Grain futures gapped higher in the overnight session.
Grain futures gapped higher overnight on follow-through buying from Friday's positive technical close. Dryness on the Brazilian corn crop is now creating a universal thought that the Safrina corn crop is likely producing a Brazilian total corn crop under 100 MTs. The only active contracts that made new highs overnight was July corn, bean oil and the Minneapolis wheat contracts. This afternoon's planting progress data will be traded in the night session. It is anticipated that corn seedings will be near 50% through yesterday, with soybeans nearly 1/3 done at 32%. The current Midwest rains may slow planting in the next few days, but outside of the N Plains and NW Midwest dryness, the crop is off to a favorable start.
CBT preliminary open interest for Friday showed a gain of 3,105 contracts of corn and 2,198 contracts in wheat, while soybean open interest fell 1,965 contracts. May futures have liquidated, with the contract becoming commercial relative to existing cash positions. Cash corn basis levels keep rising as end-users seek supply. There were 200 contracts of Chicago and 5 contracts of KC wheat, 488 contracts of soyoil, 9 contracts of soymeal, 66 contracts of soybeans, and 16 contracts of oats tendered for delivery against May futures. No corn has been tendered. The delivery of 200 contracts of May Chi wheat was larger than expected and considered slightly bearish to Chicago wheat. You need to feed a bull every day, new bullish news is becoming thin, and last night's gaps could be Turn-around Tuesday's targets to plug.
Brazilian winter corn crop estimates are in fast retreat amid dry/warm weather over most of Central and Northern Brazil. Some needed rain fell across the Mato Grosso and MGDS on the weekend, but other areas were dry. The 2-week weather forecast maintains a dry weather trend into May 15th.
Several spring storm systems will transverse the Central US over the next 10 days to produce near to above normal rain. 10-day totals here will be in a range of .5-2.00″ for crop areas south of I-80. To the north, rainfall totals will be less with summer drought concern building. There are signs of the jet stream shifting northward, so there will be rain chances for the Dakotas during the 11-15 day period. However, a Central US High-Pressure Ridge is expected when this change occurs, leading to dry/warming weather in the remainder of the Central US.
The cattle trade went out last week with live cattle closing firm and feeders lower, leading to a mixed outlook to get the week underway. Feeder cattle are struggling as deferred live cattle are not keeping up the pace to pay for rising corn prices. Negotiated fed cattle trade was lower last week. Cattle across the Central and Southern Plains brought $118 to 119 last week or $1 lower, while cattle in Nebraska moved at $119 to 120. The early week outlook is lower. While cattle inched lower, the boxed beef market soared to historic gains. The choice cutout gained $12.73 to $296.50, and select rose $10.92 to $283.05.