Grain futures do an early Tuesday morning price flare out.
A high volume of overnight trade with May corn pushing the 40 cent limit along with May soyoil up to 2.50 limit. This created the emotional flare out we suggested in the Monday newsletter that could occur early Tuesday morning, as upside volume shoots higher. But like an exploding balloon upward releasing its air, a stall could occur after such a magnitude of a rally. It's classic for bull markets to make Tuesday morning highs, especially in the early hours, and stall out in price into Wednesday. Any high that occurs is just part of the bullish protocol for early week sharp rallies that can still see renewed buying later in the week.
The Brazilian weather forecast is arid for the next 2 weeks as hope fades for winter corn yields. Brazilian corn will enter its reproductive phase starting later this week and continue into late May under a dire flash drought. A sub 100 MMMTs 2021 Brazilian total corn crop is forecast due to drought stress.
Stats Canada was out with their 2021 grain/oilseed seeding intentions this morning. Canadian farmers are suffering from acute dryness and in need of rain. Canola seeding was put at 21.530 with all wheat acres at 23.26. The average guess for all wheat was 23.7 Mil, with canola at 22.6. Both are considered friendly.
The US weather forecast from both the EU and the GFS models this morning. Several spring storm systems will transverse the Central US over the next 10 days to produce near to above normal rain. The rainfall even makes it into the drier areas of Nebraska and Iowa, but misses most of the Dakotas. There are signs of the jet stream shifting northward, so there will be rain chances for the Dakotas during the 11-15 day period. Whether the rains fall in the locations and quantities forecast will be closely followed. For now, improved warm/wetter weather is offered for the Central US.
Cattle futures recovered from early morning weakness on Monday, as the break to new lows in the June contract found demand which lifted prices into the close. Cash cattle markets were quiet on Monday on limited packer demand. The USDA's Afternoon slaughter report picked sales of around 1,500 head sold for $118-120 or $1-3 under last week's 5 area average, but not enough to call a market trend for the week. The early week outlook is steady. Cash beef trade was higher to start the week. The choice beef cutout gained $1.43, while select boxes gained $2.22. The choice/ select spread turned up late last week, and at $10.85 on Monday is just ahead of the 10-year average.