Wheat and corn find renewed buying, soybeans stall at 17.00
Grain futures opened firm overnight on dry HRW wheat weather, lack of any Russian/Ukraine resolution, and Midwest cool/wet weather. Wheat advanced with corn making new contract highs from the July contract forward, while soybeans retreated from $17.00 as concerns with China’s lockdowns that commerce will slow ports which will become congested. Even crude oil struggled overnight, heading back to below 93.00 on the spot contract on the expected reduced energy needs out of China and the growing thoughts of recession in the US.
The US releases its March inflation data tomorrow morning called the CPI, which is expected to be at 9%. China showed its inflation rate gaining 8.3% in March, down from February’s 8.8 rise. Covid lockdowns in China anticipate affecting their CPI in the months to come.
This afternoon the NASS will release the US winter wheat crop conditions again and early seeding progress for corn and small spring rains. A decline of 1 to 2% in US wheat crop ratings is anticipated from last week’s 30% good/excellent category. US corn seedings are expected to expand to 4-5% with spring wheat plantings at 5-6%. The Northern Plains and Minnesota and Wisconsin will be hit with a foot or more of snow starting Tuesday, ending any planting progress this week in this area.
There is no sign of any immediate ending of the Russian/Ukrainian conflict, as Russia is staging an increase to their war effort against eastern and southern Ukraine with the odds of a cease-fire extremely low. In addition, Russia is bringing in new Russian recruits anticipated to the field by June-July. As a result, the Black Sea looks to be void of any Ukrainian port exports through the rest of the calendar year.
A strong jet stream and a series of storm systems will pass east across the Northern Plains and the Midwest over the next two weeks. Embedded short waves produce Midwest rain every 4-5 days and heavy snow blankets the Dakotas with 12-24 inches of accumulation. The central and southern plains will only see if you Speights of rain with drought conditions worsening into late April. The Delta will endure additional flooding that slow spring corn planting, and cold temps will persist with no lasting warming outside of the southern/central plains. Corn and soy planting will be pushed into late April/ early May.
Live cattle and feeder cattle were lower last week but did recover from early week lows on the June contract near 133.00. Cash cattle mainly were 137-138 on a live basis which was steady to a dollar lower. Cattle in the North brought 138-140 live and 222 on a dressed basis. Box beef last week had choice gaining $3.33 while select was off $2.19. Estimated slaughter margins rose again by $37/head last week and rose to an eight-week high of $334/head. Summer live cattle have topped with major resistance on recovery rallies to 138.00-140.00.