Higher Trade Comes Ahead of USDA + WASDE Updates

MORNING AG OUTLOOK

All green on the screen this AM after US forces launched “self-defense strikes” against Iran in retaliation for downing a US helicopter a day earlier.  The higher trade comes ahead of tomorrow’s USDA production and WASDE updates.  While Iran has not claimed responsibility for the downed helicopter the increased tensions do threaten the fragile ceasefire agreement.  Oddly enough energy prices were little changed having traded both sides of unchanged overnight.  Spot WTI crude oil is currently up $1.50 per barrel near $89.70.  Spot RBOB is up $.02 a gallon while HO is $.05 higher.  Overnight wheat is the upside leader as speculative traders lighten up on recently established short positions while heavy rains across the S. Midwest threaten the winter crop just ahead of this year’s harvest.  Rainfall the past 24 hours has been heaviest across S. IN and the Ohio Valley region with widespread but lighter amounts across the WCB and N. plains.  Rain is expected to be widespread over the next week favoring the central and southern Midwest, with lighter amounts in the N. plains.  Much cooler temperatures are expected by early next week.  Rain in central and the interior south of Brazil this week will benefit their 2nd crop corn.  Dry conditions in Argentina will improve corn harvest opportunities.  The US $$ is slightly higher while US stock indices are lower.

Corn: 

July-26 and Dec-26 are both $.04 higher at $4.23 ½ and $4.49 ¼ respectively.  Support for July-26 is near $4.05 with resistance at $4.41.  The trader expects little change in corn stocks (old and new crop) and new crop production in Thursday’s USDA updates.  Today’s EIA data is expected to show ethanol production LW increased to 327 mil. gallons, up from 326 the previous week, however if realized would still be below the pace needed to reach the USDA corn usage est. for an 8th consecutive week.  Conab will also update their Brazilian production forecasts tomorrow.

Soybeans: 

July-26 beans are $.05 ½ higher at $11.19 ¼ while Nov-26 beans are up $.05 at $11.37.  July-26 meal is up $2.40 at $303.50 while July-26 oil is up 10 points at 75.01.  Crush margins rebounded $.01 ½ overnight to $3.74 bu.  After raising crush 20 mil. last month and lowering exports 10 mil. I’m looking for no changes this month with stocks holding near 340 mil. bu., in line with the average trade guess.  No changes expected for 2026 production or stocks.  Still on the lookout for fresh Chinese demand interest in US soybeans.  US FOB offers at the Gulf are steady with Brazil by Sept-26 while at a slight discount by Oct-26.  Anec has raised their forecast on Brazilian exports in June by 2 mmt to 14.38 mmt which if realized would be a record high for the month.

Wheat: 

Prices range from $.08-$.11 higher.  CGO July-26 is up $.11 at $5.96 ¼ after briefly trading above the $6 level and its 100-day MA resistance at $5.99.  KC July-26 is $.09 ¼ higher at $6.40 while trading to its highest level in a week.  MIAX July-26 traded to a 3 ½ month low before rebounding, currently up $.08 at $6.25 ½.  I’ve got all wheat production at 1.553 bil. down 8 mil. from May.   Also supporting wheat prices are reports from Ukraine’s largest farmer union UAC stating that damage to grain export terminals along the Black Sea from Russian missile attacks have been extensive and may threaten shipments of key agricultural goods.

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