Commodity values higher overnight.
Commodity futures opened higher in the evening session and moved higher throughout the night session, into the release of the 7:30 a.m. CPI data. It came in at the lower side of expectations at a rate of 8.5%, with a range of guesses of 8.3-9.1%. Either way, it's the worst in 40 years. With the US dollar over 100.00, it implies the Federal Reserve will take an aggressive stance moving forward, likely raising rates by .50% at several upcoming meetings.
The Goldman Roll continues today with funds rolling out of the spot May contracts into deferred's, which was prevalent Friday and Monday. Overnight action shows spot contracts at par with deferred's. The Goldman Roll continues through Thursday, the week's last trading day, with markets closed for Good Friday.
Friendly for corn over the summer is that the Biden administration is expected to announce today they will allow ethanol at a higher blending rate to combat soaring gasoline costs. The directive will allow consumers to buy gasoline blended with 15% ethanol during the summer driving season. It's thought that this will use another 25-40 Mil Bu of corn in the US ethanol grind. This may be a gateway to ultimately 15% ethanol year-round if consumers become accustomed to it.
Yesterday afternoon's winter wheat conditions rose 2% to 32% GD/EX, with modest gains showing up in the Pacific Northwest and through portions of the Midwest. HRW wheat ratings are historically low and will likely regress in next Monday's data. With 5% of the US wheat crop starting to head, makes this wheat in dire need of moisture for reproduction. Corn planting did not move forward over the past week, with only 2% of the crop in the ground.
Egypt is seeking only European wheat for a tender that closes April 13 with quantities depending on price. The avoidance of Russian or other Black Sea wheat supplies has caused a sharp rally in Paris wheat futures overnight, gaining as much as $15/MT before a late retreat.
Snow gets underway across North Dakota and portions of the Intermountain West, with totals potentially across North Dakota ranging from 16-30 inches. Showers occur from Arkansas into the Ohio Valley, with rainfall totals exceeding 1.50″ from the Delta north. The extended 11-15 day forecast does offer some moisture for the plains, and the question is whether they will verify. The EU model is warmer through the Central US in the GFS is much cooler.
Live cattle and feeder cattle futures closed higher yesterday, with June closing just below the 200-day moving average. May feeder cattle fell to the lowest price since last June and then rallied $3 does 00 off a low into the close. Sharply higher feed rains will likely put downward pressure again on feeder cattle today. Cash markets were lightly treated as typical for Monday, and Western Midwest was quoted at $141-142, which is $1-2 higher than last week. Box beef values were mixed to start the week with choice gaining $1.64, while select value was down four cents. The choice cutout has rallied nearly $20 since bottoming in early March, since the seasonal rally got underway a few weeks late, but typically trends would allow for another $50/CWT.