Grains are higher to sharply higher after ratings and progress reports.
Grain futures opened firm overnight and continued that way to the night session as planting progress for corn was 1% lower than the average guess of 8%, with Illinois making no headway over the past week. We are obviously behind a year ago progress, but concerns are growing that some areas like the Northern Plains and Central Midwest remain too cool and wet for expeditious progress. Also, the winter wheat conditions score showed another decline in the GD/EX category to 27%, Down 3% from last week in 2% below average estimates.
Stats Canada was out with their Spring Planting intentions report this morning and Canadian farmers did up all wheat acres to 25.03 Mil (24.2 est), durum acres are at 6.22 Mil, oats acres 3.992 Mil with canola at 20.897 Mil. The wheat acreage number was up 1.5 Mil from last year, with canola acres down 600,000 acres. Oats acres showed a gain of 300,000 acres. Spring wheat prices softened at 7:30 after the release of the report.
The grain trade has now become a weather market with the severity of the cold/wet weather across the N Plains while drought plagues the S Plains. Until corn/soybeans are seated, CBOT breaks will likely find willing buyers. US wheat, corn, and soybean balance sheets continue to remain tight with the need for optimum production performance nationwide.
Chilly/dry weather prevails across the Central US into Thursday before wet weather trends return. The areas where the stormy weather continues will stretch from the Northern Plains southward Arkansas with rain totals of 1.00-3.50″. Three storm systems will cross the Central US over the next 10 days, limiting drying and keeping the spring planting efforts slow. The Western HRW wheat areas remain dry with limited precipitation into the middle of May. Any rain that falls will continue to be across the E Plains, away from the heart of the HRW wheat production. As a result, the drought there continues to deepen. The extended 11-15 day period offers cold air across Canada and the N Plains and continued fast-moving storm systems. The N Plains continue to be targeted with the heaviest rains after enduring a massive drought over the last 18 months.
The cattle market closed sharply lower yesterday even though a recovery of $1.00 occurred into the close. Selling in the futures market was aggressive throughout the morning session, especially with outside markets sharply lower, while the cattle market contemplated the heavier than expected COF report from last Friday. The April 1 cattle inventory was the highest on record, and the market needs to balance this new supply picture. June cattle are now back under the 200-day MA, which will keep the selling pressure in the front of the market, which is consistent with our thoughts that the summer cattle market still was in a bearish trend while the winter 2022/23 cattle market experiences the bull market of anticipated shortening supplies.
This week's cash market will likely have a limited impact on summer futures contracts, even though the April contract expires this Friday, and there are expectations of a firm cash trade for this week. Box beef prices were mixed yesterday, with choice down $1.31, while select gained $1.75 on 67 loads. Feeder cattle will likely face follow-through selling pressure today, given the firm tone of the corn market.