Mixed Mostly Lower Trade in Ags

MORNING AG OUTLOOK

Mixed but mostly lower trade across the Ag space overnight as markets nervously monitor the situation in the Middle East.  Energy prices are currently higher in 2-sided trade as the 8 pm EST deadline to reach a peace agreement with Iran approaches.  Pres. Trump has threatened to bomb Iran’s bridges and power plants if an agreement to open the Straits of Hormuz isn’t met.  Both countries rejected the others cease-fire proposals yesterday.  After trading to fresh contract high overnight, spot crude oil is currently up $2.50 per barrel at $114.90.  Spot RBOB is up $.01 per gallon while HO is $.23 higher.  Much below normal temperatures across the N. Midwest and Great Lakes region before gradual warming mid-week.  Moderate to heavy rains over the next 7 days to stretch from the Southern Plains NE thru the Midwest into the Great Lakes region.  Dry in the SE where plantings should accelerate, while lighter precipitation in the N. Plains.  Rains will continue to impact C. Argentina through mid-week before a much needed dryer pattern sets up.     Brazil will continue to see a favorable mix of rain and sunshine over the next week.  The US $$$ is little changed while holding within yesterday’s range.  US equity markets are moderately lower.

Corn: 

May-26 is $.02 lower at $4.52 while Dec-26 is off $.01 ½ at $4.81 ½.  May-26 has MA support at $4.48 ½.  Plantings as of April 5^th reached 3%, just above the YA pace and 5-year Ave. of 2%.  The Reuters poll expects virtually no change in US ending stocks in Thurs. USDA WASDE update, holding near the Mch-26 forecast of 2.127 bil.  We are looking for a 25 mil bu reduction to 2.102 bil bu with exports up 50 mil. while usage for ethanol production down 25 mil.

Soybeans: 

May-26 beans are up $.01 ¼ at $11.68 while Nov-26 beans are $.01 higher at $11.58.  May-26 meal is down $1.20 at $315.40 while oil is up 44 points at 70.40 surging into new contract highs in the process.  Crush margins jumped $.11 yesterday to $2.99 ¼ bu., a new 3 ½ year high with bean oil PV a new all-time high at 52.5%.  The Reuters poll also expects no change in US soybean stocks, holding near the Mch-26 forecast of 350 mil. bu.  We are expecting a 15 mil bu cut to 335 mil due to higher crush.

Wheat: 

Prices are $.03-$.05 lower in 2-sided trade.  Early strength tied to lower than expected US crop ratings could not hold as forecasts lean for much needed precipitation across dry areas of the SW plains.  CGO July-26 is down $.03 at $6.03 ½ while KC July-26 is down $.03 ¾ at $6.20.  Winter wheat ratings at only 35% G/E were below expectations and a 3 year low, well below the 48% from YA.  Spring wheat plantings at 2% were in line with expectations and just below YA pace and 5-year ave at 3%.  The Reuters poll shows analysts expect US wheat stocks will slip to 923 mil bu down from 931 mil. in Mch-26.  We see no changes this month.

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