Ag Prices Cont to Draw Support + Weaker Dollar

MORNING AG OUTLOOK

All green on the screen this AM as agricultural prices continue to draw support from disappointing crop tour results along with a weaker US $$.  Energy prices are mostly higher after Pres. Trump vowed “economic warfare” on Iran while also looking to impose financial penalties for their supporters.  Oct-26 WTI crude is up $2.85 a barrel at $87.25, reaching a new high for the month.  Spot RBOB is down $.01 ½ per gallon while HO is $.04 higher.  A line of heavy rain stretched from E. NE across the central and ECB the past 24 hours.  1”-3” totals reported across already saturated fields in EC IL thru SC OH.  Light rains expected over much of the nation’s midsection over the next week with normal to below normal temperatures in the north, above normal temperatures in the south.  Week 2 of the outlook features above normal temperatures with normal precipitation.  Dry conditions expected across nearly all of Brazil and Argentina over the next 7 days.  Cooler in Europe with prospects for healthy rain in S. France and Germany, likely too little too late to benefit EU corn production.  The US $$ is moderately lower after falling to a fresh 3-month low overnight.  The recent weakness has been driven by the US Treasury announced plans to double repurchases of 10-30 year bonds over the next several months.  US stock indices are slightly lower.

Corn: 

Sept-26 and Dec-26 are both up $.05 ½ at $4.78 ½ and $5.03 ½ respectively.  Both stretched out to 3-month highs.  The 3 districts in W. Iowa covered by the Pro Farmer crop tour yesterday, found expected yields down 4-8 bu. below YA.  2 of those districts were very close to their 3-year Ave. with 1 district coming in 6 bpa above its 3-year Ave.  In IL the tour projected yields at 184.2 bpa, well below the 199.6 bpa from YA and the 3-year Ave. of 199.2 bpa.  Speculative traders bought another 23k contracts yesterday stretching their long position back out to nearly 260k, which if realized would be the largest in 3 months.  O.I. however was down just over 4k contracts.  The speculative community is buying into the lower production, possibly higher usage narrative.  Since Aug. 1^st Ukraine has shipped only 500k mt of grain, about 20% of the their potential capacity.  This AM’s export sales are expected to range from 20-70 mil. bu. for both MY’s combined.

Soybeans: 

Sept-26 beans are up $.01 ¾ at $12.24 while Nov-26 is $.03 ½ higher at $12.40 ¾, both trading up to new highs for the month.  Sept-26 meal is up $1.50 at $320.40 while Sept-26 oil is up 47  points at 70.33.  Crush margins bounced $.06 bu. to $2.53 ½ bu.  US Gulf FOB offers continue to hold $.30-$.40 bu. below Brazilian offers thru the end of 2026.  Hedgepoint Global Markets forecasts Brazil will harvest 181.7 mmt of soybeans in 2026/27, well below the USDA’s 186 mmt est.  They expect harvested acres will increase marginally to 49.2 mil. HA, (121.6 mil. acres) up from 48.8 mil. HA last year.  Chinese leader Xi is expected to visit Washington DC in just over a month.  The US balance sheet has little wiggle room for US yields to slip much from the current USDA est. of 52.7 bpa or rish sharply tighter stocks.  Pod count data from the 3 districts in Iowa covered by the Pro Farmer crop tour were all below YA, while 2 of the 3 were above their 3-year Ave.  Pod count data in IL at 1,430 pods per 3×3 foot square were down from last year’s 1,479, however above their 3-year Ave. of 1,390.  The tour will finish covering Iowa and MN today before meeting in Rochester, MN this afternoon ahead of releasing their final yield and production estimates.  Export sales are expected to range from 35-85 mil. bu. of soybeans, 150-500k tons of meal and -10 – 10k tons of oil.

Wheat: 

Prices range from $.03-$.06 higher across the 3 classes in 2-sided trade overnight.  CGO Sept-26 is up $.05 ½ at $6.85 ¾, KC Sept-26 is $.03 higher at $7.65, while MIAX Sept-26 is up $.06 at $7.00.  Russian military struck another dry cargo ship near Ukraine’s port of Chornomorsk, which they claim was transporting military equipment.  Despite Russia’s Aug-26 wheat shipments likely being the lowest in 16 years, their Ag. Ministry reports grain harvest is approaching 100 mil. tons as local fuel shortages are being quickly resolved.  The LSEG has lowered their EU + UK wheat production forecast 2.3% to 145.5 mmt.  This included 137.9 mmt of soft wheat and 7.6 mmt of durum.  US export sales are expected to range from 8-16 mil. bu.

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