Turnaround Tuesday comes with a firm start.
The first crop condition report for 2021 was released yesterday from the NASS and reported late Monday that 53% of the US winter wheat crop was rated good to excellent (GD/EX), with just 2% of the '21 US corn crop planted (mostly TX). The surprise was not that 53% of the US winter wheat crop was rated GD/EX (62% GD/EX last year), but that 16% of the crop was rated poor/very poor, with nearly the entirety of that wheat being HRW located in the Plains. The US SRW and SWW wheat crops were rated close to historical averages. It was the TX/CO/SD and NE wheat crops that were poorly rated and struggling.
The results of the unusual GASC tender over the Easter holiday will be available today, with Egypt looking to secure August wheat in a tender submission that lasted 5 days. Traders will be closely following Russian wheat offers considering the new floating 70% export tax rate above $200/MT that will be installed on June 2. Key will be the number of Russian offers and their calculations for tax risk.
This coming Friday's April WASDE report should support old crop corn on rising exports/feed use demand. Midwest corn/soybean basis bids continue to rise on tightening supplies. New crop futures need to secure additional 2021 acres with higher prices. Like the harvest, new crop US corn and soybean futures could unusually rise through the spring planting season.
A below-normal rainfall pattern will persist across Brazilian winter corn areas for another 2 weeks. The best chance of rain for N and C Brazil is in the coming days, but totals have been diminished from the late last week's forecasts. The 8-14 day period returns a drier flow with limited rain for Parana, Mato Grosso Du Sol, and S Mato Grosso and Goias. Near normal rain will drop across the northern half of Mato Grosso.
The Central US weather forecast offers warm temperatures and limited rains for the next 24-36 hours before a cold front produces showers across the NW Midwest, spreading east and south into the weekend. The temperature forecast turned cold overnight for week 2 – which will slow spring seeding.
Cattle futures had new contract highs in the June contract forward yesterday, as last Friday's cash trade that breached 120.00 excited the deliverable spot contract. This week, given the rally in beef prices and strong margins, feedlots will be looking to add $2-3 to the cash market this week. Last week's 5 area average steer brought $118, and cattle feeders will be targeting $120 this week.
Boxed beef prices soared to strong gains on Monday. The choice cutout jumped $5.82 on Monday to $258.67. Select beef followed along and gained $2.89 to $249.86. Excluding the 2020 spring Covid rally, this is the highest quote on the choice cutout since May 2015, within $7 of the all-time high. US beef demand is intense, and CME cattle futures reflect its expected continuation with June cattle trading at a rare $3 premium to April. Mid-May should complete food service restocking.