Wheat prices lift overnight trade.
Grain futures had wheat firm overnight while corn and soybeans traded two-sided. Yesterday’s NASS crop progress data had 72% of the corn planted with 50% of the soybeans in the ground. Only 49% of the spring wheat crop was seated through Sunday. Spring wheat was the price leader overnight, as North Dakota still has 10.7 Mil acres to plant. 2 Mil acres of corn, 8 Mil acres of soybeans and 2.7 Mil acres of spring wheat still need to go in the ground. The option to accept preventive plant in revenue insurance policy starts tomorrow. Record-high prices will have some farmers pushing to June 5 if they can see the potential of getting it done.
Along with the delayed spring wheat planting, Paris milling wheat futures were also firmer overnight as the European drought persists. Limited rainfall is forecasted for France/Germany and most of Europe in the next 10 days. Also, Malaysian July palm oil rallied 263 ringgits/MT as Indonesia has slowed exports through a licensing program tied to domestic sales.
The more important focus right now is the reality that the US final seeded crop acres will be some 3-5 Mil acres below the March intentions, placing the need for exceptional weather this summer in the US, which is not likely to occur. Carryouts, especially once the mix on the June 30 acreage data is ascertained, are all threatened to be on further decline. Price breaks that would typically be seasonal from May into June will be buying opportunities for end-users. Elevated risk the upside continues well into summer.
The Central US weather forecast shows a potent trough will pull slowly eastward across the Central US in a southerly displaced jet stream over the next three days. A trough will produce.5-2.00’ of rain across the Midwest/Delta with clouds preventing high temps from reaching much above the 60’s and lower the 70s. Lows will range in the upper 30s to mid-50s. Seated spring crops will not make much progress on growth, with emergence holding well below normal. The rains shift back north to the N Plains and S Canadian Prairies on the weekend with totals of .5-1.50”. The extended range has a Ridge of a high-pressure building across the South-Central US during early June.
Cattle futures closed on the highs of their session yesterday but could have a mixed start with the lower stock market. It seems deferred live cattle have been following strength or weakness in the stock market as of late. Yesterday’s positive response to the neutral/negative Cattle on Feed report was encouraging, but the market was already well oversold in anticipation of the data. The May cattle on feed report continue to show overall heavy supplies of available cattle along with the larger than expected placement total.
Yesterday the USDA announced the Cold Storage report after the market closed, and total pounds of beef and freezers were down 1% from the previous month but up 18% from last year. The tighter month-over-month stockpiles likely reflect good overall demand, and carcass weights appear to be trending later. The May feeder cattle contract expires Thursday, with August feeders trading at a $13 premium to the index.