Crop Ratings Failed to Show Expected Improvement

MORNING AG OUTLOOK

Mostly higher trade across the Ag space overnight as crop ratings failed to show expected improvement.  Soybean oil prices are weaker in sympathy with lower energy prices while wheat prices firm on expectations for low US production.  For now Iranian military stikes on Israel remain on hold however they warned strikes may continue if Israel continues military operations in Lebanon.  Israeli PM Netanyahu stated the conflict with Iran and Hezbollah was “not over yet.”  Spot WTI crude oil is down $1.75 per barrel near $89.55.  Spot RBOB is down $.01 a gallon while HO is off $.02.  US weather remains mostly favorable however isolated areas of flooding are occuring in the central midwest.  Even some areas of W. NE picked up some moisture bringing much needed drought releif.  Rains over the next week will favor the central midwest and SE plains with lighter amounts for the WCB and Delta region.  Much of the nation’s midsection is expected to hold in an above to much above normal temperature pattern for another 4-5 days before much cooler temperatures by early next week.  Rains in central and the interior south of Brazil this week will benefit ther 2^nd crop corn.  After weekend rains in Argentina a dryer outlook this week will improve corn harvest opportunities.  The US $$ is moderately lower while US stock indices are higher.

Corn: 

July-26 and Dec-26 are both $.03 higher at $4.21 ¾ and $4.49 respectively.  Support for July-26 is near $4.05.  Plantings advanced 4% to 97% just above YA and the 5-year Ave. of 96%.  PA is the only notable delay with 70% of the crop planted vs. 5-year Ave. of 84%.  Ratings held steady at 67% G/E, however there was a 2% shift from good to excellent.  Overall ratings are a touch below their historical average.  Emergence at 86% is in line with YA and the 5-year Ave.  Traders expect little change in corn stocks (old and new crop) and new crop production in Thursday’s USDA updates.

Soybeans: 

July-26 beans are steady at $11.15 ¾ while Nov-26 beans are up $.01 ½ at $11.37.  July-26 meal is up $4.00 at $306.70 while July-26 oil is steady.  Crush margins rebounded $.06 ½ overnight to $3.77 bu.  After raising crush 20 mil last month and lowering exports 10 mil.  No changes expected for 2026 production or stocks.  Still on the lookout for fresh Chinese demand interest.  Chinese soybean imports in May-26 at 11.8 mmt were down 15% from the 13.92 mmt purchased in May-25 however were slightly above expectations.  Their Jan-May imports at 36.94 mmt vs. 37.1 mmt YA.  Soybean plantings at 92% are just above YA at 89% and 5-year Ave. of 88%.  Emergence at 79% is well above YA at 73% and the 5-year Ave. of 71%.  Ratings slipped 1% to 65% G/E as there was a 1% shift from good to poor.  Expectations were for a slight increase in ratings.  Overall conditions are slightly below their historical average.

Wheat:

 Prices are $.03-$.07 higher.  CGO July-26 is up $.07 at $5.90 ¼, KC July-26 is $.06 higher at $6.35 ¾ while MIAX July-26 is up $.03 at $6.22 ½.  Too much rain across portions of the S. Midwest may trigger disease and quality issues with the winter crop.   Winter wheat ratings dipped another 1% to 25% G/E.  There was a 2% increase in the crop rated poor/VP, now up to 46%.  Overall ratings are the lowest of the crop cycle and the lowest in 20 years.  Ratings in KS fell 1% to only 15% G/E.  57% of the crop in KS is rated poor/VP.  Nationally 92% of the crop is headed, vs. 87% YA and 5-year Ave. of 85%.  My model is forecasting an Ave. yield at 46.8 bpa vs. the May-26 USDA forecast of 47.6 bpa.  Harvest at 11% is well above YA at 4% and the 5-year Ave. of 6%.   Spring wheat plantings are virtually complete at 98%.  Emergence at 87% is above the historical average.  52% of the crop is rated G/E, up 5% from last week while trailing the 53% G/E from YA.

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