Overnight Highs in Ags Couldn’t Hold

MORNING AG OUTLOOK

Higher trade overnight couldn’t hold as prices are lower across the Ag space this AM.  Same story for energy markets as June-26 contracts in crude oil, RBOB and heating oil all trading lower after establishing new contract highs overnight.  The standoff in the US/Iran conflict continues.  The Straits of Hormuz remains closed as the US blockade of Iranian ports continues.  Fresh news is limited since Pres. Trump rejected Iran’s most recent peace proposal to reopen the SofH in exchange for deferring talks on Iran’s nuclear program.  June-26 WTI crude oil is down $2.50 near $104.30.  June-26 RBOB is down $.04 per gallon while HO is down $.02.  Moderate to light precipitation across the ECB and Great Lakes region the past 24 hours.  Heavy totals across the Gulf Coast.  Even some moisture for E. CO and W. Kansas overnight.  Scattered frost/freeze across the N. Midwest.  Rainfall into early next week will favor the Gulf Coast lighter amounts for the central and ECB.  Dry for much of the WCB and N. plains.  The recent dry stretch has benefited harvest in Argentina.  Rains in S. Brazil this week while central and N. growing areas remain hot/dry stressing the 2^nd corn crop.  Export sales later this AM.  EIA data on biofuel production, capacity and feedstock usage data also expected during today’s trade.  The US $$ index is sharply lower after the Fed held rates unchanged.  US stock indices are moderately higher, supported by strong corporate earnings.

Corn: 

July-26 and Dec-26 are both down $.02 ¼ at $4.75 ½ and $4.95 ½ respectively.  Both traded at new highs for the month with July-26 not able to penetrate the upper end of its $4.50-$4.80 range while Dec-26 held just below $5.00.  Deliveries against May-26 corn were 19 contracts.  Ethanol production has been below expectations the past 2 weeks.   Export sales for old and new crops are expected to range from 25-90 mil. bu.  Heavy rains from earlier this week will likely not slow corn plantings for long.

Soybeans: 

July-26 beans are down $.04 ½ at $11.92 ½ while Nov-26 is down $.04 at $11.67 ¼.  July-26 meal is down $4.00 at $319.80 while oil is off 40 points at 73.72.  July-26 beans traded to a 6-week high while failing to hold trade above $12.  Nov-26 beans reached a 2-year high before pulling back.  New contracts highs in bean oil with the spot contracts soaring to a fresh 3 ½ year high before pulling back.  July-26 meal has so far held support at its 50-day MA at $319.60.  Spot board crush margins have pulled back $.09 overnight to $3.59 bu. while bean oil PV sitting at new all-time highs at 53.6%.  There were no deliveries against May-26 beans or meal while only 400 against May-26 oil.  Export sales are expected to range from 8-24 mil. bu. for beans, 150-400k tons of meal and -10-12k tons of oil.

Wheat: 

Prices range from $.04 lower in MIAX to $.13 lower in KC.  Yesterday’s weak close has spilled over into today’s trade.  CGO July-26 is down $.09 at $6.44, KC July-26 is $.13 lower at $6.91 ¾ while MIAX July-26 is off $.04 at $7.12.  I’d expect today’s updated drought monitor to show minimal change to WW acres in drought with expanded drought reading in spring wheat areas.  Deliveries against CGO wheat were 400 contracts while 578 for KC wheat.  Export sales are expected to range from 0-18 mil. bu.  Look for sales to gradually tail off as US wheat has essentially priced itself out of the global marketplace.

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