Turn-around Tuesday on time.
Monday’s shellacking led to a turn-around Tuesday overnight as grain prices recovered alongside equity valuations. The upcoming WASDA report on Thursday and the developing building drought in Europe create a new catalyst for price appreciation. The European weather forecast for W and N Europe for the next two weeks has temperatures going from warm to hot with moisture non-existent. Another region of the world that produces wheat again is taken off of the abundance potential list.
Estimates for this Thursday’s stocks data have 2021/22 corn lowered by 28 Mil Bu to 1,412 Mil Bu, soybeans are lowered by 35 Mil Bu to 260 Mil Bu, while wheat is anticipated to rise by 8 Mil Bu because of slow exports to 686 Mil Bu. New crop stocks at this point for corn are guessed at 1,352 Mil Bu, which is down 60 Mil Bu, beans 317 Mil Bu off 57 Mil Bu and wheat is put at 659 Mil Bu, down 27 Mil Bu. US and world ending stocks look historically tight with just normal weather and the USDA utilizing a record yield of 181 BPA, which is ironic with the crop not going in at an optimum time. It’s anticipated that WASDE will use a trend calculation for corn at 181 BPA and soybeans at 51.5 BPA.
Yesterday afternoon NASS reported that through Sunday, 22% of the corn crop was planted, 12% of soybeans, and 27% of spring wheat crops. This compares to a year ago at 64% corn, 39% soybeans, and 67% for spring wheat. 2022 will be a late seeded year, questioning the potential to assume 181 Bu/acre this early in the season.
The forecast for the Central US has a Ridge of high-pressure dominating, which will push the jet stream northward into S Canada. This pattern allows for sunshine and dry weather to produce summerlike forecasts for the Midwest/C Plains, with temps ranging in the 70s to lower 90s. Extreme heat will continue across the S Plains, with the drought looking to worsen and reemerge across Kansas/Nebraska and the week following. The recent rainfall was an interlude to an overall drought pattern that persists in Kansas and Nebraska. There will be a few widely scattered Midwestern thunderstorms, but no rain seems excessive to allow planting to progress. The Northern Plains stays wet with frequent storm systems this week, with a break back to normal rainfall next week.
Live and feeder cattle futures recovered from heavy losses yesterday, with technical support giving way early in the session due to the carnage in the equity markets. But the discounted cash and the emergence of strong midday retail values supported the front of the live cattle market. Gains remain limited by concerns of further macro market weakness and the selling in the equity/ energy markets. Cash trade is anticipated to be steady this week to possibly firmer. Retail values had the choice box beef gaining $3.85 to 258.29 while select carcasses were lower by $1.93 to 243.13 On hundred and 30 one loads. Warmer temperatures will help demand after the cold spring delay with some potential growing demand. The estimated slaughter yesterday was 121,000 head which was 10,000 head above the prior week with heavier weights.