Surging Soybean Oil Prices

MORNING AG OUTLOOK

Surging soybean oil prices has provided a boost across the Ag space overnight.  Bean oil strength is being driven by lower than expected stocks in yesterday’s monthly crush report, a potential trade deal with India and unconfirmed rumors of a potential announcement on Z45 tax credits.  Yesterday the Trump Admin. announced the lowering of tariffs on imports from India from 25% to 18% in exchange for India halting the purchase of Russian oil and increasing the purchase of US energy, technology and agricultural goods.  Bean oil would likely be the largest benefactor of increased demand from India.  Dry areas in EC Argentina may see some relief this week in the form of scattered showers however likely not enough to erase moisture deficiencies.  Corn and soybean production estimates likely to start falling.  Mostly favorable conditions in Brazil with higher production offsetting a lowered outlook from Argentina.       In the US 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 continental US however normal to below normal temps still linger in the Great Lakes region and NE.  Spot crude is up $.40 a barrel.  US $$$ is steady while equity markets are slightly higher.

Corn: 

Mch-26 is up $.02 at $4.27 ¾ while holding within yesterday’s range.  There was just over 488 mil. bu. of corn used for the production of ethanol in Dec-25, while above the average trade guess it was largely offset by a downward revision to the previous months usage.  Dec-25 usage was up 1.8% YOY and brought cumulative usage in the first 4 months of the 25/26 MY to 1.863 bil. bu., up less than 1% from YA vs. the USDA est. of up 3%.  Prices remain rangebound $4.15-$4.40.

Soybeans: 

Mch-26 beans are up $.09 ½ at $10.69 ¾.  MA resistance near $10.82.  Mch-26 oil is up 150 points at 54.70, just below the January high of 54.95.  Mch-26 meal is down $1.90 at $292.60 while holding yesterday’s low.  Census crush in Dec-25 at just under 230 mil. bu. was in line with expectations and the 2^nd highest ever, just below the 236 mil. from Oct-25.  Cumulative crush in the first 4 months of the 25/26 MY at 892 mil. bu. are up 7.4% from YA vs. the current USDA forecast of up 5%.  Crush will need to reach 1.678 bil. bu. Jan thru Aug. to reach the current USDA forecast vs. 1.615 bil. YA.  Bean oil stocks at 2.179 bil. lbs. while up 29% from YA were below the range of expectations after a 209 mil. lb. reduction to Nov-25 stocks down to 1.955 bil. lbs.  India’s palm oil exports jumped to a 4 month high in Jan-26 to 766k mt while bean oil imports fell 45% to only 280k mt, the lowest since June-24.

Wheat:

 Prices range from steady to $.02 higher across the 3 classes.  Inside trade for CGO Mch-26 with the overnight high capped at its 100 day MA.  Inside trade for KC Mch-26 with MA support near $5.26.  Little to no moisture for the plain states this week however both the 6-10 and 8-14 day outlooks look for above normal precipitation.  Russian exports in Jan-26 have been trimmed to 2.5-3.0 mmt due to poor weather.  Winter wheat conditions in Kansas improved 1% over the past month to 61% G/E.  Conditions improved in CO while falling in OK, TX, MT, NE and SD.

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