Grain Spreads: AG Forum Tomorrow

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Commentary

Tomorrow begins the first official look the 26/27 crop. These are baseline projections to be taken very lightly in my opinion. However, the agency has to start somewhere, and tomorrow’s data dump starts the “official guessing game” from the USDA. Pre Ag Forum estimates to follow. Analysts are expecting the USDA to peg 2026 corn acres at 94.9 million in tomorrow morning’s Ag Forum, down from 98.8 million acres in 2025; corn yields are seen at 183.3 bushels per acre (BPA) with production at 15.940 billion bushels and ending stocks at 1.978 billion bushels. Soybean plantings are seen at 84.9 million acres, up from 81.2 million in 2025; yields there are seen at 52.8 bushels per acre with output at 4.412 billion bushels and ending stocks at 349 million bushels. U.S. 2026 all-wheat acres are expected to come in at 44.8 million, versus 45.3 million in 2025; yields are estimated at 51.9 bushels per acre, with 2026 production seen at 1.895 billion bushels and carryout at 901 million bushels.

For the soybean sector, the Trade is also trying to price in the range of possibilities that could come from the Renewable Volume Obligations RVO release in March. Rumors that the industry is getting all that it wished for from the EPA have speculative money loading up on Bean Oil in my opinion The expectations are running high. Nothing short of exceeding them is going to hold up the market in my view The release is weeks away, but the potential is big and seems well telegraphed. Crush margins are on the rise with cash crush returns up $.20/bushel week on week. This could be in my view an eventual classic buy the rumor and sell the fact even in bean oil. Look to buy cheap puts if the deferred contracts trade if futures trade and close over the 60.00 level on consecutive sessions.

Trade Ideas

Futures-N/A

Options-Low ball or bid below the market a June 26 bean oil if 55.00 put for 1.00 points or better.

Risk/Reward

Futures-N/A

Options-If filled at 100 points, the cost and maximum risk is $600 plus trace costs and fees. Risk 60 points or approximately 360 on a stop loss and look to exit the put premium at 400 points, for a 300 point or $1800 gain less trade costs and fees. I suggest that this trade will end up like beans did in mid-November. Everyone got bulled up on Chinese buying, then when funds figured out the details, funds unloaded. Keep in mind the put option I'm suggesting settled at 1.82 today, so we aren't close to getting filled at our suggested price. The gameplan optimally would be looking to get filled on a blow off top scenario. I have plenty more strategies on this, please reach out and call and let's talk strategy. Weekly July 26 bean oil chart below.

Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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