Spring wheat leads overnight price strength.
Grain futures mainly moved higher overnight, with corn drifting in the early morning session. Overnight strength was tied to follow-through buying from yesterday's midmorning recovery and close. Corn and soybeans yesterday held key support values, as China booked another 5 to 7 cargoes of beans, and there is talk that they have fresh interest in US new crop corn. The northern half of Iowa missed rains and is still caught in the deepening drought with Minnesota and neighboring ND & SD.
Minneapolis wheat was the upside price leader overnight amid the deepening Northern Plains drought and Western Canadian small grain crops which are now suffering and will continue and coming heat and dryness. US spring wheat, oat and barley crops are suffering from a lack of rain with near to above normal temperatures forecast for another 10 days. Today is the option expiration date for the July contracts and could create continued volatility, becoming the norm.
Next week the average US trade estimate for Wednesday's NASS seeding estimates is 93.8 Mil acres of corn (up 2.7 Mil acres from March Intentions), 89.0 Mil acres of soybeans (up 1.7 Mil acres), with US spring wheat at 11.4 Mil acres. The average US trade estimates of June 1st corn stocks is 4,144 Mil Bu, soybeans 787 Mil Bu with wheat at 859 Mil Bu. NASS will release their June Stocks and Seeding Report on Wednesday at 11 CT.
The overnight forecast models are slightly wetter than their midday solutions of yesterday and consistent that heavy rain will drop across the Central/Eastern Midwest over the next 5 days. Already heavy rain has pounded Illinois, Indiana and Missouri with totals of .3-3.50″ from embedded T storms. Missed was the northern half of Iowa, which will be closely monitored this weekend in terms of rainfall. Limited rain is forecast for the N Plains and Minnesota, where the drought will deepen. The North American Ridge/Trough pattern will only slowly progress east over the next 10 days. The Midwest front will sag southward into the Delta/S Plains as the NW Midwest and N Plains enter a new length arid weather trend. A historic Western North American high-pressure Ridge will fan record heat over the PNW and W Canada with numerous days of triple-digit high temps. Slowly, this significant Ridge will shift eastward during early July.
Cattle futures recovered yesterday from early losses on the session while feeder cattle closed higher feed costs softer on the session. Cash trade for Thursday was again light and limited to Nebraska. Limited trade was quoted at $125-126, steady with earlier in the week and $2-3 over last week. The south is expected to follow with steady to higher trade today.
Today is the Cattle on Feed Report, and upcoming the NASS will release the semi-annual Cattle report next month. So far, the weekly slaughter data is pointing towards a shrinking herd. The cumulative beef cow kill is 109% of last year and the largest since 1997. At the same time, there is no indication of heifer retention. Heifer slaughter as a % of total fed cattle kill is 38%, the most in 10 years. The contracting herd sets the stage for a longer-term cattle bull market that will unfold in the coming years.