Grain trade struggles to hold Tuesday's gains.

After a firmer night session, prices eventually gave way, with only soybeans managing to hold near mixed trade. Fresh news remains limited, placing greater emphasis on weather conditions and outlooks. The weather continues to be mixed, with current conditions favorable for planting in the Western United States, while wetter conditions persist in the East. Planting is still progressing across the country, but the pace is beginning to slow. Some areas in the Eastern Corn Belt report progress as slow as in 2019, which is drawing increased attention. Forecasts suggest warmer and drier conditions for the West. For now, neither scenario is detrimental to crop production, and risk buying is being kept in check.

There are few tariff updates this morning. The White House claims progress is being made in negotiations, but the market remains focused on the fact that tariffs are still in place. Analysts suggest that if trade between the United States and China does not improve by late summer, soybean demand could drop by as much as 20 percent. However, that seems unlikely at this stage, as a decline of that magnitude would likely cause futures to fall enough to attract other international buyers.

Weekly ethanol data will be released this morning, with traders anticipating a possible increase in production and steady demand compared to the prior week. Ethanol plants are coming back online following maintenance, and the key figure to watch will be whether ethanol stocks have grown or been drawn down. Tomorrow will bring updated CONAB production data from Brazil. While we lack a bullish story to attract buyers, futures appear to be leaning toward oversold territory, which keeps trade choppy.

Rainfall is expected to become more plentiful across the northern Plains, Minnesota, and the Eastern Canadian Prairies. This is welcome relief after the recent heat, although the major forecasting models remain uncertain about whether precipitation will extend into the Great Lakes and Eastern Midwest. For now, dry conditions continue to support planting progress, so it is not yet a market concern. However, a sudden shift to drier conditions east of the Mississippi River and the return of dryness to the Central Plains after May 29 could become a growing issue.

The Wheat Quality Council tour is underway in Kansas. On their first day, the average yield was reported at 50.5 bushels per acre, compared to last year’s 49.9 and a five-year average of 45.1. As previously discussed, disease pressure and variability remain prominent themes. The final yield report is expected midday Thursday, with projections aligning closely with the NASS forecast.

The live and feeder cattle markets paused on Tuesday, consolidating recent gains. Market participants are now watching to see whether the gap higher trade from Monday remains open, which would signal a measuring gap, or if it closes, which would be seen as an exhaustion gap, suggesting that Monday's highs could represent a short-term top and a larger correction may follow. Initial asking prices for this week’s trade in the South are 224 to 225 dollars, with expectations for higher midweek pricing. Boxed beef values were mixed on Tuesday, with choice cuts gaining $1.96 to reach $350.10, and select cuts rising $0.76 to $334.47.

Box beef prices are now approaching the highs seen during the 2020 pandemic. However, slaughter margins have turned negative, with one to two dollars per head losses. The Packers are likely to resist paying more this week. The loss of feeder cattle imports from Mexico has added to the uncertainty, and it remains unclear when those supplies will return. Mexico must implement new protocols to satisfy USDA concerns about the possible reintroduction of the New World screwworm, which has not been detected in the United States since it was eradicated in 1966.