Wheat futures lead overnight recovery.
Grain futures are higher this morning after yesterday's blowout lows, with wheat futures leading the advance. Cold temperature risk has the Canadian crop, which is at risk for a freeze, along with newfound demand that Saudi Arabia is bidding for 720,000 MTs world wheat. This morning's export sales were bullish for old crop corn, as old crop corn number was higher than expected, and there are no cancellations. End users are jumping at yesterday's low prices, anticipating that could be the priest summer low, and the weather has to be perfect here forward to justify yesterday's low valuations this early in the season.
Saudi Arabia tendered for 720,000 MTs of world wheat, with the deadline for the offers being Friday. It's their first new crop tender, and many are waiting to see what price that could garner. Russian wheat offers are anticipated to be not involved as a floating tax calculation is still uncertain. Many think Russia will not be a sizable wheat exporter in the first quarter of the new crop year.
Grain futures priced in very favorable weather heading into the long US day holiday weekend, which puts into question, what will long-term models be suggesting when we come back on Tuesday. Below normal rainfall is forecast for the northern Plains and the northern one-third of the Midwest, while nearly daily storms produce near to above normal rain through the Central and Southern Plains along through the Southwest and Central Midwest. The Western US still is in a dangerous drought pattern that looks to's fuel heat this summer. Recent rains in the Northern Plains are only providing temporary relief. It is still Ground Zero, where the drought producers are reporting germination issues still. The 11-15 day period has the GFS model forecasting ridging in the Central US. This could be the building of heat into mid-June.
Cattle futures flared yesterday morning, with feeder cattle likely spiking to chart resistance highs and faltering while the corn and feed grains made lows simultaneously. The negotiated cattle markets in the Plains had traded in a wide range of $116-120 in Texas, steady to $4 lower in some cases. This is why live cattle came off their early highs. Cattle trade in the Central and Northern Plains were quoted at $1 19-120, which still was steady on the week. The box beef market was lower for only the 2nd day since mid-April. The choice cutout was off $0.33 on weakness in loins and brisket. The choice rib value gained over $1, pushing above the 2020 record high.