Soaring Energy Prices Cont to Drive Ags

MORNING AG OUTLOOK

Soaring energy prices continue to drive strength across the agricultural space.  Inflationary implications from higher energy costs continues to fuel speculative buying.  Spot crude oil is above $100 per barrel for the first time in nearly 4 years.  With the Straits of Hormuz remaining closed Middle East oil producers are slashing production.  Oil prices have come off their highs however as G7 nations consider tapping strategic reserves.  Overnight highs for Light Sweet crude are roughly $10 a barrel shy of the 2022 high near $130 per barrel.  Spot RBOB futures are above $3 gallon for the first time since 2022 while spot heating oil also spiked to a 3 ½ year high.  Analysts expect little change in US ending stocks in tomorrow’s USDA WASDE report.  Rains have brought relief to much of Argentina’s crop areas with the exception of S. Buenos Aires which is expected to hold in a dryer than normal pattern for the next week to 10 days.  Beneficial moisture is expected for S. Brazil over the next few weeks.  Central areas of MGDS and Parana still need soaking rains before the end of their monsoon season in April.  Good rains continue to ease drought areas in the central and ECB.  Scattered rains at best for the WCB and SW plains.  The US $$ is moderately higher.  US stock indices are down about 1.0%.

Corn: 

May-26 is up $.05 ½ at $4.66 after hitting a 10 month high.  New crop Dec-26 is up $.06 at $4.90 ½ with the overnight high just below $5.00 bu.  The MM long position is the largest since May-2025.  IMEA reports corn plantings in Mato Grosso have reached 94%, just shy of the 96% pace from YA.  APK Inform forecasts Ukraine corn production in 2026 will reach 31.8 mmt, up from 30.9 mmt in 2025.

Soybeans: 

May-26 beans are up $.14 ½ at $12.15 ¼ the highest since Dec-23.  May-26 meal is up $1.50 at $318.70 while May-26 oil is up another 150 points just above $.68 lb.  New contract high for May-26 oil overnight as it looks to extend a higher close to a 11^th consecutive session.  A 2 ½ year high on the weekly chart.  Spot board crush margins are up another $.05 at $2.34, the highest since Oct-23.   Bean oil PV holding near all-time highs just below 52%.  US Treasury Sec. Bessent and Ambassador Greer are expected to meet with Chinese trade officials in Paris next weekend ahead of Pres. Trump/Xi meeting in Beijing in late March.  Unlikely we’ll see additional Chinese buying of US beans with Gulf FOB offers running $.90-$1.30 over Brazilian offers into the summer months.  Look for some shifting of bean oil demand away from biofuels into other domestic usage and/or higher stocks.  No big changes expected for SA production.  IMEA reports soybean harvest in Mato Grosso has reached 89%, just shy of the 92% pace from YA.

Wheat: 

Prices range from $.05 to $.09 higher.  CGO May-26 is up $.05 at $6.21 ¾.  The overnight surged stopped just shy of the June-25 high near $6.45.  KC May-26 is up $.06 at $6.29 ½ after jumping out to a 11 month high.    APK Inform forecasts Ukraine wheat production in 2026 at 20 mmt, down from 23.2 mmt in 2025.  Algeria is seeking 50k mt of soft wheat in a tender that closes tomorrow.

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