Lower Trade Pressured by Better Crop Prospects

MORNING AG OUTLOOK

Mostly lower trade across the Ag space this AM pressured by better crop prospects in the final day of the Pro Farmer Midwest crop tour.  Corn and soybeans have recovered from overnight lows as the US $$ has weakened while energy prices are moderately higher in 2-sided trade.  Pres. Trump’s threat of “crushing” economic sanctions on Iran dashed hopes of a near-term peace deal and the reopening of the Straits of Hormuz.  Oct-26 WTI crude is up $.20 a barrel near $87.  Spot RBOB is up $.06 per gallon while HO is $.04 higher.  Dry conditions across the C. Midwest the past 24 hours with rains activity in the SE and far ECB while scattered showers in the N. Midwest and C. plains.  Light rains expected over much of the nation’s midsection into early next week with normal to below normal temperatures in the north, above normal temperatures in the south.  Week 2 of the outlook features above normal temperatures with normal precipitation.  Dry conditions in Argentina should benefit late corn harvest.  Healthy rains across SC Europe the past 24 hours including S. France.  Likely too little too late to benefit EU row crops.  The US $$ is moderately lower while holding within yesterday’s range.  US stock indices are moderately higher looking to recover from this week’s pullback.

Corn: 

Sept-26 and Dec-26 are both $.02 lower at $4.76 ¾ and $5.01 ¾ respectively, both holding within yesterday’s range.  The Pro Farmer crop tour pegged corn yields in IA at 194 bpa, down from 198 last year, however above the 3-year Ave. of 191.3.  Same story in MN yields are expected to reach 199 bpa, down from 202.9 YA while above the 3-year Ave. of 183.  China’s COFCO reports their 1st large cargo shipment of sorghum from Brazil, this following the US crop sharply below YA due to heat and drought stress in the US S. plains.  The BAGE held their Argentine production forecast unchanged at 64 mmt, just above the USDA est. of 63 mmt.  Harvest progress reached 81%, well below the historical average in the mid-90’s.  Datagro forecasts Brazil’s corn deficit in 2026/27 will grow to 7.2 mmt, from 2.7 mmt in 2025/26 due to expanded usage for ethanol production.

Soybeans:

Sept-26 beans are down $.04 ¼ at $12.16 ½ while Nov-26 is $.04 ¾ lower at $12.31 ¾.  Sept-26 meal is down $2.20 at $313.50 while Sept-26 oil is steady at 71.18.  US Gulf FOB offers are $.35-$.50 bu. below Brazilian offers thru the end of 2026.  China continues to stack up US soybean purchases ahead of Chinese leader Xi visit to Washington DC in just over a month.  The US balance sheet has little wiggle room for US yields to slip much from the current USDA est. of 52.7 bpa or risk sharply tighter stocks.  Pod count data in Iowa at 1,363 pods per 3×3 foot square were down from 1,384 YA, however above their 3-year Ave. of 1,296.  Similar story in MN where this year’s pod count of 1,258 was above the 1,248 from YA while above the 3-year Ave. of 1,090.  This year’s crop tour is over with expected production and yield results expected this afternoon.  China’s COFCO expects Brazilian soybean acres will increase slightly in the 2026/27 growing season however yields and production may be lower due to El Nino.  EPA data showed D4 RIN generation in July slipped 5.2% to 795.5 mil. suggesting a pullback in biodiesel and RD production.

Wheat: 

Prices range from $.05-$.08 lower across the 3 classes in 2-sided trade overnight.  CGO Sept-26 is down $.05 at $6.77 ¾, KC Sept-26 is $.08 lower at $7.54, while spot MIAX is off $.07 at $6.93 ¾.  The BAGE held Argentine acres unchanged at 6.5 mil. HA while plantings are essentially wrapped up.  The International Grains Council (IGC) lowered their 26/27 global production forecast 4 mmt to 817 mmt, below the USDA est. of 819.3.  US exports are down 32% from YA vs. the USDA forecast of down 15%.  While pace analysis would suggest the USDA export forecast is too high, sales will likely accelerate if logistical delays from the Black Sea continue.  US durum acres in drought plunged 14% LW to 53%.  US Spring wheat harvest will likely pass the halfway point this week.

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