Mostly Lower Trade With Little Price Change

MORNING AG OUTLOOK

Mostly lower trade across the Ag space with little price change ahead of tomorrow’s USDA production and WASDE data.  Energy prices have turned mixed in 2-sided trade.  While Iran says it is closing in on a deal with Oman to reopen the Straits of Hormuz and not talking to the US, Pres. Trump maintains the SOH is open and is demanding Iran pay reparations for many conflicts and protestors killed over several decades.  Vessel traffic thru the narrow passageway remains at a standstill.  Spot WTI crude is up $.10 a barrel near $82.25.  Spot RBOB is down $.01 per gallon while HO is unchanged.  US crop progress and condition updates were generally in line with expectations.  Wheat is holding as the upside leader supported by logistical issues with grain shipments from the Black Sea region.  Ukraine is reported looking to rail grain throughout neighboring Moldova to the Romanian port Constanta to avoid shipping lanes in the Black Sea.  Heaviest concentration of rain in the past 24 hours has been in N. IN and the far ECB.  Heavy rains this week are expected to stretch from SD and NE east across the central  Midwest and ECB.  Hot and dry across the SW corn and soybean belt along with the SW plains and Delta region.  Seasonally cool across Argentina and S. Brazil this week with healthy rains across NE Argentina and S. Brazil.  Warm and dry across C. and Northern growing regions of Brazil.  Hot for all of Europe while improving prospects for rain in Spain and France.  The US $$$ is little changed while US equity markets are slightly higher.

Corn: 

Sept-26 and Dec-26 are both $.01 lower at $4.37 ¼ and $4.60 ¾ respectively.  Dec-26 seems to be building solid support just below $4.60 while MA resistance is just above $4.70.  The Reuters poll shows traders expect US production to slip 66 mil. bu. to 15.934 bil.  Old crop stocks are expected to drop by 21 mil. to 1.999 bil. with new crop stocks down 65 mil. to 1.725 bil.  AgRural reports Brazil’s 2nd crop harvest is 79% complete, vs. 88% YA.  US crop ratings held steady at 61% G/E, in line with expectations.  Composite ratings improved in 4 states while declining in 10 and holding steady in 4.  Overall ratings remain the lowest for the growing season while slightly below the historical average.  61% of the crop is in the dough stage, just ahead of the 5-year Ave. of 55% and YA at 56%.  16% of the crop is dented vs. the 5-year Ave. of 12%.  Current ratings would suggest an average US yield of 181.3 bpa with production at 15.855 bil bu vs. the current USDA forecast of 16.0 bil bu.

Soybeans: 

Sept-26 and Nov-26 soybeans are both $.01 lower at $11.60 ¾ and $11.78 ½ respectively.  Both holding within yesterday’s range while trading both sides of unchanged.  Nov-26 continues to hold support above its 100-day MA at $11.71 ¼.  Sept-26 meal is down $.50 at $305 per ton while falling to a 5-week low.  Sept-26 oil is down 33 points at 69.20, rejecting trade above its 100-day MA.  Crush margins are off $.04 at $2.71 ½ per bu.  China’s Sinograin will auction off another 516k mt of soybeans tomorrow, their 3rd such auction as they look to free up storage ahead of US arrivals.  Chinese leader Xi is expected to visit Washington DC in 7 weeks.  The Reuters poll shows traders expect US production to slip 3 mil. bu. to 4.472 bil.  Old crop ending stocks are expected to slip 9 mil. to 321 mil. with new crop stocks down 6 mil. to 304 mil.  US crop ratings fell 1% to 62% G/E, in line with expectations.  Ratings are the lowest of the crop cycle while matching their historical average.  Composite ratings improved in 11 states, while falling in 7.  93% of the crop is blooming, vs. 90% YA and 5-year Ave. of 91%.  74% of the crop is setting pods vs. YA and 5-year Ave. of 69%.  Current ratings would suggest an average yield of 53.2 bpa, unchanged from last week with production at 4.488 bil vs. the USDA forecast of 4.475 bil.

Wheat: 

Prices have turned $.02-$.03 lower in choppy 2-sided trade.  CGO Sept-26 is down $.02 ¼ at $6.38 ¼, KC Sept-26 is $.03 lower at $7.10 ½ while MIAX Sept-26 is down $.02 ½ at $6.67 ½.  Ukraine’s Ag. Ministry fears their grain export terminals may face a massive shortage of grain storage that could reach 11 mmt.  SovEcon estimate Russia will ship 3-3.4 mmt of wheat in Aug-26, down from their historical average of 5 mmt.  The Reuters poll shows traders expect all US wheat production at 1.525 bil bu. down 11 mil. from July.  Winter wheat production is expected to fall 9 mil. bu. to 981 mil.  Spring wheat production is expected to slip to 468 mil. down 7 mil. bu.  Ending stocks are expected to drop 7 mil. bu. to 715 mil.  Winter wheat harvest advanced to 91%, in line with the 5-year Ave. Spring wheat ratings fell 4% to 51% G/E vs. expectations for a 2% decline.  Composite ratings have fallen to their lowest level of the crop cycle however remain just above their 5-year Ave.  24% of the crop has been harvested vs. 5-year Ave. of 19%.

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