Written Commentary
MORNING AG OUTLOOK
Surging energy prices triggered by the US/Israeli attack on Iran, which claimed the life of their Supreme Leader Ayatollah Ali Khamenei, has fueled another wave higher in soybean oil prices. Other areas of the A. space have turned mixed. Spot crude oil is up $5.25 per barrel after trading above $75 for the first time since June-25. This weekend’s military action has led to the closure of the Straits of Hormuz where 20 mil. barrels, 20-25% of the worlds trade, moves per day. Mostly dry this weekend across Brazil, favorable for soybean harvest and 2nd corn plantings. Rains this week will favor the northern growing areas. Soaking rains will be needed across the SC region ahead of the upcoming dry season. Mostly dry across Argentina this weekend with seasonable temperatures. Rains this week to favor western and northern growing areas while the EC and southern growing areas lean drier. Waves of precipitation are expected to move across the US midsection this week. Heaviest totals across the SE plains along with the central and ECB will help ease drought concerns ahead of spring plantings. Mostly dry in the SE. Limited rains for the SW and northern plains. Above normal temperatures will cover much of the nation’s midsection by mid to late week. The US $$ jumped out to a 6 week high peaking at its 100 day MA. US stock indices down just over 1%.
Corn:
May-26 is up $.01 ½ at $4.50 after trading to a 7 week high overnight. Deliveries against the Mch-26 contracts surged to 448 contracts, up from only 9. After heavy speculative buying on Friday I suspect MM’s have flipped around to net long corn for the first time this year. IMEA reports 82% of Mato Grosso’s 2nd corn crop has been planted vs. 86% YA. AgRural reports 2nd corn plantings have reached 66% for the entire country, up from 50% the previous week.
Soybeans:
May-26 beans are down $.06 at $11.64 ¾, down from the overnight high of $11.85. May-26 meal is off $7.20 at $313.30 with oil up 175 points at 63.60. New contract high for May-26 oil while the spot contract has traded to a 2 ½ year high. On Friday Safras & Mercado lowered their Brazilian production forecast 1.5 mmt to 177.7 mmt, while today AgRural lowered their forecast 3 mmt to 178 mmt. Both are just below the USDA est. of 180 mmt. AgRural reports soybean harvest has reached 39%. IMEA reports harvest in Mato Grosso has reached 78% vs. 82% YA. Spot board crush margins ended LW at $2.11 bu. up $.19 for the week and their highest level since Aug-25. Bean oil PV is over 50% with the overnight strength. Jan-26 crush is expected to reach 226.4 mil. bu. vs. 212.6 mil. YA. Bean oil stocks are expected to rise to just over 2.4 bil. lbs. well above the 1.817 in Jan-25. China has formally denounced the US/Israeli military action in Iran which may jeopardize the Trump/Xi meeting later this month in Beijing.
Wheat:
Prices range from $.02 lower in CGO to $.05 higher in KC. CGO May-26 is down $.02 at $5.89 ½. KC May-26 is up $.04 at $5.84 ½. MM’s bought a record amount of wheat in the week ended Feb. 24th at nearly 51k contracts, however were still net short 17k. MM’s bought nearly 15k contracts of KC futures flipping their net position to net long for the first time since Aug-23. Saudi Arabia bought nearly 800k mt of wheat for May/June shipment. Prices reportedly ranged from $265.60-$283/mt CF, while likely sourced from Russia or other Black Sea origins.
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