Wheat Futures The Leader to The Upside

MORNING AG OUTLOOK

Mixed trade across the Ag space this AM with wheat the leader to the upside.  While much of the nation’s midsection will see moderate to heavy rainfall over the next week, some areas in the SW plains will likely remain arid.  2-3” rainfall totals are expected across the Delta along with the Southern and Central Midwest.  Healthy rain is also expected for dry areas in the SE and Nebraska with lighter amounts for the N. Plains.  Much of the central and northern Midwest will shift into a cooler than normal temperature pattern into early May.  Energy prices are mixed and little changed as war headlines remain scarce.  While the US/Iran ceasefire has held, the Straits of Hormuz remains mostly closed while peace talks appear to be on hold.  June-26 WTI crude oil is steady at $92.96.  Spot RBOB is down $.02 per gallon while HO is off $.04.  Argentina looks mostly dry into month-end supporting harvest activities.  Rains in Brazil will favor the interior south where it is most needed.  Much of the central and northern growing areas turn hot/dry.  The US $$ index is slightly higher after stretching out to a 2-week high.  US stock indices are moderately lower following record high closes yesterday in the Nasdaq and S&P 500.

Corn: 

July-26 and Dec-26 are both $.00 ½ higher at $4.63 ¼ and $4.82 ¾ respectively, with both holding within yesterday’s range.  For now July-26 remains rangebound between $4.50-$4.80.  Export sales are expected to fall between 40-75 mil. bu.  The BAGE to update Argentine harvest progress this afternoon, likely coming in around 30-35%.  The USDA production forecast at only 52 mmt, well below SA forecasts for over 60 mmt.  US lawmakers continue to make a push for the year-round sale of E-15.  While the pace to US planting will be slower than normal the last week of April they will likely remain above their historical average.

Soybeans: 

July-26 beans are down $.02 at $11.77 ½ while Nov-26 is $.01 lower at $11.55 both hold near yesterday’s low.  July-26 rejected trade above $12 yesterday.  After reaching fresh contract highs yesterday July-26 oil is down 23 points at 70.77.  July-26 meal is up $1.00 at $317.30 while holding within yesterday’s range.  Spot board crush margins back up a few cents yesterday to $3.29 ½ bu. while bean oil PV improved to a new all-time high at 52.8%.  Export sales are expected to range from 8-26 mil. bu. of beans, 150-500k tons of meal and -10-14k tons of oil.  Speculative traders turned moderate sellers across the soybean complex yesterday.  On Friday I expect the CFTC will print another record large long position held by MM’s in soybean oil, and a combined record large long position across the complex.  The markets attention will start shifting to Pres. Trump’s meeting in Beijing with Chinese leader Xi next month.  Without additional Chines purchases the USDA export forecast will likely need to be lowered again, which will likely again be offset by higher crush.

Wheat: 

Prices range from $.03-$.08 higher.  CGO July-26 is up $.05 ½ at $6.12 ½, KC July-26 is $.08 lower at $6.58 while MIAX July-26 is up $.03 at $6.84.  Early ideas on US winter wheat production is just below 1.20 bil. bu., a 4-year low and compares to 1.329 bil. YA.  Export sales are expected to range from 6-18 mil. bu.  For HRW futures (KC) to test the $7.00 level would likely take production falling below 600 mil. bu. vs. 804 mil.  SovEcon raised their Russian wheat production forecast 2.1 mmt to 89.7 mmt, of which 66.7 mmt is WW.  The BAGE forecasts Argentine wheat planting will drop 3% in 2026 to 6.5 mil. HA citing higher fertilizer costs weighing on profit margins.

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