Limited Price Movement Ahead of Export Sales

MORNING AG OUTLOOK

Mixed trade across the Ag space overnight with limited price movement ahead of this morning’s export sales update.  Yesterday the Trump Admin. asked Congress to approve another $11 billion in aid for American farmers who face higher fuel and fertilizer costs since the US/Iran war broke out this Spring.  This is on top of the $12 bil. the administration disbursed to farmers earlier this year.  Energy prices are also mixed in 2-sided trade.  Spot WTI crude oil is down $.55 per barrel near $69.80 hitting a fresh 3 ½ month low.  Spot RBOB is up $.02 per gallon while HO is off $.02.  Little change in global weather.  In the US rain in the past 24 hours favored the Great lakes region and far WCB.  Scattered, and in some cases heavy rain across the US Delta region.  Precipitation into early July will favor the S. Midwest and N. Plains.  Dry across much of TX where triple digit heat is expected into early July. Much above normal temperatures is expected to impact much of the nation’s midsection by early next week.  Much of Europe will experience above normal temperatures into at least early July.  Dry in the west with only scattered precip. in Central Europe.   Rains in South American over the next week will be limited to S. Brazil.  Cooler than normal in Argentina and S. Brazil, above normal temperatures for C. and N. Brazil.  The US $$ is slightly higher in 2-sided trade.  US  stock indices are higher ranging from up .20% to 2.1%.

Corn: 

July-26 is steady at $4.07 while Dec-26 is up $.00 ½ at $4.35 ¼.  Both established new contract lows overnight with July-26 filling the gap from last September on the weekly chart.  Yesterday’s EIA report showed ethanol production slipped to 320 mil gallons last week, down from 324 mil the previous week and down 1% from YA.  Production was below expectations and below the pace needed to reach the USDA corn usage estimate.  For next week’s USDA update I see corn acres dipping to 94.75 mil. while my June 1^st stocks est. is 5.425 bil bu.  The Ave. estimate in the Bloomberg survey shows acres at 95.1 mil. down from 95.3 in March with stocks at 5.414 bil vs. 4.643 bil YA.  Yesterday the Trump Admin. also urged the Senate to pass legislation allowing the year-round sale of E-15.  Export sales are expected to land between 32-90 mil bu., old and new crop combined.

Soybeans: 

July-26 beans are up $.03 ¼ at $11.12 while Nov-26 beans are up $.04 ¼ at $11.39 ¼.  Both bouncing after making new lows for the week.  July-26 meal is up $2.10 at $305.70 while July-26 oil is down 50 points at 68.95.  Meal has held within yesterday’s range while oil has support at its 100-day MA at 68.48.  Crush margins backed up another $.03 to $3.20 ½.  Prices will continue to be sensitive to Chinese demand, or the lack thereof.  US FOB offers at the Gulf are back to a slight premium over Brazilian offers for July/Aug-26, while slightly below Sept-26 forward.  I look for US soybean acres to increase to 85.25 mil., up from the USDA March forecast of 84.7 mil.  My June 1^st stocks est. is 1.050 bil. bu., exactly in line with the Ave. Bloomberg survey.  Rabobank cut their forecast for fertilizer sales to Brazilian farmers in 2026 by another 2.1 mmt to 45.1 mmt, and is now down 4.1 mmt since April.  The bank cited high costs due the US/Iran war along with record defaults by agricultural producers.  Export sales are expected to range from 20-55 mil. bu. of soybeans, 200-500k tons of meal and 0-12k tons of oil.

Wheat: 

Prices are mixed and within a few cents of unchanged.  CGO July-26 is down $.01 at $5.84 ¾, KC July-26 is $.00 ½ lower at $6.16 ¾, while MIAX July-26 is $.01 higher at $5.85 ¼.  July-26 KC is building support near its June low of $6.14.  Inside trade for MIAX July-26 after establishing a new contract low yesterday.  I see US spring wheat acres bouncing to 9.75 mil. up from the 9.415 projected in March and just above the Bloomberg Ave. estimate at 9.5 mil.  I see 2025/26 ending stocks slipping 10 mil. to 925 mil., just below the Bloomberg Ave. est. of 931 mil.  Export sales are expected to range from 8-22 mil. bu.

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