Grains lower across the board this morning.
The wheat market led the overnight grain trade weakness as headlines hit that Russia has allowed inspections of Ukraine grain cargoes to resume which provided the pressure. Russia is blaming Ukraine for the difficulties as Ukraine officials seek bribes from shipowners to register new vessels and carry out inspections of the present UN deal. (This is not surprising, as one of our employees, Ivan, who was born in Ukraine and immigrated at a young age, has been to the country numerous times in the past decade and has said you cannot even build a chicken coop without bribing a local official. That is life in Ukraine)
Strong cash bids and a bottoming of Brazil’s premiums are providing support for corn and soybeans. The changing geopolitical aspects of the black sea Grain Corridor initiative is causing back-and-forth swings in the trade. Still, there is concern that the EU/US sanctions on Russia will not see improvement and the corridor will better risk of closure on May 18.
Yesterday Poland worked out a deal with Ukraine that grain would be sealed at the border for transit through Bulgaria, and overnight Bulgaria banned Ukrainian grain so that the sealed grain does not end up being dumped in their cash grain market. The difficulty in all of this, is the EU will need to import corn from Ukrainian in late 2023, and it is a matter of correctly getting the flow of grain, especially if the corridor in the Black Sea is closed. The EU plans to support farmers along their border with a €100 million aid package.
The overnight forecasts went colder in both the EU/GFS models, with rain on the Plains April 26-28 being moved farther east. This leaves the drought deepening in Western Kansas in early May. The heaviest rains be focused in the Southern-Central US. Temperatures in the Central US will average below normal over the next two weeks, with the frost/freeze to push into southern Kansas and southern Missouri this weekend.
Live and feeder cattle close higher again yesterday, with April/May feeder cattle making new contract high. Outside markets are softer the day universally and could promote a risk-off session in cattle. Negotiated Fed cattle markets are untraded, but boxed beef values extended their gains, with choice picking up a $1.08 while select jumped $2.29 higher. Both are record prices for late April. US supplies are forecasted at a record low with prices at record highs, slight adjustments in demand can create significant swings in the marketplace.