Grain prices mixed/lower despite the weekend freeze and Black Sea concerns.

Grain prices are mixed to lower to start the week, despite what was likely some winterkill in HRW/SRW wheat country and concern that Russia will halt the Black Sea Grain Corridor by mid-May. It’s the sharp decline in Brazilian beans still remained weak, with over 50% of the harvest completed and the threat of Brazilian corn price weakness as they prepare for a competitive and active export program in July. Corn and soybean exports have fallen off with China’s recent exit of buying interest, and it appears our export program will remain thin now through the end of the crop season.

Domestic tightness is being played out on basis premiums rather than contract flat price, as central Illinois had corn being bid $0.65 over the July contract while soybeans were $0.70 over as end users hunt for supply with the onset of planting. The extreme premium May is seeing over July corn of $0.50 reflects a minimal or nonexistent export program where domestic end users have complete control of the market with only regional basis premiums needed to finish the crop year.

Russia is pessimistic about extending the Black Sea Corridor as ahead of its grain union states that it has done nothing to bolster world end users or Russia. Farmer Russian Pres. Medvedev said Sunday that the G-7 nations moved to ban their exports to Russia, that Russia will quickly end the flow of Ukraine’s grain. Russian PM Lavrov and the UN will hold the last-ditch meeting this week to see if the corridor can be salvaged.

Weekend weather had frost/freeze producing isolated damage to the heading HRW/SRW wheat on the weekend. It will take a week to fully no what the damage has been. Lows reached the upper 20s as far south as N Oklahoma, S Illinois, and S Indiana, where the wheat was entering the reproductive stage. Cold temperatures will limit spring seeding across the Northern Plains, with light snowfall having been recorded last Friday/Saturday. The cold persists for another 10-12 days before moderating. North Dakota farmers will have a difficult decision as they continue to plan for intended corn acres or enroll in Preventive Plant. Most farmers will likely try to push the dates and accept the discounts with still profitable margins.

Live and feeder cattle are called lower this morning after the April Cattle on Feed report was slightly negative to expectations with placements at 99% versus 95% expected and inventory at 96% versus 95% expected. The placement date is bearish, but the feedlot inventory will ultimately be the most important. The 1% difference between expectations and actual inventory is 75,000 head or about one-half of one day’s fed cattle slaughter. Despite the report, cattle supplies will continue to tighten as this inventory data does not alter the tight outlook. Historical prices and volatility will become the problem if demand is felt to be softening in the summer, which is a bigger concern.