The grain trade is lower post-WASDE.

Grain futures moved lower in overnight trading, with improved wheat conditions, which rose 3 percent and pushed the wheat crop rating to 54 percent good to excellent. Crop progress reports show corn is now 62 percent planted, while soybeans are at 48 percent. A key takeaway from yesterday’s WASDE report, which has sparked debate, is the outlook for increasing exports. Until a trade deal is finalized, that is being questioned. Soybeans appear to be undergoing a mild rationing process for the old and new crops. It is important to remember that the full growing season still lies ahead.

Historically, we tend to see the highest carryout totals of the year reported in May, which adds further interest in the soybean complex. Soybeans also found support yesterday from reports suggesting that the current 45Z biofuel blending tax credit may be extended through 2031, although official confirmation is still pending. This morning, traders are watching closely for updates on US trade negotiations, especially with China and Japan. While Japan has expressed a desire to work with the US, it remains firm in its demands. Meanwhile, China is facing its third consecutive month of economic deflation, which is contributing additional pressure to the markets today.

Now that the May WASDE report has been released, market focus is shifting more toward the US weather outlook. Current forecasts are mostly favorable for planting, though some areas continue to face less than ideal conditions. The Eastern Corn Belt has experienced rainfall delays that are slowing fieldwork. Some reports from the region suggest this year’s pace is as sluggish as it was in 2019. In contrast, the Western Corn Belt has seen warmer and drier conditions, which has supported planting efforts. However, now that crops are in the ground, those areas are beginning to need rain. Weather attention will also increasingly turn to soybeans, as ending stocks remain historically tight and will require continued rationing.

Equity markets are lower this morning, and the US dollar is also in decline, driven by profit taking. Energy prices are mixed, while gold is recovering some of its losses from yesterday.

The Northern Plains endured another day of intense heat, with temperatures ranging from 90 to 100 degrees for a third consecutive day. A sharp cooldown is expected, with lows dropping into the 30s and 40s by Friday and into the weekend. These cooler readings will extend across the Midwest, bringing lows in the 40s and 50s, before a warming trend returns in the 8 to 14 day forecast window. Showers are expected across the Central Plains over the next eight days, with rain likely to begin in Northern Kansas around May 22.

Globally, weather concerns continue. Germany, France, and the Western Baltic states are experiencing persistent dryness. In contrast, Eastern Europe and the far western parts of Russia may once again see frost in low-lying areas. Chinese wheat-growing regions are also facing arid conditions, with no meaningful rainfall forecasted over the next 10 to 14 days. Rising temperatures are expected to return, potentially impacting China’s winter grain crop. At some point, domestic US markets will likely begin to factor in these international weather developments.

Yesterday was a strong day for cattle and feeder futures, which surged to new contract highs. The rally was fueled by news that the Secretary of Agriculture had closed the US-Mexico border over the weekend due to unresolved issues with the screwworm. As a result, active live cattle trading may be delayed until Thursday or Friday, as packers await updated weight data. Yesterday’s report showed gains of more than a dollar. The duration of the border closure is now a key point of interest, as Mexico works to resolve the issue quickly.

Last week’s report on negotiated sales showed a $4.00 increase in prices to a record high of $225. Dressed sales rose $7 to $356. Despite the record-high prices, negotiated volume for the week was lower. The Packers purchased a total of 83,514 head, with 53,519 scheduled for delivery within 1 to 14 days and 29,995 for delivery within 15 to 30 days.