Sharply Higher Trade Across The Ag Space

MORNING AG OUTLOOK

Sharply higher trade across the Ag space this AM coming off the 3-day Holiday weekend.  Forecasts for hot, dry conditions setting up across much of the central and WCB in the mid-July timeframe has led to an injection of weather premium.  A rapid depletion of soil moistures combined with excessive heat will start to lower yield prospects.  This past weekend saw heavy rains causing isolated areas of flooding across C. Iowa, SW WI and N. IL.  Rainfall this week will favor the N. Midwest and ECB along with the Great Lakes region.  CFTC-COT data is delayed until this afternoon.  I look for this afternoons crop updates to show steady to slightly lower corn and soybean ratings, while 1-2% improvement in spring wheat conditions.  Energy prices are mixed as headlines from the Middle east have been scarce.  Spot WTI crude oil is steady near $68.60 in 2-sided trade.  Spot RBOB is up $.04 per gallon with HO $.06 higher.  Global weather shows excessive heat returning this week across Western and much of central Europe where crop stress is on the rise.  Dry across Argentina this week as with temperatures shifting to above normal, beneficial for corn harvest.  Moderate rains for WC and the interior south of Brazil with temperatures mostly above normal.  The US $$$ is moderately higher while US stock indices are steady to up 1%.

Corn: 

Sept-26 is up $.12 at $4.35 while Dec-26 is $.13 higher at $4.54 ½, both at or near session highs while also stretching out to their highest level in a month.  The forecast for extreme heat right at the height of pollination calls for an injection of weather premium.  The BAGE kept their Argentine production forecast unchanged at 64 mmt vs. the USDA at 61 mmt, while reporting harvest has reached 53%.  Corn ratings in France plunged 18% to 58% G/E.  Brazil’s 2^nd crop harvest has reached 26.5% vs. 28.5% YA.  With US crop ratings currently at historically average levels, I wouldn’t expect the USDA to come off their ave trendline yield of 183 bpa.

Soybeans: 

Aug-26 beans are up $.32 at $11.68 ¼ while Nov-26 is $.35 higher at $11.83.  The surge in Aug-26 has stalled for now near its 100-day MA at $11.69 ¼.  Next resistance for Nov-26 is at $11.99.  Aug-26 meal is up $6.50 at $312 with 100-day MA resistance at $315.20, while Aug-26 oil is up just over a penny to 67.80, also stalling out near its 100-day MA.  Crush margins (Aug-26) are down $.05 at $2.65 bu.  The BAGE kept their Argentine production forecast unchanged at 50.1 mmt vs. the USDA at 51 mmt, while reporting harvest has been completed.  US FOB offers at the Gulf are slightly below Brazilian offers as we await evidence of additional Chinese demand.  Brazil’s Ag. Ministry places June bean shipments at 14.5 mmt vs. 13.4 mmt YA.  I also look for the USDA to hold with their trendline yield at 53 bpa allowing 2026 production to rise 28 mil. to 4.473 bil.

Wheat: 

Prices are $.06-$.10 higher across the 3 classes.  CGO Sept-26 is up $.09 ¼ at $6.09, KC Sept-26 is $.06 ¾ higher at $6.45 ¼ while MIAX Sept is up $.06 at $6.24 ¾.  Resistance for CGO rests at its 100-day MA at $6.17 ¼, while $6.49 ¼ for KC.  Soft wheat production in France is expected to fall to between 31.5-32 mmt vs. 33.4 mmt YA.  The BAGE reports Argentine plantings have reached 81%.  Saudi Arabia reportedly bought just over 660k mt of between $267.72/mt CF and $272.75/mt CF for Sept/Oct shipment.

Interested in more futures markets?  Explore our Market Dashboards here.