Wheat leads the morning weakness.

Morning grain futures find wheat sharply lower with corn following, while soybeans try to stay firm on Chinese interest. Wheat futures are on retreat, with rain forecasted for the dryer HRW wheat belt next week. Headline watching of the Ukraine/Russian conflict still finds continual discussions of truce talks, but continued combatant action simultaneously grows. Russia launched missiles into Lviv overnight, which destroyed an aircraft repair center. This is now the first strike onto a Western Ukrainian city while fighting continues in Central and Eastern Ukraine.

US Pres. Biden will be talking to dated Chinese president Xi, seeking support for the coalition effort against Russia’s aggression. China has been quiet and stands to benefit from continuing economically with Russia. But, Pres. Biden is likely to remind China sunshade will come with consequences. The US ag attaché to China estimated that they would import 100 MMTs of beans to finish out 2021/22, compared to the WASDA forecast of just 92 MMTs.

Malaysian palm oil likely peaked as prices declined sharply by 408 ringgits at 5,761 RM/MT. This is a break of 24% off the highs and indicates a seasonal top. Malaysian palm oil supplies start to rise moving forward. Indonesia raised export levy tax to a maximum of $375/MT and removed the 30% export volume curb. This helps loosen up supplies as well.

The Buenos Aires Grain Exchange noted that early corn/soybean yield results were disappointing, and should that trend persist, additional crop reductions will occur. Currently, they estimate the Argentine soybean crop of 42 MMTs with corn and 51 MMTs. This with only 7% of the corn harvest complete and soybean cutting just starting.

Live cattle closed firm on Thursday will feeder cattle struggled with the higher corn trade. Cash cattle actively sold Thursday at $1 38 in the South, which was steady with last week. Box beef values were mixed with choice down $1.03 and select gained $0.41. Both box beef values show weekly gains for the week.

Beef exports were steady last week with 36 Mil pounds exported and sales of 43 Mill pounds. Cumulative beef exports are lagging last year’s record by 12%. Outstanding sales are up 15% from last year and are record large. Total export commitments are 104% of last year, while the USDA forecasts an annual output of 96% compared to last year. The large outstanding volume suggests USDA is way too low in their assessment. Cattle futures are in recovery mode and have significant resistance on the June contract above 138.00.