Friday morning trade starts at the best price levels of the year.
More of the same old same old, with new contract highs across the board and new all-time highs again for bean oil and canola. Only the winter wheat contracts have not made new contract highs yet but that's a matter of a nickel or so. Tightening US old crop supplies while dry/adverse weather for Central Brazilian, the Northern Plains, NW Midwest and the Canadian Prairies is raising world concern about food inflation and future grain supplies. World exporter stock/use ratios are near or at record lows, so there is no tolerance for any crop loss. Grain futures have quickly rallied this week on the prospect of a Brazilian total 2020/21 total corn crop under 95 MMTs while worry over a North American drought grows. Amid historically tight old crop stocks and China securing new crop US corn, upside price risk remains.
Brazil's weather forecast stays arid for their winter corn crop for another two weeks, with increasing reports of producers abandoning fields on low yield reports. The decline in harvested acres and poor yields has some private analysts opening discussing a Brazilian 2021 total corn crop under 90 MMTs.
Stats Canada crop data out this morning was primarily neutral but friendly to barley. All wheat stocks were put at 16.23 MTs with an average estimate of 16.7. Canola was 6.7 MTs average guess 6.572, oats was 1.844 MTs on an average guess of 1.9. Barley was 2.806 on average guess of 3.3 MTs.
In international ag futures trade, Malaysian palm oil futures soared to a new all-time high with the most active June contract up 219 ringgits at 4,678 NM/MT. Strong export demand and historically tight supplies of world vegoil supplies/stocks is causing an acceleration of the bull market as end users are poorly covered on future demand.
US weather has the three primary weather models in good agreement on the forecast for the next 10 days. The differences start in the 11-15 day period, with each model offering up a differing forecast solution. GFS model wants to build a Ridge of High Pressure across the Central US that is anchored by a Trough on either side of the US Coast. This pattern would be much warmer/drier and likely a harbinger of what the summer weather pattern will look like. However, the confidence this far out stays low, but amid the drying Plains and NW Midwest, it's to monitor. The EU model has arid conditions persisting across the Western and Northern Plains, Canadian Prairies, and the Northern Midwest into May 17th. Cool/wet weather across the Delta, Gulf States, and the E Midwest slows seeding, which slows emergence along with well below normal temperatures. 10-day rainfall totals here range from .5-2.50″ with a few locally heavier amounts.
Cattle futures were higher yesterday for the 2nd day in a row while feeder cattle stayed softer on the corn rally. Thursday's light cash trades were steady with earlier week trends, while the boxed beef market traded higher. Choice boxes moved $1.59 higher from Wednesday at $306.37 and select boxes brought $289.36, up $3.18.