A new round of contract highs again overnight.
Old and new crop soybeans, along with December corn made new contract highs overnight. The wheat market followed higher on cold temperatures in the low 20 in western Kansas/E Colorado. Wheat is in the boot stage in N Texas where damage is likely, but production has turned heavily cotton over the past decade. Bitter cold damaged jointing wheat in W Kansas and jointing/booting wheat in W Texas and W Oklahoma overnight. Lows reached the lower 20’s in NW Kansas, the mid 20’s in the remainder of W Kansas, W Oklahoma, and NW Texas. University studies show that jointing wheat can sustain severe damage when temps reach 24 degrees for more than 3 hours. The weekly NASS report showed that 17% of NW Kansas, 40% of WC Kansas, and 71% of SW Kansas wheat was jointing. And 41% of the Texas wheat crop was heading & extremely vulnerable. It is impossible to accurately measure bushel losses until HRW wheat flowers. The recent price rise predicated on cold weather has been part of the winter wheat price rally of the last week.
NASS reported that US corn seeding was 8% and soybeans 3% completed in the week ending April 18th. US spring wheat seeding advanced to 19%. 53% of the US winter wheat crop was rated GD/EX, steady with last week, but down from last year’s 57%. Brazil will allow duty free imports of corn, soyoil and soymeal without tax in a highly unusual effort to cool domestic prices following their record large soybean harvest. The 0% tax from non-Mercosur countries will last into the end of the year – December 31st 2021. Brazilian domestic corn values reached record highs late Monday at $7.35/Bu as the winter corn crop withers under a dire drought. Inflationary feed price pressures threaten Brazil's livestock industry, while soyoil imports are needed for biodiesel.
Big basis pushes have not secured cash soybeans/corn, which makes the shorts nervous ahead of 1st notice day. There were reports that some Midwest processors were bidding 90 cents over July soybeans for June and could not replace that day's crush. That type of cash bidding with limited farm sales response has the shorts in May soybeans worried that end users may stand up for CBT deliverable supplies.
US and world weather forecasts are concerning with dry Brazilian winter corn weather for another 10-14 days adding to crop stress. Dryness across N Europe and the US Northern Plains and Canadian Prairies threatens to knife US wheat and summer row crop production. A cut of 10-15 MMTS of Brazilian corn production is a big deal in a world that is already short feed grain supplies. The loss of Brazilian corn will likely prod China to go ahead with its big US corn export program this summer.
Cattle futures were lower for the 8th day in a row, touching the 100-day moving average for the first time since November. Cash markets were typically quiet to start the week and are expected to hold until midweek (at the earliest). The early cash outlook is steady/firm on expanding slaughter margins and strong beef prices.
Boxed beef values quietly pressed higher on Monday. Choice boxes moved $.12 higher to $276.17 and selects were up $.03. It has been a record rally for the beef market, with the choice cutout up more than $66 from the start of the year. Typically, seasonal highs are scored the 3rd week of May for box beef. This year’s high looks to have come early.