The third lower Monday in a row gets the week started.
Grain futures started the week lower on a non-threatening central US weather forecast, along with sporadic feast/famine rains that occurred across the Western Dakotas over the weekend. Current breaks in prices will again bring about new demand for corn and soon-to-be wheat. Egypt seeks wheat for August 8-22 shipment with offers being accepted today, with sourcing likely to be Eastern Europe or Russia. China has secured a record amount of US and Ukraine new crop corn last week, with US new crop purchases estimated at 11.5 MMTs and Ukraine at 4.5 MMTs for a combined new crop purchase total of 16.0 MMTs. With China being so active this early (crop year starts on September 1) tells you that China has an acute feed grain shortage. There are new expectations that China will import 9-12 MMTs of wheat from all origins in 2021/22. China is struggling with developing dryness for its winter wheat & summer row crop areas after weeks of below-normal rain.
Rain fell across the Brazilian winter corn area on Saturday with totals of .1-1.30″. The coverage of rain greater than 1.00″ was just 9% of the area. Patchy frost was reported this morning across Southern Brazil and Northern Argentina as the winter season arrives. Following 7-9 weeks of hot/dry weather, it is doubtful that the Brazilian weekend rain had much if any positive impact on Brazilian winter corn. Many analysts maintain a winter corn production estimate of 63 MMTs and a total Brazilian corn crop estimate of 91-92 MMTs. Brazilian cash corn prices are holding well above $8.00/Bu this morning.
This afternoon's crop progress reports expect to find that 91-92% of the US corn crop and 80-84% of the US soybean crop will be planted thru Sunday. US corn crop condition ratings will be issued on June 1, with more than 50% of the crop emerged. Extremely volatile pricing is becoming the norm, but with the US cash corn basis likely to remain strong as China loads out its massive purchases, large breaks will be used for traders to position long corn and beans for the next volatile weather scare.
The US weather forecast is currently non-threatening for Central US crop production, but better rains are desired for the N Plains and throughout the Western half of the US, where soil moisture is at its lowest levels in decades. As early summer arrives in June, it's expected that a Ridge of high pressure will set up across these dry soils and fan Central US heat. The odds are high that there will be several lasting Central US weather scares this summer, with there being no indication that the Dakota drought will be diminishing. The Northern US Plains and Canadian Prairies are at drought risk. The best chance for Central US rainfall is midweek as a potent short wave is pulled across the Central Plains and into the Midwest. Rainfall totals are estimated in a range of .25-1.50″ with a few locally heavier amounts. There is a chance of rain somewhere in the Central US daily into June 3. Midwest temperatures will be variable without any extreme heat. Highs will range from the 70's to mid 80's.
Cattle futures ended on a strong note Friday ahead of the monthly Cattle on Feed report, which was considered bearish to pre-report estimates. April cattle marketed were at 133% of a year ago (133% expected), cattle placed were 127% (123% expected), and the May 1 feedlot inventory was 105% of 2020 versus expectations of 104%. A lower start is anticipated. Last week cash cattle trade was steady to $1 higher last week at $119-120, while the cash beef trade pushed on to historic highs. Boxes of choice beef were $8.23 higher for the week at $325.17, and select boxes were $9.12 higher at $302.31. A top in the beef market is anticipated this week as Memorial Day demand has been filled.