Prices Flipped to Mostly Lower Levels

MORNING AG OUTLOOK

Prices have flipped to mostly lower levels across the Ag space in 2-sided trade overnight.  Soybean oil is the leader to the downside, largely in sympathy with lower energy prices.  Pres. Trump is expected to make an announcement soon on whether to launch a “massive attack” on Iran.  The US military has reportedly moved additional troops, medics and weapons to the Middle East in recent weeks adding to the already heightened tension.  US military forces have carried out strikes against Iranian targets for 13 consecutive days.  Spot WTI Sept-26 crude oil is down $2.40 per barrel near $89.80 while holding within yesterday’s range.  Spot RBOB is down $.09 per gallon while HO is off $.10.  Scattered rain in the WCB the past 24 hours with isolated heavy amounts in C. Kansas.  Much above normal temperatures expected to expand across the plains and WCB this weekend which will likely hold into early August.  Temperatures across the N. Midwest and ECB will build to above normal reading by early next week.  Week 2 of the outlook however shows a return to more normal temps.  Normal to below normal precipitation across much of the nation’s midsection throughout the first week of Aug.  Crop stress will be on the rise across the WCB.  Western Europe remains hot and dry.  Heat expands into E. Europe however scattered precipitation is expected.  Dry in WC Brazil is supportive for corn harvest.  Scattered showers expected in S. Argentina while moderate to heavy rains in S. Brazil.  The US $$ is little changed in 2-sided trade.  US stock indices have bounced after yesterday’s selloff.

Corn: 

Sept-26 corn is $.02 ½ lower at $4.61 ½ while Dec-26 is down $.02 at $4.85 ½.  Both traded to fresh 8-week highs overnight.  Today’s cattle on feed report is expected to show inventories at 102.2% of YA at 11.372 mil. head.  The BAGE reports Argentine harvest has reached 67% while holding their production forecast at 64 mmt, vs. the USDA est. of 63 mmt.  Brazil’s Federal Prosecution Service filed a lawsuit against the Fed. Govt. to suspend the mandated 2% increased in ethanol blended into gasoline taking the require level up to 32%.  Threatening US weather combined with hopes of Chinese demand keep the path of least resistance higher.  Speculative buying yesterday took the MM long position back up to roughly 105k contracts.  OI rose over 16k contracts.

Soybeans: 

Aug-26 beans are up $.03 at $12.40 ½ while Nov-26 is up $.01 ½ at $12.45 ¼.  New contract high for Nov-26 while Aug-26 came within $.00 ½.  Next significant resistance for old crop is $12.58 ¼, the May-24 high on the weekly continuation chart.  Aug-26 meal is up $1.80 at $331.70 while Aug-26 oil is down 89 points at 74.70.  Spot meal jumped out to an 8-month high before pulling back.  Crush margins are up $.02 ½ at $3.22 ½ bu.  US Gulf FOB offers holding $.10 above Brazilian offers for spot shipment while holding even for Sept-26 forward.  Continued demand interest from China (and others) coupled with an uncertain weather outlook in the WCB will likely keep the path of least resistance to the upside.  The market has little wiggle room for US yields slipping below the current 53 bpa trendline forecast.  The combined speculative long position in the soybean complex is approaching 300k, still well below the May-26 record at just over 501k.  Yesterday’s OI was up 13.7k in beans, just over 500 contracts in oil while down 1k in meal.

Wheat: 

Prices range from $.02 to $.06 lower.  CGO Sept-26 is down $.04 ½ at $6.91 ¾, after trading to a new contract high overnight.  A close below $6.93 would establish a key reversal day.  KC Sept-26 is $.04 lower at $7.56, also stretching out to a new contract high overnight.  MIAX Sept is $.07 lower at $7.23.  Fading hopes for a quick solution to the supply disruptions from the Black Sea region have driven prices to 2-3 year highs.  Final results from the ND Wheat Quality Council’s crop tour estimated yields in the top producing HRS state at 48 bpa, down from 49 bpa YA however above the 5-year Ave. of 45.8.  The USDA is forecasting an average yield of 58 bpa, just below the 2024 record yield of 59 bpa. The BAGE reports Argentine plantings have reached 98%

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