Russia and NATO are at impasse on the food corridor.
Grain futures put in a mixed performance overnight as the Ukrainian food export corridor continues to be the topic. Still, Putin said any Ukraine food exports are tied to NATO dropping their economic sanctions against Russia. This has been their stance for the past two days and is unchanged. The Biden administration and Europe continue to reject Putin's offer leaving Ukrainian grain landlocked. All grain is also blocked to the north through Belarus, as the flow of grain is also being blocked into the Baltic ports. This means grain only moves by rail or truck out the western border, where roughly 800,000-1.4 MMTs of grain can move on average each month.
If no grain moves from Ukraine by late summer via ports, the US and South America will have to bridge the gap, as August forward is when grain flows heavily out of Ukraine. This means old-crop grain pricing will abnormally remain high through summer, stifling the seasonal trend for old crop prices to tumble from mid-July into September. Grain pricing can technically act negatively from week to week. Still, cash basis strength will continually subvert any potential for down trending in price unless a record crop is assured in the Northern Hemisphere or an impasse is overcome for Ukrainian grain exports.
French wheat conditions have declined for the third week in a row as the hot and dry weather continues to impact the crop. 69% of the French wheat crop is now rated good/excellent versus 73% last week and 80% last year. French corn ratings are now on the decline as well. The weather forecast for the next 8-10 days offers a warm/dry forecast with some rain hinted in the 10-14 day.
The US forecast brings unwanted rains back to the N Plains and Canadian prairies this weekend, further slowing seeding progress. Farmers planting crops after the May 25 date get a reduction created to their assured revenue payment, but high profitability will lead many to push for June 5 for corn and June 15 on beans.
A ridge of high pressure builds across the eastern US, with the Jetstream pushing northward over the next two days. This produces frequent and regular rainfall across the N Plains and Central Canadian prairies. Both areas are saturated and need dry weather to finish spring seeding. Rain starts this weekend and lasts into the middle of next week. Five-day rainfall accumulations are estimated in a range of .75-2.50″ with locally heavier amounts. The remainder of the Midwest and Central planes hold to a dryer pattern with 80s and 90s forecast for the Eastern Midwest. The extended range has a ridge of high-pressure building across the South-Central US during early June, offering more summer like temps with a reduction in rainfall.
Cattle futures look mixed for the start ahead of the three-day holiday weekend. Cash trade was lite on Thursday, with the bulk of the action already wrapped up for the week at $137, which is off $one from last week in northern trade hit $140. Beef carcass weights are softening, with weights for the week ending May 14 at 891 pounds, down 7 pounds and 3 pounds below last year. Light scratch that lighter weight cattle will help tighten up the production totals. August feeder cattle take the lead with the cash feeder index at a $13 discount.