Wheat futures lead the overnight price.
Grain futures had seen strength all night, with wheat futures rising as concerns grew that India would eventually ban wheat exports. Indian wheat yield/collection data as the harvest is 50% complete are already disappointing, with commercial estimates of Indian wheat production possibly as low as 93-97 MMTs. Such a low crop will elevate India’s risk of restricting or banning wheat exports before June 1. A loss of Indian wheat in the world market would be significant amid the Russian war grants Ukraine and the likelihood that Argentine farmers are planning to plant less wheat due to soaring fertilizer costs. Original thoughts that India would export up to 12 MMTs of wheat, but now, with the concern of a lower crop, many think that estimate will be cut in half.
Paris wheat futures went on to a new contract high last night for the new crop September hitting €397 dollars/MT. If India bans wheat our exports, this would push wheat values domestically back to contract highs as the US and the EU, and any leakage that comes out of Russia will be needed to fill world demand.
A host of energy/metals/commodities are higher after the Federal Reserve raised interest rates only to the widely advertised .5% increase (there were fears of a .75% increase) and affirmed there would be no .75% rate hikes in subsequent meetings. They will likely be contained at .50%. This left the commodities and stock markets with the mentality of the break on old news.
Malaysian palm oil futures stumbled 371 ringgits overnight from profit-taking that’s evolved from slower than expected late April export demand. This 5% loss pulled palm oil from record highs and pushed selling into rapeseed, canola and soybean oil futures.
Central US weather forecast has storms passing through the Central and Eastern US over the next 4-5 days. Then there is a break next week as a high-pressure Ridge builds across the Eastern US and pushes the jet stream northward with storms targeting the N Plains and NW Midwest, which will continue to find planting delays. Temperatures rise to the warm 70s/80s for daytime highs next week, allowing planting progress. One growing concern is how quick this ridging across the Central and Eastern US has occurred with the first occurrence of the year. This has some concerns that it could be a preview of the summer weather pattern.
Cattle futures are called mixed for Thursday, with significant resistance now noted at the 50-day moving average presently at 136.00. There is still a large price gap over the markets on the charts from the last Cattle on Feed report. The market will need more positive news to press into that price window. Light cash trade began building on Wednesday with the $140 cash trade in the South, steady with last week, and the North ranging around $146. Northern dressed trade was at $232, which was steady with last week. The lack of movement has placed pressure on the front of the cattle market. Current domestic demand is described as a wet blanket over the market due to the overall rain that has kept spring grilling limited. Feeder cattle will be watching for new strength in feed grain prices, limiting their gains.