Soybeans price recovery highs overnight.
Grain futures are mostly higher this morning, with soybeans the strongest in the spot May contract. China continues seeking US soybeans, with average daily announcements of over 120,000 MTs. Tightening exporter supplies have corn and beans stalling and what are still decade highs. An improving two-week Central US weather forecast to warmer will help to lead to accelerated spring seeding efforts into the opening of May.
Russian fighting in Ukraine in the Donbass region is escalating, with the Ukrainian commander in Mariupol claiming his forces are facing the last days. Thoughts are that if Putin can capture this area, it may create the land buffer he is looking for to negotiate a potential cease-fire. Western Ukraine may see spring planting achieve two-thirds of its acreage in the ground.
China’s ag minister estimated that China’s soybean output could jump 26% to 21 he .6 MMTs versus last year’s 16.4 MMTs. The gains help China’s essential needs for this protein, but the amount of crop seeded to soybeans takes from available acres to corn. The ability of China to find additional row crop acres is limited.
Grain futures are consolidating under Monday night’s price highs from the price push from the pause of buying pressure during a three-day weekend. Only soybeans have pressed their highs daily with the ongoing Chinese purchases. Typically, grains would stall and congest until Thursday, when trend buying returns on Friday.
A fast-moving and strong jet stream will produce another two storm systems before the upper flow pattern changes into a broad Ridge/trough pattern across the US around May 1. This pattern shift will lift the jet stream northward, allowing for much warmer temperatures. As a result, this morning forecast is warmer than previous days and calls for above-normal temperatures across the Midwest for the next two weeks. This warmth helps accelerate evaporation and leads to the firming of soils and more active spring seeding.
Cattle futures look mixed to start the day, as yesterday the most actively traded June contract worked higher but still consolidated within Monday’s large trading range. The technical picture is still concerning, given the reverse is established on Monday, especially now with the Cattle on Feed Report be released at the end of the week. The upcoming report has estimates of On Feed at 100.4%, Placements at 92.2%, and Marketing at 98.2%.
Cash trade in the South had deals at $140, up $1 over last week. Asking prices are still targeting $142. Cash trade is still likely to be developing with a firmer tone showing up today. Beef cutouts were softer yesterday with choice at 269.93, lower by 1.15, with select 259.21, down $0.25. It’s anticipated that cattle weights will start working seasonally lower, and packers will be searching for Choice beef to fill orders.