Grain prices trade higher in the early morning hours.
Grain prices firmed overnight on the lack of outside risk-off liquidation. Overnight outside markets reflect a calm, as money has been found to be thrown wherever there was trouble, with the US dollar heading lower ahead of the onset of the Fed meeting today and Wednesday when they are anticipated to release a .25% rate increase on the Fed funds rate. Overnight trading had regional bank values surging as Treasury Secretary Ellen implied the government is committed to backstopping deposits on any kind of bank if necessary. As far as money tools go, this does not help the inflationary concern that the Fed had been saying was job one.
Crop progress reports out yesterday showed that half of the Kansas crop is rated poor/very poor, with only Colorado showing a good/excellent rating of 30% or better. There are light chances of moisture this week via snow, but the HRW wheat area needs well beyond normal seasonal precipitation here forward to catch up with its deficits. The cold and snow for the Northern Plains and Midwest will be monitored for concern that melting from warmer temperatures will soon occur on the longer-term weather models.
South American forecast has rains beginning Wednesday in central Argentina with the 72-hour accumulation pegged in the 1-3” range. Heavier localized amounts are possible where rain is needed. Yield benefits are limited due to crop maturity. Meaningful rainfall in Brazil will be confined to Matto Grosso and fringe producing areas in the north. That is favorable after the safrinha corn seeding has been completed.
Live and feeder cattle values were lower on Monday but are called steady better with the liquidation factor being limited with a positive outside market tone. The USDA reported that last week’s five-Area average negotiated live steer price was at $164.17 which was down $1.23 for the week and $1.84 under the CME’s weekly nearby close. Basis flipped two weeks ago, which was a couple of weeks later than normal. Last week’s average basis was fractionally above last year but still nearly $1 less than the average. During the month of May, the cash trade can typically trade $8-10 over June futures during the early portion of May before of seasonal high in basis hits.