Written Commentary
MORNING AG OUTLOOK
Happy Friday ! Mostly lower trade overnight as corn and soybean prices slip back from their midweek highs. Wheat remains the shining star in the Ag space with prices slightly higher. The US $$$ is slightly higher while energy prices, metals and US equity markets are lower. The BAGE confirmed lower corn and soybean ratings in Argentina driven by recent heat and dryness across central and southern growing areas. Temperatures pull back to more seasonal levels this weekend with improved chances for rain next week. Normal to above normal precipitation for central and northern growing areas of Brazil, favorable for late developing crops however slowing harvest operations. Scattered showers in the south to bring some relief from recent hot/dry conditions. Frigid temps across the NC Midwest is gradually losing its grip. Extended forecasts lean above normal temps in the west, below normal in the east with a dryer than normal outlook across the nation’s midsection.
Corn:
Mch-26 is down $.02 at $4.29 with the overnight low matching yesterday’s at $4.28. Major MA resistance just below $4.40. The BAGE places Argentine plantings at 97% complete. Crop ratings slipped to 46% G/E, well below the season high at 82% however better the 31% from YA. US exports remain strong, on pace to exceed the current USDA est. of 3.2 bil. bu. however more aggressive offers from Argentina may cut into US market share the 2nd half of the MY. Price likely to remain range bound between $4.15-$4.40 until more is known about SA crops.
Soybeans:
Mch-26 beans are down $.05 ½ near $10.67. Support is at this week’s low at $10.58 ½. Price have rejected trade above their 100 day MA the past 2 sessions. Mch-26 oil is down 50 points just above 53.50 while carving out a new low for the week. Mch-26 meal is slightly lower at 295.50. Monthly biodiesel and RD production, capacity and feedstock usage data out later today. Census crush from Dec-25 after the close on Monday is expected to come in just above 230 mil. bu., which if realized would be the 2nd highest ever and up from 220.5 mil. in Nov-25. Oil stocks expected to jump 5% to 2.279 bil. lbs. O.I. was higher across the complex yesterday on modest speculative selling. Argentine crop ratings fell 6% to 47% G/E, still well above the 24% from YA. I lean toward another 20-30 mil. bu. cut to the current USDA export forecast of 1.575 in the Feb-26 WASDE.
Wheat:
Prices range from $.01 lower to $.03 higher. CGO Mch-26 is up $.03 at $5.44 ½ while trading to a fresh 2 month high. KC Mch-26 up $.03 at $5.50 also a 2 month high. Open interest in CGO rose just over 300 contracts yesterday as speculative traders were net buyers. O.I. rose nearly 4k in KC futures. US winter wheat area in drought fell only 1% LW to 41% despite the major winter storm. Little to no moisture for the S. plains over the next week. Moderate amounts for the S. Midwest and ECB. US export demand remains decent however not likely to exceed the current USDA est. by more than 10-20 mil. bu.
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