The current planted corn crop rated the best in years.
Overnight grain futures were mostly softer on corn crop ratings or better-than-expected and the upcoming Russian/Turkey meeting in Istanbul on the proposed Ukraine export corridor clearing. Ukraine confirmed Monday that it has not yet been included in any pending Istanbul talks, which start on Wednesday. Apparently, Russia, along with Turkey, is willing to lay down its own set of rules for an export corridor which in the end will not be acceptable to Ukraine.
New crop corn and soybean futures led the early morning recovery as the EU weather model agrees with the GFS this morning with potential heat and dryness in week two for the Central US. This model offers a high-pressure Ridge in the extended range, which many will be monitoring to gauge summer weather patterns that are now starting to be established. This threatening Ridge will produce a bid for any breaks in CBOT trading today.
Yesterday’s first crop ratings for corn revealed that 73% of the US crop is rated GD/EX, one of the best initially rated crops in years. There is no correlation in history between initial corn ratings and final yields. Summer weather will determine the crop sizes, and with balance sheets so tight, any threatening weather will create a substantial price rally. US corn and spring wheat seeding estimates will likely be trimmed by more than 1 Mil acres each for upcoming NASS data due to the extremely delayed planting that has occurred and will be ending this week for North Dakota and Minnesota due to frost dates. NASS starts its June Final Seeding Survey now in May, and May call for a resurvey in the Dakotas/Minnesota in July.
The US weather forecast is favorable for this week with cool temps and additional rainfall. The GFS, Euro, and Canadian forecast models trend progressively drier with heat building across the S Plains and into the W Midwest in the week two time frame. The extended range models for week three, which are less reliable, maintain the warm/dry Central US weather trend.
Cattle futures closed lower yesterday, with feeder cattle sharply lower on renewed feed grain pricing as overhead resistance forced continued profit-taking and consolidation of last week’s sharp recovery. The cash trade was at a standstill start of the week, with trade expectations from mostly steady trade with last week. Beef production was down 6.8% from last week but up 10.6% from last year at slaughter numbers continue to run higher than last year. Carcass weights are sliding, losing another 4 pounds from last week, and select was higher by $1.07 on a moderate demand of 70 loads. It will take cash market demand with a firm tone to help lift cattle futures for the summer contracts to 135-136.