New crop futures recovered strongly overnight.
Grain futures are mostly firmer overnight, with soybeans catching the bulk of the gains. Europe is closed for Easter Monday, so the French milling wheat bid will not be known until Tuesday, while China is off for the Spring Festival. New crop corn and soybeans have caught attention with the recovery in price strength as the old/new crop bear spreading continues to be the feature since Thursday's trade. NASS will release its 1st seasonal report on US winter wheat conditions later today, while WASDE will be out with its April Crop Report on Friday. The WASDE report will feature a cut to 2020/21 US corn end stocks through an upward revision in exports, feed/residual use and the US ethanol grind. And USDA's FGIS should release a near-record export total for US corn inspections today of 80-90 Mil Bu. US corn is being exported aggressively to China and others.
Brazil is offering soybeans and Argentina corn well below the US Gulf. This is pressuring nearby CBOT corn/soy futures on the prospect of imports. Its new crop Nov soybeans and Dec corn that hold the upside price potential as fund managers position long in coming weeks.
The US dollar is slightly lower, while crude oil futures weakened on OPEC's decision to slightly increase production and spike in Covid-19 cases in India. Traders are returning slowly from the Easter holiday, but volume is expected to increase later this week as fund managers position for the new quarter. The strong jobs data released on Friday has S&P and Dow Jones futures making new highs today.
The South American forecast has the ongoing concern of a developing flash drought across Parana, Mato Grosso Du Sol and the Southern Mato Grosso. The week 2 EU model pulls back on rain totals for Mato Grosso, which would return soil moisture shortages to this key crop area. Rain chances will occur nearly daily this week across Mato Grosso/Goias, while other corn areas will be short-changed. There are clear indications that upper air tropical moisture will be in retreat beyond mid-April. This would place importance on new storm systems in the last week of April and early May, when Brazilian corn will be in the sensitive reproduction phase.
Cattle trading had a good week last week, along with last week's cash trade occurring in a wide range. Trade in the south started $1 higher for the week at $116. But by the end of the week, cattle were selling as much as $2 higher in the north at $118, with top prices quoted as high as $121. Cattle in the W Midwest brought $119-120 or $1-2 higher. The early week outlook is steady to $1.00 higher on strengthening kill margins. Boxed beef values rallied to strong gains. The choice cutout jumped $13.52, and select was $18.45/cwt higher on the week. Choice loins led the rally gaining $28/cwt and adding $5.90 to the choice cutout value. Despite the gains in cattle prices, estimated slaughter margins advanced $28/head to $355.