Grain futures continued gains overnight.
Grain futures are mostly higher this morning, but initially corn and soybeans struggled at the opening last night on better-than-expected corn crop condition ratings. Hot/dry Central US weather concerns created further buying interest to absorb that weakness last night. The NASS reported that 76% of the US corn crop was rated GD/EX, 2% better than last year and 9% better than the 5-year average. Nebraska, Iowa, and Pennsylvania corn were the best-rated state crops. On the other hand, US spring wheat was rated just 43% GD/EX (down 4% despite rains), with 80% of the crop emerged.
New cash Chinese corn demand emerged in Ukraine with European traders discussing that China booked as much as 1.0 MMTs of Ukraine old-crop corn for shipment in August. China remains active in seeking August-October world corn. Private Brazilian corn estimates are shrinking, with brokerage firm StoneX estimating 2021 all Brazilian corn crop at 89.7 MMTs vs their estimate of 100.25 MMTs back in May. WASDE is expected to make another sharp cut in its June report.
The Central US weather forecast offers searing heat/dry weather conditions for the next 7-9 days with moderation in temps in the 10-15 day period. The Dakotas are forecast to see high temperatures exceeding 100 degrees on Friday and the weekend, producing acute stress on corn/soy seedlings and jointing HRS wheat. A strong high-pressure Ridge will progress slowly eastward over the next 7-9 days, which will limit rainfall and cause extreme heat with highs ranging from the upper 80's to the upper 90's. Neither the Canadian nor European models offer much rain over the next 9 days. The EU model has rain for IA on day 10, but confidence in this rain is low.
Yesterday's chaos with the JBS cyber-attack created a sharply lower opening in cattle yesterday with feeder cattle also struggling with higher feed valuations. Support emerged during the session, allowing cattle futures to recover closed with moderate losses. The higher start is anticipated today as JBS has announced that most plans will reopen today with normalized operations. Fears of a shutdown that could last almost a week were unfounded. Cash cattle markets were quiet at the start of the week. The outlook at midweek is steady to $2 lower on expanding supply. Cattle slaughter for Monday was reduced to 94,000 head, 27,000 head less than a week ago, and 21,000 head fewer than a year ago. Reduced production sent boxed beef values sharply higher. The choice-value rose $3.59 to $334.56, and the select value jumped $5.55 to $306.45.
National pasture conditions have improved moderately in the last two weeks. However, 39% of national pastures are rated as P/VP. P/VP ratings hold at 67% in ND and 40% in SD versus an average of 12-14%.