Lower Ag Trade As Energy Prices Calmed

MORNING AG OUTLOOK

Lower trade across the Ag space overnight as energy prices have calmed heading into the weekend.  Spot crude oil is currently down $2.25 a barrel near $93.50 in 2 sided trade.  RBOB futures are off $.04 per gallon with heating oil is down $.06.  While the Straits of Hormuz remains closed the Trump Administration temporarily lifted sanctions on Russian crude oil already at sea in an effort to ease supply disruptions.  Forecasts for South America are mixed.  While dry across SE Argentina this week, showers are expected to develop over the weekend and into next week providing benefit to later maturing crops.  Rains in Brazil continue to favor central and northern growing areas with only scattered moisture for the SC region and RGDS.  Better prospects for showers across the south in week 2 of the outlook however confidence is low.  In the US powerful winds are expected to impact the nation’s midsection this weekend.  Blizzard conditions and heavy snow potential for the upper Midwest.

Only scattered precipitation for the northern plains and WCB.  Dry in the SW plains.  Above normal temperatures in the west are expected to slide across the central Midwest and ECB in week 2 of the outlook.  The US $$ is moderately higher while reaching a 4 month high.  US stock indices are slightly higher.

Corn: 

May-26 is down $.02 at $4.60 ½ while Dec-26 is down $.03 ½ at $4.86 ½.  Exports remain strong with YTD commitments up 32% from YA, vs. USDA forecast of up 15.5%.  The BAGE reports Argentine corn harvest has reached 9.4% while holding their production forecast steady at 57 mmt.  Huge range of estimates with USDA at 52 mmt while RGE is at 62 mmt.  Markets await Brazilian production updates from Conab.  US corn acres in drought fell 5% LW to 46%.  Expect further easing next week.

Soybeans: 

May-26 beans are down $.10 at $12.17 ¼ while Nov-26 is off $.06 at $11.61 ½.  May-26 meal is down $2.70 at $317.50 holding within yesterday’s range.  May-26 oil is down 20 at 67.22.  The BAGE reports Argentine soybean conditions improved 2% to 76% G/E while holding their production forecast unchanged at 48.5 mmt, just above the USDA est. of 48 mmt.  Yesterday US Treasury Sec Bessent confirmed he and USTR Greer were meeting Sunday/Monday with Chinese trade officials in Paris, this ahead of Pres. Trump/Xi meeting in Beijing later this month.  Speculative buying in the complex is pushing their holdings close to record levels.  Bulls remain hopeful for fresh Chinese purchases despite US Gulf FOB offers pushing out to $1.20-$1.50 over Brazilian offers.  Recent news that Cargill has paused Brazilian soybean shipments to China over changes to their inspection procedures caused that gap to widen.  US soybean exports are down 19% YTD vs. the USDA forecast of down 16%.  US soybean acres in drought fell 6% to 47%.

Wheat: 

Prices are steady to $.02 lower in 2 sided trade.  CGO May-26 is down $.02 at $5.96 ½ while KC May-26 is also off $.02 at $6.11 ½.  YTD exports are up 12% while the USDA forecast is for a 9% increase.  Russian exports in March are expected to reach 3.7 mmt, nearly double the 2.0 mmt shipped in Mch-25.  US winter wheat acres in drought slipped 1% to 55% while spring wheat acres rose 2% to 21%.

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