Written Commentary
MORNING AG OUTLOOK
Steady to lower trade across much of the Ag space overnight with most contracts experiencing 2 sided trade. Outside of some lingering showers in central Buenos Aires and S. Entre Rios Argentina was mostly dry the past 24 hours. Recent rains have greatly improved crop prospects. Precipitation over the next week to favor the west as temperatures in the east build to above normal readings. Scattered rains in Minas Gerais the past 24 hours otherwise mostly dry in Brazil. Precipitation over the next 7 days to favor the north while mostly dry in the South. Better rains are needed for the center south region to support later developing soybeans and the 2nd corn crop. In the US cooler than normal temperatures are confined to the N. Midwest and Great Lakes region. Precipitation to favor the ECB week 1 of the outlook. Lighter amounts for the central corn belt with very little moisture for the WCB and plain states. Week 2 of the outlook shows widespread warming with above normal moisture across much of the nation’s midsection. The US $$ is moderately higher holding below LW’s high. Spot crude oil is up $.50 a barrel in 2 sided trade. US stock indices higher.
Corn:
Mch-26 is up $.00 ½ at $4.28 while holding within yesterday’s range. Nearby spreads have bounced after reaching new lows yesterday. Registrations for delivery remain light at only 9 contracts. O.I. fell just over 39k contracts yesterday due to the liquidation of the Mch-26 (down 67k) contracts ahead of Friday’s FND. Dr. Cordonnier lowered his Brazilian production forecast 1 mmt to 135 mmt, due to slowed 2nd crop plantings. His estimate is still above the USDA forecast of 131 mmt, however below Conab’s 138.4 mmt.
Soybeans:
Mch-26 beans are down $.05 at $11.29 ¼ holding just above yesterday’s low. Mch-26 meal is down $1 at $307.70 while Mch-26 oil is down 16 points at 59.23, both holding within yesterday’s range. After buying 5k contracts yesterday we est. the MM long position in soybean oil is back up to 50k contracts, which if verified by the CFTC would be the largest in 6 months. The long position in soybean at roughly 164k is still shy of the Nov-25 peak at nearly 230k. O.I. yesterday was down 10k in soybeans and meal, while down only 2k in oil despite Mch-26 being down over 17k by itself. Dr. Cordonnier lowered his Brazilian production forecast 1 mmt to 178 mmt, just below the USDA’s 180 mmt however above Conab at 177 mmt. Brazilian FOB offers remain $.75-$1.10 below US Gulf out thru June-26. Although China is back from Holiday additional purchases of US soybeans would appear unlikely.
Wheat:
Prices range from $.01 higher in CGO new crop futures to $.04 lower in KC. CGO Mch-26 is steady at $5.69 ½. KC Mch-26 is down $.04 at $5.56. Jordan passed on making any purchase in today’s tender for 120k mt of wheat. After surging over $.80 bu. off the Dec-25 low, Mch-26 CGO futures at $1.40+ over Mch-26 corn has likely priced itself out of feed rations. Improved rain forecasts for the S. plains has weighed on the recent price recovery.
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