Post-crop report correction in grain prices continues.
Grain futures continue their post-crop report correction overnight, with only corn posting and early session rally on the dryness for the winter corn areas in Brazil before faltering to near steady. Wheat futures opened steady to lower on light showers Sunday in North Dakota that turned to snow accumulations of anywhere of 1-6 inches. The forecast offers limited moisture and ongoing cold temperatures for the next 10-14 days. But the moisture was enough to put a correction into what has been a sharp rally in spring wheat last week. The snows are a help but far too limited to end a deepening and dire drought. Central US weather looks cold/dry into May 1st.
Malaysian palm oil futures posted sharp losses, with the May futures contract down 93 ringgits at 3,962 NM/MT. Tight stocks will underpin the Malaysian palm oil market, but a seasonal increase in production lies ahead in May/June. May Paris wheat is trading down €2.00 at €210.75/MT in a correction from last week's rally. Dryness across Northern Europe is becoming worrisome as the crop is in the vegetative growth stage. China's July Dalian corn fell 9 cents/Bu to $10.42/Bu while July soymeal fell $9.60/MT to $522.90/MT. China remains aggressive in importing feedstuffs and selling domestic rice/wheat reserves to pressure their local feed markets.
The winter corn areas of Brazil hold in a warm/dry weather pattern for another seven days. There could be a few lite showers in the 6-10 day period with totals of .2-.8″ according to the EU/Canadian forecast models. The US GFS operational model is too wet and has been too wet for weeks. Confidence with lite showers some 8-10 days out is low. The EU and Canadian models are maintaining the dry/warm trend. High temps hold in the 80's/90's, accelerating the drawdown in soil moisture. Corn crop stress is increasing daily and the dry season normally starts in the first 2 weeks of May. An estimated 30% of the Mato Grosso Du Sol corn crop has seen less than .50″ rain since it was planted back in late February and early March. The concern for Brazil's winter corn crop is rapidly rising with Brazilian cash corn prices at a record high above $7.25/Bu.
After rushing higher most of last week and scoring contract highs on Thursday, Friday's collapse in futures prices but the market back to just slightly higher on the week for the June futures contract. The cash cattle trade was sharply higher last, but funds began taking profits as cash and futures converged. Cattle in the S Plains moved at $120-121 or $2-3 higher, while cattle in the N Plains changed hands $123-124, $5-6 higher. The early week cash outlook is steady/firm. The choice cutout was $19.32 higher for the week on Friday at $272.17, and the select value rose $17.10 to $264.07. Excluding last spring's Covid rally, the cutouts are at record highs. The April WASDE report slightly lowered Q2 beef production, but at 6,910 Mil Lbs will still be record large. Q3 production is forecast 2% less than a year ago.