heavy rains for the South. The US $$ index is moderately lower slipping to a 2-week low. US stock indices are mixed and little changed.
Corn:
July-26 and Dec-26 are both up $.03 at $4.78 and $4.97 ¼ respectively. Both experienced 2-sided trade while holding within yesterday’s range. July-26 is still holding in its $4.50-$4.80 range with energy prices likely determine the directional breakout. Dec-26 continues to hold just below $5.00. Ethanol production has been below expectations the past 2 weeks while exports remain strong. This afternoon’s CFTC update likely to show the MM long position back above 200k contracts. The BAGE kept their Argentine production forecast unchanged at 61 mmt, well above the USDA forecast of 52 mmt. Harvest has reached 28%. The US House passed a farm bill yesterday that didn’t include the year-round sale of E-15. They are expected to vote on a standalone E-15 bill on May 13th. Corn used for ethanol production in March will be released after the close.
Soybeans:
July-26 beans are up $.06 at $12.01 ½ while Nov-26 is up $.05 ½ at $11.78 ½. July-26 meal is up $1.00 at $319.90 while oil is up 66 points at 75.20. Inside trade for July-26 beans while a new 2-year high for Nov-26. New contracts highs in bean oil with the spot contracts soaring to a fresh 3 ½ year high. Inside trade for July-26 meal. After falling $.01 yesterday, new all-time highs of crush margins up $.05 at $3.72 ½. Yesterday’s EIA data showed bean oil usage for the production of biofuels jumped 8% in Feb-26 to 1.058 bil. lbs. Oct-25 thru Feb-26 usage at 4.831 bil. Lbs. is unchanged from 24/25 vs. the USDA forecast of up 19%. Bean oil represented 44.3% of feedstock usage, up from 42.6% Jan-26 and the highest since July-23. Usage Mch-26 thru Sept-26 will need to average 1.310 bil. Lbs. per month to reach USDA est. D4 RIN generation in Mch-26 was up 35% over Feb-26, suggesting a sizeable bump up in biodiesel and RD production, and likely bean oil usage. Census crush from Mch-26 after the close is expected at 231 mil. bu. up from 214 in Feb-26 and above the 206.7 in Mch-25. Bean oil stocks are expected to slip to 2.555 bil. lbs., down from a 3 year high at 2.6 in Feb-26. The BAGE held their Argentine production forecast unchanged at 48.6 mmt, vs. the USDA 48 mmt forecast. Harvest advanced 8% to 18%.
Wheat:
Prices range from $.02 – $.06 higher in 2-sided trade. CGO July-26 is up $.05 at $6.41 ¾, KC July-26 is $.06 higher at $6.99 ½ while MIAX July-26 is up $.02 at $7.08. Winter wheat acres in drought fell 1% to 69% while Spring wheat acres in drought held steady at 18%. Export sales held up better than expected yesterday at 14 mil. bu. Old crop commitments at 907 mil. bu. are up 16% from YA, vs. the USDA forecast of up 9%. I’d expect to lower HRW crop ratings again next week.
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