A mixed start greets the last trading day of the week
Grain prices this morning are mixed as a choppy week comes to an end. Tight old crop stocks are fighting with summer like warmth and timely planting progress for corn, sorghum, and soybeans except in the far north Midwest and Plains. Since the start of the month, the choppy trade has reduced the volume of activity, keeping trends aloof.
The ag ministry in China has issued a 3-year action plan to drop the feed inclusion rate of soymeal from 14.5% currently to 13% in 2025. The cut in soymeal inclusion would lower China’s soymeal imports if the policy could be enforced and carried out. China has been on an extensive buying spree since February as the government has decided to refill its depleted soybean reserve. This could have China taking well more than what the USDA has planned for the crop year of 96 MMTs and could exceed 100 MMTs.
Russia has stated that the West has time to remove obstacles to Russian ag exports before the expiration of the Black Sea Corridor Pact that they have imposed on the area by May 18. However, the West is currently not showing signs of removing any economic sanctions against Russia, which will close ocean vessel shipping as insurance will not be offered. As a result, traders anticipate that Ukraine will have to increase exports through Europe by rail and on the Danube River. However, quantities will still be reduced overall with the loss of the grain corridor.
A cooler forecast will be in store this weekend after summer like warmth is replaced with a frost/freeze into NE/IA and N IL on April 23-24th. The cold will slow the ongoing snowmelt in the N Plains and the emergence of corn/soybean seedings. Showers will develop on the weekend, and the best rain will fall across MN/WI/IA states. Unfortunately, the rain is too far east to benefit any of the deepening plains’ drought. A second storm develops in the middle of next week and will be focused on the NC Midwest.
After gapping sharply higher and setting new all-time highs again yesterday, cattle futures reversed and closed lower, except the April contract settling higher but near-session lows. Live cattle yesterday traded $5 higher in the South at $175, while live sales in the North were from $180-186, which was $5-11 higher. Dressed sales were $11 higher than the prior week at $290. Box beef had choice cutout gaining $1.94 to $300.42, the highest price since October 2021. Select also gained to $1.57, trading at $283.38.
Technical reversals occurred yesterday in the cattle market, with the market gapping higher on the opening and closing lower on what was considered massive volume. This could bring about some technical liquidation while fed cattle supplies are not expected to improve significantly. The concern will be any potential for a decline in demand similar to what the pork market has been experiencing since the first of the year.