New contract highs overnight for row crops and spring wheat.
Grain futures bursted higher overnight after Wednesday's strong close, making new contract highs for spring wheat and row crops. There was a return in bull spreading in the soy complex amid rising spot crush margins. New crop corn lifted on growing concerns over the cool Midwest temps and plains dryness with absolutely no rain offered to Brazil as we move into the 2nd half of May. 10-day precip accumulation in far southern Parana is pegged at .10-.25″, but otherwise zero rain is expected across Brazil into May 20.
Chinese markets opened following a 3-day spring holiday, and corn and soy prices were sharply higher in active volume. Dalian corn overnight rallied $.10 per bushel to $10.85. Dalian soy ended $.90 higher at $25.45. Dalian soymeal and oil rallied 2-5%, with oil hitting new contract highs. Catch-up buying in China was anticipated with China's ongoing participation in the global rally important.
Global rapeseed/canola markets have found new all-time highs again, with spot cash rapeseed oil in Europe climbing to $.73 per pound, vs. $.65 just a week ago. Positive crush margins along with worsening drought across the Canadian Prairies is noted. Stats Canada on Thursday will release March 31 Canadian crop stocks. Recall data through December 31 hinted that Canadian canola supplies would be completely exhausted well before the new crop is harvested. Stats Canada stocks data takes on new importance for global oilseed markets.
The US weather forecast has the 5-day Midwest precip totals of .50-1.50″ shifted slightly northward and will now cover the southern half of Iowa and much of Illinois, Indiana and Ohio. Otherwise, the outlook is consistent with prior runs. Arid conditions persist across the Western Plains, North Dakota and Canada into May 15. Cool/wet weather east of the Mississippi River slow seeding/emergence into late next week. Extended range guidance maintains the chance that precip expands into NW Midwest beyond May 16, but confidence so far out is low. It's important that this pattern change be pulled into the 10-day forecast by late week.
After dropping 13 dollars in 30 days, cattle futures rebounded yesterday, even feeder cattle recovered in the face of higher corn prices. Cash markets were quiet at midweek following earlier week trade. The boxed beef rally accelerated on Wednesday. Choice boxes jumped $3.56, and selects were up $2.27. The choice/select spread rose to an $18.60 choice premium. The choice cutout has gained for 13 consecutive days, by an average of $2.21 per day or $29. The choice loin value has led the rally and added $12.29 to the whole carcass value. Note that highs are typically scored in late May ahead of the Memorial Day holiday. A significant correction should follow.