Ags up as Market Injects Weather & War Premiums

[00:00:06]Good morning. Happy Wednesday to all.

[00:00:08]We've got a higher trade across the agricultural space this morning as markets inject additional weather and war premium. Uh the Straits of Hormuz and the Kerch uh Straits remain largely closed to two a vessel traffic. Uh US military forces have carried out uh strikes against Iranian targets now for an 11th consecutive day while uh Iran continues to attack US forces in the region. US Secretary of State Rubio suggested Iran is not a serious about peace talks stating that if they're serious, we're serious. And if not, we'll do what is necessary to protect our interests and the interests of our allies. Uh spot crude oil right now is up $2.60 a barrel. RBOB up about 3 cents with heating oil up 9.

[00:00:56]Uh we did reach a 6-week high in uh spot crude while new contract highs uh for both RBOB and heating oil. Uh weather-wise, we did see some scattered showers in eastern corn belt yesterday and we currently have another system bringing some uh short-term moisture relief to areas of central Nebraska. Uh the northern Midwest and eastern corn corn belt will experience another couple of days of uh normal to below normal temperatures. Uh much above normal temperatures with limited prospects for rain. Uh however, in the western corn belt, this will raise crop stress levels there. Week two of the outlook for both the 6-to-10 and 8-to-14-day forecast continue to hold in an an above to much above normal temperature pattern across much of the nation's midsection with normal to below normal precipitation. Uh Western Europe also remains hot and dry.

[00:01:45]Uh rains in South America largely limited to uh northeastern uh Argen- uh Argentina and southern Brazil. Uh dry uh in other areas uh beneficial for corn harvest. Uh US dollar is uh slightly lower as is US equity markets.

[00:02:04]Uh corn right now 5 to 6 cents higher here as we approach the pause.

[00:02:09]Both September and these trading to fresh 8-week highs. EIA data later this morning is expected to show ethanol production rebound. Average guess 316 million gallons up from 306 the previous week. Likely to see a lower uh usage figure here in the next uh WASDE report. Uh I think that will be offset by higher exports, however.

[00:02:33]Cattle on feed on Friday also expected to come in about 102% of year-ago levels. Uh and I think the threatening weather here in the US and the potential for Chinese demand just keeps the path of least resistance higher for now. Uh beans uh 6 to 6 to 8 higher. Meal 2 to 3 bucks better. Oil teetering around unchanged.

[00:02:55]Crush margins a little changed here. Uh US fob offers at the Gulf do remain 15 to 20 uh cents above those of of Brazilian offers uh through August and September. Get out to October and uh November US is starting to get a little bit of a discount. I think continued demand interest from China and others along with this uncertain weather outlook, particularly for the western corn belt, here too keeps the path of least resistance higher.

[00:03:22]Uh we did reach uh uh uh We are holding within this week's range so far in both August and November beans. Next serious resistance for uh spot soybeans I've got at 12:58 and a quarter. That is the high from May of 2024 on the weekly continuation chart.

[00:03:41]Uh wheat prices surging here 10 to 18 cents higher. Uh US hard red spring spring wheat crop tour in North Dakota day one found average yield potential at 46 bushels uh per acre below the 50 we saw a year ago. Tour ends on Thursday when they will issue their production forecast. Prices are closing in on their spring highs.

[00:04:05]Supply disruptions from the Black Sea looks like they're going to go on for a while now. Ukraine has claimed to have struck another 13 of Russia's shadow fleets in the Azov and Black Sea here over the last couple of days. Thanks for listening everyone. I hope you have a fantastic day.