Lower Trade Kicking Off A New Month

MORNING AG OUTLOOK

Lower trade across most of the Ag space to kick off the new month.  Energy prices are sharply lower after Pres Trump cancelled planned attacks on Iran on Sunday.  Peace talks are expected to resume on Monday.  WTI Sept-26 crude oil is down $5.25 per barrel at $79.43.  Spot RBOB is down $.11 per gallon challenging the $3 level while HO is off $.12.  No deliveries against Aug-26 soybean meal.  Soybean deliveries were 50 contracts while soybean oil deliveries slipped to 627 contracts.  As expected healthy rains moved across much of the central and eastern corn belt over the weekend with heaviest totals in S. WI and N. IL.  Temperatures were at normal to below normal readings for a vast majority of the corn and soybean acres.  100+ degree temperatures were limited to the Southern and NW plains.  Rainfall over the next week will will again favor IA and the Great Lakes region with limited rain for the S. Midwest and plain states.  Cooler temperatures for the N. plains and WCB the next 3-4 days before returning to above normal readings by the end of the week.  Central Brazil remains hot/dry while cooler in South along with much of Argentina.  Rains for E. Argentina and S. Brazil.  Europe remains hot with scattered rains in the east.  The US $$ plunged to a 2-month low overnight before recovering to slightly lower levels.  US stock indices are higher.

Corn: 

Sept-26 and Dec-26 are both $.02 ¼ lower at $4.38 ½ and $4.61 ¾ respectively.  Both fell to 3-week lows overnight.  Despite last week’s weakness, Dec-26 closed the month up $.28 bu., its best performance for the month since 2012.  December corn closed higher in the month of July only 3 of the past 10 years.  The Senate Ag. Committee’s proposed farm bill includes provisions to allow the year round sale of E-15.  Debate continues to center on exemptions for small refineries.  Friday’s CFTC data showed MM’s were net buyers of just over 75k contracts extending their long position to 168k.  By Friday we had that long position back down to 127k.

Soybeans: 

Sept-26 and Nov-26 soybeans are down $.05 ¼ at $11.65 ½ and $11.82 ¼ respectively.  Both slipped to 3-4 week lows in the process.  Sept-26 meal is down $2.10 at $312.80 while oil is 20 points higher at 67.46.  Crush margins are little changed at $2.54 ½ bu. after falling to a 5-month low on Friday.  Cash sources suggest China purchased over 800k mt of US soybeans on Friday’s price weakness for Oct/Nov shipment.  Purchases were split between the PNW and US Gulf.  Census crush from June-26 due out after today’s close is expected to show 218 mil. bu. were crushed during the month, up from 197 mil. in June-25.  Bean oil stocks are expected to reach 2.113 bil. lbs. up from 1.894 bil. in June-25.  Friday EIA data showed combined biodiesel and RD production in May-26 was a record high at 497 mil. gallons.  Bean oil usage for green diesel production in May-26 surged to 1.434 bil lbs. a new record high, up 17% from the previous month and 40% from May-25.  Usage will need to average 1.445 bil lbs. per month June-Sept to reach the USDA forecast of 14.550 bil lbs.

Wheat: 

Prices range from steady to $.02 lower.  CGO Sept-26 is steady at $6.39 ¼, KC Sept-26 is $.01 lower at $7.06 ½ while MIAX Sept-26 is down $.01 ¾ at $6.88.  Russia claims to have struck at least 4 vessels in the Black Sea near Ukrainian ports overnight while Russia’s Grain Lobby warns a complete disruption to Black Sea exports is at risk if attacks continue.  If that would occur wheat shipments could slip to only 30-35 mmt, vs. the current USDA est. of 47.5 mmt.

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