Spring wheat leads the overnight advance.
Spring wheat led the overnight rally for the wheat complex, even pulling the SRW Chicago wheat higher through the night session. Morning action found corn and soybeans also higher on the day on Brazil's CONAB production estimates which were seen neutral to estimates, before export sales released at 7:30. Old crop soybeans had a net cancellation of 92,500 beans, which weakened the beans back into the morning close. New crop beans made expectations with China, Mexico and Taiwan in the mix for a total of 338,600 MTs on beans. Even though wheat sales were poor as expected and 75% below the four-week average, making it a marketing-year low, the focus still points to the dry Northern Plains now and the potential loss of acres that could switch to row crops.
The wheat bounce overnight allowed corn values to recover as the tightening of domestic cash supplies and strong cash basis bids maintain strong support. Central IL corn is bid at $.24-.25/Bu over May corn futures, while St. Louis corn basis is bid at $.40/Bu over. The cash corn premium will underpin May corn futures into 1st notice day in several weeks. There will likely be no deliveries unless futures narrow the basis of value.
CONAB soybean estimates had their bean crop at 135.5 MMTs, with the corn crop at 109 MMTs. Inside of the range of estimates but above the average.
The winter corn areas of Brazil will hold in a warm/dry weather pattern for another 10-14 days. The need for regular rainfall is dramatically rising, and a deeper cut in winter corn yields is feared. The dry season starts in May. Other than showers of .4-1.25″ across Mato Grosso in the next few days, a below-normal rainfall pattern will persist across Central Brazil. The best chance of rain is with a weak frontal pass across Mato Grosso in the Friday to Sunday period. After that, the better performing EU/Canadian models offer a new 5-7 day stretch of dry weather.
On Wednesday, cash cattle trade was $3 higher in the south at $120, with light trade in the north quoted at $121-123, which is $3-5/cwt higher from last week. Cattle slaughter at midweek totaled 345,000 head or 13,000 head fewer than a week ago. Amid reduced production, the boxed beef rally continued Wednesday. The choice cutout gained $3.54 to $266.31, and select rose $3.89 to $255.19.