Grain futures seek price stability from recent decline.
Grain futures pushed higher in the evening session initially, with corn leading the recovery before stagnation kicked in overnight. Some areas are seeing cash bids on retreat as crushers are slowing their run rates have pulled enough local supply for 30 day needs. Plains moisture is beneficial to a potentially large crop estimate from the Wheat Quality Crop Tour trekking across Kansas. Rains in the Northern Plains are starting unimpressive, but forecasts hold out potential through Monday.
The Kansas Wheat Quality Tour forecast an SW Kansas wheat yield of 56.7 BPA, up from 47.6 BPA in 2019. The Tour's yield last year was 42.7 BPA in a reduced survey due to Covid-19. The Wheat Quality Tour will be releasing a Kansas wheat crop estimate later today. Based on the yield results to date, traders are braced for a monster Kansas wheat crop estimate.
The US 10th Circuit Court of Appeals handed down a victory for the US Ethanol industry. It struck down three small refinery exemptions offered by the Trump Administration as it left office earlier this year. It was a legal vote of confidence in the US ethanol industry and the 2007 US Energy Bill on biofuels. US ethanol producers are back to making windfall profits well into early 2022. Moreover, the EPA is expected to keep biofuel mandates the same as 2020 for 2021 and 2022, arguing for 15 Bil gallons of conventional fuels like ethanol and just over 5 Bil gallons for biodiesel. The 20.09 Bil gallons of combined green fuels would offer certainty and boost the US biofuel industry. ARC estimates that the US 2021/22 corn grind will expand to 5,300-5,400 Mil Bu.
A US Trough/Ridge pattern has formed across with the mean Trough position over the NW US. A Ridge holds over the SE US, which acts to push Gulf upper air moisture into fronts that pass over the eastern edge of the Trough across the Plains. The mean position of the Ridge retrogrades west with the entire pattern to de-amplifying beyond May 24. This produces a zonal pattern with near to above normal temps and near normal rainfall in the 10-15 day period. The SE and SW US holds onto an arid weather pattern. This is an active weather pattern for the Plains and the W Midwest. There is a daily rain chance for the Plains and W Midwest for the next week. Needed rain is falling across N Dakota, Minnesota and Iowa this morning with rains of .25-1.00. The rain is not universal but more localized spot areas so far.
Light cash trade continued Wednesday. Cattle sold steady with Tuesday at $119 in the south and $120 in the north. After rallying $2-4/day for the last month, the boxed beef market almost came to a pause on Wednesday. Choice boxes gained 4 cents, and select rose $.64. Chain speeds improved as packers were able to quicken their kill pace. Ahead of Friday's Cattle on Feed report, the average trade estimate calls for an April marketing rate at 133% of last year, placements of 121%, and a May 1 feedlot inventory of 104%. The sharp increase in marketing's and placements is due to last year's coronavirus shutdown. If realized, the April placement rate will be just above the 10-year average.