Risk-off continued overnight with equity and energy.

After a firm start overnight, corn and wheat prices move lower to sharply lower overnight following the long liquidation and risk-off attitude of the stock market and energy markets. Also, there is the discussion of UN efforts to restart grain exports out of Ukraine. Still, in the talks, Russia has insisted that numerous sanctions need to be removed against their country before they will agree to unhindered port access. The headline news of the discussions is negative to pricing, while the logistics of it actually occurring is minimal.

The Wheat Quality Council pegged South/Southwest Kansas yields and 37 Bu/acre, down 35% from last year. This created an initial rally in the overnight session on wheat that met selling pressure in the night when French milling wheat opened the down $6/MT on follow-through selling from yesterday. The tour’s final yield and production estimates will be out after today’s close.

The European weather forecast is wetter in northern France next Monday-Wednesday, with accumulations pegged at .50-1.00”. This is similar to the US plains, with rains of 1-2” to fall across the bulk of OK and S KS next week. The rain in the Plains will not benefit wheat, but it will undoubtedly help boost corn/soy/sorghum moisture to improve row crop potential. The wetter European forecast will stabilise soil moisture and help crop health. However, it does appear to be an interlude into an otherwise ongoing dry pattern that is building. Warmth and dryness resume in Western Europe from May 26-June 2. Corn prices in Europe remain near $10.00/Bu as a market there digests the current week’s soil moisture conditions and difficulty facing Ukrainian corn exports. The EU is the world’s fourth-largest importer of corn in 22/23, even assuming normal weather.

Indonesia said it would allow palm oil exports to resume beginning May 23. The lifting of the ban is happening a bit later than expected, but Indonesia simply can’t sacrifice such a significant revenue source for any prolonged period. Profit-taking is occurring across global veg oil markets (canola/rapeseed/soybean oil), but the overall need for record large oilseed/veg oil production remains intact for the coming year.

Cattle futures remained under technical pressure yesterday with outside risk-off influence, likely prompting a steady lower start this morning. Cash cattle markets remain slow midweek and limited in the Northern Plains, where cattle and Nebraska sold $4-5 lower from last week at $140. Lower trends have been established now in all markets this week. June live cattle posted its lowest daily close since October, with support at 131.00 likely under attack today. Closing under this important value substantially clears the way for the technical target near 128.00 established on the charts. Boxed beef has lost upward momentum, with choice drifting a penny while select was down $2.17. The load count was light at 136 loads.

The USDA COF report will be out Friday afternoon, with analysts showing on feed at 101.5% of last year, placements anticipated at 96.5% of last year, while marketings are put at 97.9%.