Mostly Uneventful Trade With Prices Mixed

MORNING AG OUTLOOK

Mostly uneventful trade with prices mixed across the Ag space.  Something tells me that won’t last too long.  Mixed trade in energy markets as well with no major developments in the US/Iran war.  While the 2-week ceasefire agreement remains “fragile”, energy prices have leveled off after Israeli PM Netanyahu stated they agreed to negotiate with Lebanon as soon as possible.  Vessel traffic through the Straits of Hormuz remains restricted at only 10-15 vessels per day, well below prewar levels of 120-130.  The next round of peace talks between the US and Iran are expected Saturday in Islamabad, Pakistan.  Spot WTI crude oil is up $.15 a barrel near $98 while holding within yesterday’s range.  Spot RBOB is down $.01 per gallon while HO is down $.05.  While some rain has fallen in SW KS, the heaviest totals were in the northeast portion of the state where drought conditions are less severe.  Still dry for Nebraska.  Precipitation over the next week to favor the S. Plains and Great Lakes region.  Dry in the SE where plantings should accelerate, while lighter precipitation in the WCB and N. Plains.  The 8-14 day outlook remains hot/dry in the SE with above normal temperatures and precipitation across much of the nation’s midsection.  The dryer conditions this week in Argentina was welcomed after heavy rains earlier this month.  Some relief is expected in far S. Brazil in RGDS however additional rains will be needed, particularly in the interior south region in Parana and Southern MGDS.  The US $$$ is slightly lower while holding within yesterday’s range.  US equity markets are mixed and little changed.

Corn: 

May-26 is down .00 ½ at $4.43 ½ while Dec-26 is down $.01 at $4.73 ¼.  May-26 is holding just above this week’s low of $4.42 ¼ with MA resistance near $4.48.  No surprises in yesterday’s USDA WASDE report with US ending stocks holding steady at 2.127 bil. bu.  Huge gap in Argentine production est. with the USDA at 52 mmt, the Rosario Exchange at 67 mmt, while the BAGE in between at 57 mmt.  Argentine harvest has reached 22%.  Look for Monday’s planting update to show roughly 5-6% of the US crop as seeded.

Soybeans: 

May-26 and Nov-26 beans are $.04 ½ higher at $11.69 ¾ and $11.57 respectively.  May-26 meal is up $6 at $323.60, surging to a 2 ½ week higher while May-26 oil is down 47 points at 67.23.  No major surprises with the USDA holding ending stocks steady at 350 mil. bu. although I was a bit surprised the sizeable shift of 35 mil. bu. of demand from exports into crush.  While energy/war headlines will still drive price volatility, the markets attention will gradually shift toward the US planting season and Pres. Trump’s upcoming trip to China. With his trip already pushed back 6-7 weeks, I wouldn’t expect them to source anymore old crop soybeans from the US but hopefully can count on at least 25 mmt of new crop.  Chinese weapons supplied to Iran could complicate negotiations.  The BAGE kept Argentine production at 48.5 mmt, just above USDA’s 48 mmt forecast.            

Wheat: 

Prices range from steady to $.05 lower.  CGO July-26 is down $.05 at $5.80 carving out a fresh 5 week low.  KC July-26 is down $.03 at $6.02 ¾ while still holding support right at its 50 day MA.  US stocks were slightly above expectations at 938 mil. bu.  The huge jump in global stocks, up just over 6 mmt to 283 mmt will likely weigh on rally attempts.  While US WW areas in drought rose 3% LW to 68%, a fresh 52-week high, look for as easing in futures updates.

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