Mostly Lower Trade As Prices Give Back

MORNING AG OUTLOOK

Mostly lower trade across the Ag space this AM as prices give back a portion of yesterday’s late surge.  Yesterday’s strength largely driven by speculative buying fueled by lower US crop ratings, a slow pace to US harvest and Pres. Trump talking up expected buying from China.  Energy prices have turned higher with Spot WTI crude oil up $.45 per barrel at $89.70, spot RBOB is up $.09 per gallon while HO is $.16 higher.  The USDA will provide updated production and balance sheet data on Friday.  Dry for much of the Midwest this week which should enable harvest progress to get back on track.  A tropical disturbance is expected to bring heavy rain to the SE this weekend before potentially bringing rain to the ECB early next week.  Moderate rain expected to return to the plains and WCB towards the end of the 1-week outlook.  Week 2 of the outlook shows above normal temperatures with normal precipitation across the much of the nation’s midsection. In SA precipitation will continue to favor the interior south of Brazil and Argentina where temperatures are expected to hold at below normal readings.  Hot with limited rain in Mato Grosso and N. MGDS.  Isolated flooding potential for Parana and Sao Paulo.  Europe continues to see scattered showers bringing some relief from this summer’s drought.  The US $$ is sharply higher, erasing yesterday’s pullback.  US stock indices are lower.

Corn: 

Dec-26 is down $.04 at $5.04, rejecting trade above yesterday’s high.  Support below the market is at $4.88 with next resistance at last week’s high at $5.29.  Open interest jumped 8.5k contracts yesterday, an indication of fresh longs entering the market.  The Reuter’s poll shows the Ave. production estimate at 15.721 bil. bu. with stocks at 1.670 bil., very much in line with our expectations of production at 15.710 bil. and stocks at 1.695 bil.  EIA data later this AM is expected to show ethanol production last week reached 302 mil. gallons up from 296 mil. the previous week, still well below the pace needed to reach the USDA usage forecast of 5.60 bil. bu.  Brazil’s corn shipments in Sept-26 reached 5.2 mmt, down 31% YOY.

Soybeans: 

Nov-26 beans are down $.01 ½ at $13.01 ½ in 2-sided trade overnight.  Dec-26 meal is up $1.50 at $356.30 while Dec-26 oil is down 51 points to 69.40.  Crush margins backed off $.03 ½ to $2.44 bu.  The Reuter’s poll shows the Ave. production estimate at 4.534 bil. bu. with stocks at 305 mil. just above our expectations of production at 4.510 bil. and stocks at 290 mil.  While Chinese purchases have slowed since late Sept-26, perhaps the return from Golden week tomorrow will start to change that.  Purchases for the 2026/27 MY likely between 14-15 mmt.  US Gulf FOB offers remain $.20 below Brazilian offers through the end of the year.  By Jan-27 Brazilian offers are $.80-$.90 below US.  Brazil’s soybean shipments in Sept-26 at 7.36 mmt are steady YOY.  Soybean O.I. was up just over 11k contracts while meal was down 2.5k and oil up 2.1k.

Wheat: 

Prices range from $.02-$.07 lower in 2-sided trade.  CGO Dec-26 is off $.06 at $6.98, Dec-26 KC is $.07 lower at $7.49, while Dec-26 MIAX is down $.02 ¼ at $7.17 ½.  IKAR reports Russian shipments thru the Baltic region reached 1.4 mmt in Sept-26 with the potential to rise to 1.8 mmt in Oct-26.  Russia struck 2 more vessels in the Black Sea off the coast of Bulgaria.  The crew from 1 of those vessels is still missing.  This comes a day after Russia struck a vessel off the Romanian coast.  The Reuter’s poll shows traders expect 2026/27 US wheat stocks to rise only 4 mil. bu. to 721 mil. vs. our estimate of 735 mil.  Open interest in CGO was up over 7k contracts while down 1.7k in KC.

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