Bean Oil + Wheat Upside Leaders

MORNING AG OUTLOOK

Mixed trade across the Ag Space this morning with wheat and soybean oil the leaders to the upside.  Energy prices are slightly higher as fresh news is limited.  President Trump maintains that the war with Iran “is very close to over” and that Tehran wants to “make a deal very badly”.  His social media post yesterday that China is very happy the US is permanently opening the Straits of Hormuz and that he expects a big hug from Chinese leader Xi next month when they meet in Beijing helped fuel a relief bounce across the soybean complex.  Export sales later this AM.  Spot WTI crude oil is up $.20 per barrel near $91.50.  Spot RBOB is up $.01 per gallon while HO is up $.05.  Rain continues to feed from the SE plains through the central Midwest into the Great Lakes region.  Dry in the SE while limited precipitation for the far WCB and northern Plains.  Above normal temperatures across much of the nation’s midsection will give way to dramatic cooling by the weekend.  Freezing temperatures may impact much of the northern Midwest and plain states by early next week.  Rain in Argentina will slow harvest activities.  Scattered rains in S. Brazil won’t slow the remaining soybean harvest by much.  Subsoil moisture in Mato Grosso should keep 2^nd corn crop prospects high.  The interior south however remains in a dryer than normal pattern.  The US $$$ index is slightly higher after slipping to a 7-week low overnight.  US equity markets are slightly higher after posting record closes yesterday in the S&P 500 and Nasdaq.  The Nasdaq has closed higher for 11 consecutive sessions.

Corn: 

July-26 is steady at $4.60 ½ while Dec-26 is up $.01 at $4.79.  July-26 has bounced off support at its 50 day MA at $4.59 ¼ with near term resistance at $4.68.  Export sales are expected to range from  32-70 mil. bu.  Plantings in the SE half of the Midwest are moving along at a rapid pace while not at all in the soaked N. Midwest.  Yesterday’s ethanol production at 329 mil. gallons was above expectations as processing margins remain robust.  While speculative traders were healthy buyers of nearly 18k contracts yesterday, O.I. in corn fell by just over 10k.

Soybeans: 

July-26 beans are down $.01 at $11.82 ¼ while Nov-26 is steady at $11.54 ½.  July-26 meal is down $2.50 at $328.70 while July-26 oil is up 60 points near 67.92. Spot crush margins surged $.14 yesterday to $3.12 bu., a fresh 3 ½ year high, while bean oil PV improved to 50.3%.  Margins are up a few more cents overnight.  NOPA crush at 226 mil. bu. was below expectations.  Implied census crush at 231 mil bu would bring YTD total to 1.565 bil bu, up 9% from YA vs. the revised USDA forecast of up 7%.  To reach the current USDA est. of 2.610 bil bu crush over the last 5 months of the MY will need to reach 207 mil bu, up 4% from YA.  Bean oil stocks at 2.04 bil lbs were below expectations AFTER falling from 208.8 bil the previous month.  Export sales are expected to range from 8-22 mil bu of soybeans, 300-600k tons of meal and -10 – 14k tons of oil.

Wheat: 

Early weakness could not hold as prices jumped out to $.07-$.14 gains with KC the upside leader.   CGO July-26 is up $.06 at $6.07 ¾ while KC July-26 is $.14 higher at $6.52 ½.  Algeria reportedly bought 400k mt of durum with prices ranging from $322-$334/mt CF, depending on vessel size.  Their last purchase in Dec-25 was around $315/mt.  The far W. plains and NE continue to miss out on out on needed rain.  Look for drought reading to remain elevated.  Prices will be very sensitive to weekend min. temperatures.  Export sales are expected to range from 6-18 mil bu.

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