It's new month and new crop production threat.
Grain futures moved sharply higher overnight, lead by Minneapolis wheat on concerning heat and dryness in the Northern Plains and upper Midwest. A seasonal Ridge of high pressure is forming across the Central US and retrograding slowly westward into mid-June.
A high-pressure Ridge will produce extreme heat of upper 80’s to lower 100’s across the Northern US Plains, the Southern Canadian Prairies, and the Northern Midwest. Fargo, North Dakota is forecast to reach a 99-degree high on Friday and 100 degrees on Saturday, with higher temps throughout the western part of the state expected. This extreme heat amid limited soil moisture will produce acute crop stress. 90’s hold across the Dakotas into June 10th. The coming hot/dry Northern Plains weather will allow for spring wheat futures to be the upside leader this week with corn/soybean futures worried that such heat/dryness could be more commonplace in the weeks ahead. The EU weekly forecast holds heat across the N Plains/NW Midwest into July.
There was patchy weekend frost in N Iowa, ND, MN and WI early Saturday morning. That frost could lower today’s first corn crop condition ratings from 69-72% to 66-68%. The USDA’s first corn rating will be just average, not optimum as last week Wednesday’s trade attitude carried.
The current forecast offers limited rain for the N Plains and the Northern and Western Midwest over the next 10-12 days. The EU model keeps placing a chance of rain across the N Plains in the 10 day, but the rain is not pulled forward into day 9th or 8th. Both models offer improved rainfall chances in the 11-15 day period, but the confidence on any rain that far out is low. The 11-15 day forecasts has not been doing a good job in either North or South America.
A Ridge of high pressure holds across the North Central US which will produce 9-10 days of dryness with extreme heat starting Thursday. High temps across the Dakotas will and W Midwest will range from the upper 80’s to the lower 100’s. This extreme heat along with limited rain will deepen the existing drought. The extreme heat wanes slightly in the 11-15 day period with a few showers during June 11-15th. This a concerning weather pattern that is pushing MN wheat back to recent highs and row crops re-evaluating production risk.
Cattle futures have a weaker opening outlook with gains in corn pressuring feeders. Cash cattle trade last week was mostly around steady at $119-120 across the Plains. However, some trade in Texas was quoted as low as $116. The early week outlook is steady to lower on expanding summer supply and expectations for slowing summer beef demand. The cash beef trade was mixed last week. The choice cutout pushed to a new high and gained $5.80, while the select was $1.41 lower at week’s end. A top in the beef market is expected to be confirmed this week.