Modest Gains in Feed Grains

MORNING AG OUTLOOK

Modest gains in the feed grains this AM while the soybean complex is slightly lower.  Energy prices have backed up a bit with little fresh news from the Middle East.  Early this AM President Trump reiterated that the war with Iran “should be ending pretty soon”.  The Israel/Lebanon 10-day ceasefire is expected to begin at 5 pm ET.  Iran acknowledged that Israel halting attacks on Lebanon was key to facilitating the next round of US/Iran peace negotiations.  The 2-week ceasefire between US/Iran expires next Tues. the 21^st.  Spot WTI crude oil is down $4.00 per barrel near $90.75.  Spot RBOB is down $.06 per gallon while HO is off $.21.  Sharply cooler temperatures are expected to push across the central Midwest over the next 24-36 hours with the potential for damaging storms.  Mid 20’s are expected as far south as NW Kansas before a sharp temperature rebound late in the weekend.  Rains to favor the central Midwest and ECB followed by 3-4 days of dry conditions.  Rain in Argentina will slow harvest activities.  Outside of rain in S. RGDS, mostly dry in Brazil over the next 7 days.  The US $$ index is moderately lower while US equity markets are slightly higher.  Record high close yesterday for the S&P 500 and Nasdaq, the ladder having posted its 12^th consecutive higher finish.

Corn: 

July-26 is up $.01 at $4.58 ¾ while Dec-26 is steady at $4.76 ¾.  July-26 is currently hovering near its 50-day MA at $4.59 ½.  Plantings in the SE half of the Midwest are moving along at a rapid pace with little activity in the soaked N. Midwest.  The ave US planting pace for the 19^th is 10%.  The BAGE raised their Argentine production forecast 4 mmt to 61 mmt, well above the USDA est. of 52 mmt, however still below the RGE estimate of 67 mmt.  Harvest has reached 25%.  DataGrow forecasts Brazil’s ethanol production will increase 5.3 bil liters in 2026 to 41.6 bil.  Much of that growth fueled by corn-based ethanol, up 3 bil liters to 12.8 bil.

Soybeans: 

July-26 and Nov-26 beans are both down $.03 ½ at $11.77 and $11.52 ½ respectively.  July-26 meal is down $1.00 at $327.10 while July-26 oil is down 40 points at 68.65.  Spot board crush margins surged another $.18 yesterday to $3.30 ½ bu., nearly the modern day high of $3.40 from Oct-22.  Bean oil PV recovered to 51%.  The BAGE kept their production forecast steady at 48.5 mmt while reporting harvest at 6%.  D4 RIN generation in March surged 35% to 651 mil. suggesting a surge in the production of biodiesel and RD.  The markets attention will gradually shift to Pres. Trump’s meeting in Beijing with Chinese leader Xi.  The 5-year average US planting pace for the 19^th is only 5%, a level already surpassed this past week at 6%.

Wheat: 

Prices are steady to $.02 higher in 2-sided trade overnight.  CGO July-26 is up $.01 ½ at $6.08 while KC July-26 is $.01 higher at $6.56, both holding within yesterday’s range.  KC premium over CGO traded to a new high overnight at $.50 ¾.  The Western plains and Nebraska continue to miss out on needed precipitation.  While drought in HRW areas deepens, SRW areas in drought continue to ease.  US WW areas in drought held steady LW at 68% vs only 34% YA.  Spring wheat acres in drought were steady at only 19%.

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