Grains starting the last day of the week on the defensive.

Grain futures are mostly lowered to start the last day of the week, with China on Dragon Boat Holiday, this is creating no follow-through buying interest to Thursday’s strong soybean close. This past week’s sharp price decline in wheat and corn is tied to the continual headlines of Russia holding the narrative that they will allow grain exports to occur out of Ukraine. Still, to do this, it remains that economic sanctions placed upon Russia in March must be reduced or outright eliminated for this to take place. This puts the narrative that NATO is responsible for world hunger and high food costs, not Russia.

The wheat and corn trade are watching next week’s meeting between Russian/Turkish foreign ministers in Istanbul on June 8 to discuss potential grain export corridors out of Ukraine. After June 8, Russia’s ongoing appearance to wanting to feed the world will require a response from NATO; this response will likely not be price friendly.

Weakness in the morning hours to wheat after seeing strength the overnight came from tweets that Belarus may allow for grain from Ukraine to move through their country to Baltic ports with the UN working to enable Belarus to receive in exchange for the exports to have goods imported to their country previously banned. The problem is the Belarus rail system, and the Baltic ports are not large enough to handle goods both ways. The allowance for Belarus to export its goods to the Baltic ports would also require a NATO change in economic sanctions, which also is unlikely.

French wheat conditions continue to decline for the fifth week in a row, to 67% good/excellent, down from 92% five weeks ago. This is also compared to 80% from last year. Showers are anticipated this weekend, but drought-breaking rains are not in the forecast. Also, Monday afternoon’s first release of corn crop condition ratings are expected to be high.

The EPA is expected to announce the biofuel mandates for 2020-2022, which are required by law. The mandate announcements were delayed due to politics and Covid. It is rumored they will raise the US corn ethanol mandate for 2021 to align with production. In the years 2020 and 2022, the EPA is expected to confirm its December proposals which call for a hike in the 2022 Advanced Biofuel mandate. This shows that the White House is not slowing its green fuel initiative even amid the rise in food prices.

Forecasts for the Central US remain favorable next week with no extreme heat evident with enough rain for early crop growing conditions. Dryness prevails across the Central US for another 24 hours before a series of storm systems cross that produce near-normal rainfall. High temps will be in the 70s/80s with no extreme heat. Extended range models form a Ridge of high pressure over the western US and allow the Ridge to progress eastward. The pattern shows no stagnation due to a strong jet stream aloft. Summer weather patterns of concern with heat do not start until the last half of June.

Cattle marked the second day of strong gains in feeder cattle pricing explosive. Feeder cattle, in fact had a gain of $7.80. The cash cattle market remained quiet Thursday with weak demand in all significant feedlot areas, with early-week cash trade remaining down $2.00 for the week. Box beef had choice down $0.77 while select gained $0.72. Seasonally, the odds favor that a market top is in place on box beef, with the weaker trend to follow into late summer.