Grain futures sharply lower overnight at the start of big rains.
Grain futures moved sharply lower overnight, even dragging Minneapolis wheat lower briefly in its wake. Minneapolis jumped $0.15 off of its lows into the night session close. Soaking rains are starting across the Midwest as expected and anticipated to be off and on for the next five days. A storm fired overnight in Central Nebraska and has pushed into Western Iowa this morning, providing a new round of significant rainfall. Traders right now are strictly focused on the weather with no demand considerations.
A survey of their members, including planter equipment applications representing 4.2 Mil acres, Farmers Business Network (FBN) estimated 2021 US corn seedings at 92.9 Mil acres with soybeans at 86.5 Mil acres. Both FBN seeding estimates were below general trade expectations. A year ago, FBN correctly predicted that US farmers would idle nearly 10 Mil acres of US cropland in the Prevent Plant Program with smaller corn seedings. Their 2021 US soybean estimate of 86.5 Mil acres would be down 900,000 acres from March 1 NASS intentions, and if correct, it would be exceptionally bullish. FBN's '21 US corn seeding estimate is up 1.8 Mil acres from NASS, but well below the up 3-5 Mil acres that the industry expects.
The overnight primary weather models added rainfall to their 10-day forecast. The EU/GFS called for flooding rains of 4-8.00″ of rain from SE Iowa into Illinois and Indiana. Locally, some areas will see greater than 10.00″ in the coming 5 days. US producers would prefer rains of 1.50-2.50″ that do not produce flooding or leaching of fertilizers and other crop nutrients. Unfortunately, the Northern Plains and most of Minnesota will hold in an arid weather pattern, including the Canadian Prairies. The NW US and W Canadian Prairies will be hit with record heat late next week as strong high-pressure Ridge builds aloft. Highs will reach into the 100's as far north as the Peace River Valley in W Canada. The extremes of the current North American weather pattern are noteworthy with critical row crop reproduction periods still ahead.
Cattle futures had a mixed trading day with a lower close, with feeder cattle finding selling with all months failing to breach last week's highs on feed grain weakness. The cash trade again was light on limited demand but prices did hold higher for the week. Light sales were reported in Nebraska at $126 live ( $2) and $197 dressed ( $1). Cattle slaughter at midweek totaled 356,000 head, 1,000 less than last week and 5,000 more than a year ago. The boxed beef market continued its retreat. The choice cutout was down $3.70 and select fell $4.34.
The June Cattle on Feed report will be released Friday. Ahead of the report, the average trade estimate calls for a May marketing rate at 123% of last year, a placement rate of 95%, with the June 1 feedlot inventory at 101% of a year ago. If realized, the May placement rate would be the smallest in 5 years. The inventory would be 1,000 head over the previous record set in 2019.
The all Hogs and Pigs report is out at 2 o'clock today. All hogs at 97.7, kept for breeding 98.9, kept for market 97.6.