Grain futures trade firm with prior price highs holding.

Grain futures had a mixed start overnight that turned into a firm trade, but no contract highs were scored. Lite rains moving across central North Dakota in the early morning hours could not put pressure on the Minneapolis wheat contract as it continued to add gains over the hard winter wheat class. Dry weather forecasts prevail yet for the Northern US Plains, Canadian Prairies and the Northern half of the Midwest.

Spring seeding will advance swiftly across the Central US, but dry weather poses germination problems across the Prairies, Northern US Plains and the W Midwest as farmers must plant seeds deeper to find enough moisture for germination. The current cold temperatures are limiting emergence and plant growth and looks to remain that way into mid-May. Rainfall is mainly across the southern half of the Midwest, Delta and the Gulf states over the next 10 days. The EU/Canadian weather models maintain their dry theme, while the more volatile GFS model is in line with the EU/Canadian models this morning with the rains farther north into Iowa and Central Illinois. The EU model forecasts a worsening of the drought across the Canadian Prairies, Northern Plains and the Northern 1/3 of the Midwest.

The Brazilian forecast lacks any rain for Brazil's winter crop over the next 2 weeks. The wet season has ended across N Brazil, and drought will be deepening and causing further reductions in corn crop size heading into May. There is now growing potential for a Brazilian corn crop of 91-94 MMTs. The USDA just last month still had 109 MMTs. There is a Reuters newswire reporting that the low Parana River level is trimming Argentine ag exports and raising export costs as water levels fell below 1 meter on Tuesday. Vessels must load out less grain, vegoil and meal in Rosario and top off as they leave for the Atlantic. The process of “topping off” can add $12-20/MT to cost and make transit more time-consuming. This is similar to what occurred in 2020 during May.

There are rumors that China has been actively securing Brazilian soybeans for later this summer, and they are also looking to book more US new crop corn. It's anticipated the Chinese are seeking 1.5-2.5 MMTs of US corn. This is why new crop corn pricing firmed up relative to old crop over the past 48 hours.

Cattle futures had a sharply lower session yesterday with low end closes. June cattle are now under the 200-day moving average for the first time since last October. Even June hogs on the hot index close at a higher price yesterday the June cattle. This has never happened since hogs trading switched to the lien index two decades ago. Feeder futures continue to fall as the market extracts large premiums built into 3rd and 4th quarter prices. The cash feeder index was up $.13 at $132.76. May feeders are $3 under the index, while steers for fall delivery are still $13-16 over. But the narrowing price ratio between fed cattle and corn prices will keep steady pressure on feeder prices.

Cash trade on Tuesday was up $.50 at $118 in Nebraska, while cattle in the Western Midwest brought $117-119 or $3 lower from last week. Since Boxed beef moved $1.92 better on choice at $301.22, and select beef traded up $.12 at $283.91.