Higher as Traders Monitor Middle East Developments

MORNING AG OUTLOOK

Higher trade across the Ag space this AM as traders monitor developments in the Middle East while also weighing the potential for Chinese soybean demand.  Soybean prices closed moderately higher yesterday erasing early losses after reports China was seeking offers for US soybean for Q4-2026 and/or Q1-2027 shipment.  US FOB offers at the Gulf remain at a slight discount to Brazil.  Fresh demand from China will likely be limited to state owned entities given the 10% reciprocal tariff on US imports.  The US and Iran are set to sign a formal peace agreement Friday in Switzerland.  Energy prices have turned slightly higher after crude oil reached a 3 ½ month low overnight.  Spot WTI crude oil is up $.35 a barrel near $76.40 in 2-sided trade.  Spot RBOB is steady while HO is up $.03 per gallon.  Heavy rains across the Gulf coast in the past 24 hours while moderate rains across the central and N. Midwest.  Heavy rain will continue to impact the Gulf coast along with the central and ECB this week.  Lighter amounts for the far WCB.  Rains across central and the interior South of Brazil will continue to slow corn development and harvest.  Rains in Argentina is limited to the NE.  Western Europe remains in a hot/dry pattern.  The US $$ is moderately higher while holding within yesterday’s range.  US stock indices are steady to higher.

Corn: 

July-26 and Dec-26 are both $.05 higher at $4.18 ¾ and $4.47 ½ respectively.  Support for July-26 is at $4.05, a gap on the weekly chart from last Sept-26.  Resistance is at $4.37.  EIA data later this AM is expected to show ethanol production rebound to 330 mil. gallons up from 326 last week.  Stocks are expected to have increased to 24.6 mil. barrels.  Tomorrow’s COF report is expected to show cattle inventories at 11.726 mil. head, up 2.5% YOY.

Soybeans:

July-26 beans are $.08 higher at $11.38 while Nov-26 beans are up $.09 at $11.55 ½, both trading to 2-week highs.  July-26 meal is up $3.50 at $308.30, while July-26 oil is 18 points higher at 73.10.  Crush margins rebounded $.02 to $3.44 ½ bu. after falling $.20 yesterday.  Speculative buying yesterday in soybeans took the MM long position back up to 120k contracts with meal at 56.6k.  Selling in soybean oil took their long holdings down to 120k contracts.  O.I. in soybeans and meal fell by under 1k contracts for each while in oil it was down just over 5.5k contracts.  Anec raised their forecast for Brazilian soybean exports in June to 15.3 mmt, up from their previous forecast of 14.4 mmt.

Wheat: 

Prices range from $.06-$.09 higher.  CGO July-26 is up $.09 at $6.05 trading to a fresh 2-week high.  KC July-26 is $.08 higher at $6.42 ½ while MIAX July-26 is $.07 higher at $6.19.  Forecasts for heavy rains continue to threaten the quality of the SRW crop while also delaying early harvest efforts.  South Korea reportedly bought 60k mt of feed wheat from either the Black Sea region of the EU.  Price was reportedly executed at just under $278/mt CF for Aug/Sept shipment.  The mayor of Novorossiysk, a key Russian port city along the Black Sea, reports they were under heavy drone attack overnight.

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