Prices Turn Mostly Higher Ahead of Quarterly Stocks Report

MORNING AG OUTLOOK

Prices have turned mostly higher across the Ag space this AM ahead of tomorrow’s quarterly stocks and annual Small Grain Summary.  Traders expect minimal change to US wheat production and 2025/26 corn and soybean ending stocks.  Yesterday’s lower trade was driven by speculative selling following Sunday’s announced US/China Board of Trade agreement that didn’t lower Chinese tariffs on US soybean imports.  Open interest across the Ag. space was also lower, suggesting speculators exiting long positions.  No surprises in USDA updates on crop progress/conditions.  Energy prices are lower in 2-sided trade overnight as markets continue to monitor potential US/Iran peace negotiations.  WTI Nov-26 crude is down $1.70 a barrel at $90.90, RBOB is down $.06 per gallon with HO off $.10.  Rain continues to impact the WCB and plain states while the C. Midwest and ECB experience favorable harvest conditions.  That pattern looks to hold for a few more days before precipitation shifts east.  Widespread moderate to heavy rain will continue to slow process in the WCB until dryer conditions settle in late this week.  Week 2 of the outlook brings below normal precipitation across much of the nation’s midsection.  Heavy rains in S. Brazil have led to localized flooding.  Widespread, but more moderate rains in Argentina.  Precipitation over the next 7 days will continue to favor S. Brazil with scattered showers in the WC region.  Seasonally warm for nearly all of Europe with rains favoring the west.  The US $$ is moderately higher stretching out to a 2-month high.  US stock indices are mixed and little changed.

Corn: 

Dec-26 futures are up $.02 ½ at $5.25 ½ while holding within Monday’s range.  O.I. was down 5.4k contracts.  Crop conditions held steady at 57% G/E.  Overall ratings held at the crop cycle lows and just below the historical average.  Ratings fell 12% in PA, 8% in CO and 3% in OH.  Ratings improved 3% in IL and 2% in KY, NE and SD.  96% of the crop is dented while 72% is mature, both slightly above YA and the 5-year Ave.  Harvest has reached 18%, matching the 5-year Ave. while just above the YA pace of 17%.  Updated ratings suggest an average US yield of 178.3 bpa with production at 15.784 bil bu up 10 mil from last week while just below the USDA forecast at 15.80 bil bu.  The Reuters survey shows analysts expect Sept. 1^st US corn stocks at 1.918 bil bu vs. 1.551 bil YA and down slightly the USDA Sept-26 WASDE estimate of 1.922 bil.

Soybeans: 

Nov-26 beans are up $.04 at $12.92, Oct-26 meal is down $1.70 at $360 while Oct-26 oil is up 74 points at 67.85.  Inside trade for Nov-26 beans with next major support at its 50-day MA currently at $12.55.  Soybean O.I. was down 19.4k contracts, meal was off just over 16k while oil was down 22.5k.  Crush margins are up $.01 at $2.48.  Crop conditions held steady at 58% G/E.  Composite ratings remain at crop cycle lows while just above the historical average.  Ratings improved in 6 states, declined in 8 while holding steady in 4.  75% of the crop is dropping leaves matching the 5-year Ave. while just below 76% YA.  Harvest has reached 17%, also matching the 5-year Ave. while just below the 18% pace from YA.  Updated ratings suggest an average US yield of 52.5 bpa with production at 4.508 bil. bu. down 3 mil. bu. from last week while below the USDA forecast of 4.535 bil.  The Reuters survey shows traders expect Sept. 1^st US bean stocks at 324 mil. bu. vs. 325 mil. YA which was also the USDA Sept-26 WASDE estimate for 25/26 ending stocks.  AgRural places Brazil’s soybean plantings at 3.4% just above the YA pace of 3.2%.

Wheat: 

Prices range from $.01-$.08 lower.  CGO Dec-26 is down $.01 ¼ at $6.87 ½ with near term support at its 100-day MA of $6.76.  Dec-26 KC is off $.07 ½ at $7.38 ¼, with 100-day MA support at $7.27 ½.  Dec-26 MIAX is down $.01 at $7.01 having slipped to a 6-week low.  CGO wheat O.I. was down 2k contracts, while KC was off 3.4k.  Ukraine’s Ag Minister stated his country feels there will be no cease fire for Black Sea shipping for several months.  IKAR estimates Russia was able to ship 2.3 mmt of wheat in Sept-26, up from recent estimates of 2.1-2.2 mmt.  The Reuters survey shows traders expect all US wheat production at 1.524 bil bu, down from 1.531 bil in Aug-26.  Sept. 1^st stocks are expected at 1.872 bil, well below the 2.134 bil YA.  WW plantings advanced 10% to 27%, below the 32% pace from YA and the 5-year Ave. of 34%.  8% of the crop has emerged vs. the 5-year Ave. of 11%.  Rains in the plains will continue to help ease drought conditions.

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