Turn-around Tuesday got underway from the opening tick of the night session, as four days of selling culminated in a low in the Sunday night session that Monday stabilized. The US dollar is testing a 4-month low and threatening to breach critical support at 89.20 set back at the opening of 2021. This is bringing in the re-inflation trade across a host of commodities, with gold and silver posting new recovery highs since their April 1 low.
NASS reported that 80% of the US corn, 85% of the spring wheat, and 61% of the US soybean crop was planted thru Sunday, ahead of the five year average The US oat/winter wheat crops were rated just 49% GD/EX. In terms of oats, it was one of the lowest-rated early crops since 2000. 43% of US pastures are rated poor or very poor, a testament to the low soil moisture that has prevailed across the N Plains for months. The 80% US corn seeding pace argues that farmers may not be seeding all the acres that several private firms forecast. A corn yield drag occurs for seeding after May 15th. NASS will release its 1st condition rating of the US corn crop on Tuesday, June 1st. This rating will be significant and likely near the 5-year average.
Eyes are being kept on China, which has been aggressively buying corn over the past week in the new crop status of 7-9 MMTs. The pace of their buying is record large and shows a desire to expand their feed supplies. China is likely concerned about the Brazilian corn crop shortfall and desires to own supplies, especially during their own soaring cash market. The recent four-day break has allowed end users a renewed opportunity to extend forward coverage with such a long growing season and risk in front of us.
A strong Trough/Ridge pattern is forming across the US with the mean Trough position over the NW US. A strong seasonal Ridge will build across the SE US and retrograde west before de-amplifying on Monday 25th. This lessening of the Ridge pressure allows for more of a zonal flow in the 9-14 day period. The pattern will produce above-normal temps and showers/storms through the Plains and portions of the Western Midwest. Heavy rainfall looks to drop across E Texas/SE Oklahoma, with most other totals ranging from .25-1.25″. Such rain will not end the drought concern for the N Plains, Canadian Prairies, or the Northern Midwest. However, all rain is welcome after weeks of below-normal amounts.
It was a mixed start for cattle trading to start the week, with feeder cattle having the obvious strength from what was still a weakening corn market. August Feeder cattle are up against the 154.00-155.00 weekly resistance zone, which will be seen as a selling zone with corn renewing its strength. Cash cattle markets were quiet on Monday while the beef market continued to rally. The choice cutout gained almost $3 to $320, and select was up nearly $4 at just under $297. Strength in beef should underpin cattle prices.
The Crop Progress report did not show a significant improvement in national or state pasture conditions. Nationally, 43% of US pastures were rated as poor or very poor. This was a 1% improvement from last week, but still the worst rating for the week since NASS began reporting in 1995. North Dakota held steady at 75%, and South Dakota increased 4% to 54%. Texas declined 5%, but at 41% poor or very poor is the worst in 7 years.