India lowers its wheat crop size.
Grain futures had a mixed overnight session until early this morning at around 6:00 a.m., when India announced they were lowering their 2022 wheat crop to 105 MMTs, down from their April estimate of 111 MMTs. The recent record heat since March and the taking a toll on the crop with some private estimates suggest the crop could be as low as 95 MMTs based on yield data and collections to date. High-level Indian government meetings are underway following this report, with India considering restricting its wheat exports only after recently opening them in March.
The Indian wheat story bolted wheat futures higher by nearly $0.40 in one hour, lifting row crop prices that were trading mostly unchanged in the early morning hours on forecasts of warming temps next week in areas of the Midwest to prompt more widespread planting.
The EU announced its toughest sanctions yet against Russia, with the EU agreeing to phase in an oil embargo and sanctioned a critical Russian bank tied to Putin that is important to Russian agricultural trade, Sberbank. This pushed oil prices again higher overnight to 106.50.
A warmer weather pattern is in the forecast for the Central US and will allow crop seeding next week across the E Midwest. Seeding delays will struggle again in the NW Midwest/N Plains with rains returning in the 6-10 day period. Planting in the Dakotas will see widespread action delayed until the last half of May. Next week, the forecast produces a break as a high-pressure Ridge builds across the Eastern US and shifts the jet stream northward. This allows seeding to start in the E Midwest by the middle of next week, with temperatures warming into the 70s/80s for daytime highs.
Cattle futures are called steady to lower after closing well off their highs on Tuesday and being rejected at the 50-day MA. The cash trade has been quiet so far with the firming trend presently. Light trading began in the north at mostly steady prices of $145-146 live and $232 dressed, whereas there was a report of $142 in the South, which was two dollars higher than last week. Recent weakness in corn prices has supported feeder cattle which also through support into the life trade early this week. Primary resistance targets on the June contract on renewed strength will be significant at 136.50-137.50.