It's May Day, with European countries closed.
It’s May Day, and grains are starting out lower for wheat, softer corn with beans near steady. Heavy losses were seen last week, with Friday experiencing short covering with end-of-the-week/end-of-the-month profit-taking. Follow-through buying did not materialize Sunday night, implying any strength is potentially still short covering and not initiated buying from a targeted low.
Russia appears to be showing no willingness to extend the Ukraine Grain Export corridor, with Black Sea vessels in a rush to exit the area prior to the May 18 cut-off and minimal traffic heading in. In April, Ukraine exported 3.62 MMTs of grain versus 923K in the same month last year when the ports were locked down. This will start to become a headline story in the next two and a half weeks.
Brazilian soybean basis levels are starting to firm as their harvest ends and logistical snarls are being curtailed. The Brazilian export lineup with ships reflects record world demand for their soybeans that will be exasperated by the Argentine shortfall.
This afternoon’s progress report has estimates of 20-24% of the corn seeded with soybeans at 16-19% as of Sunday. The corn seeding pace is below the five-year average, while soybeans are just ahead. Spring wheat seedings are anticipated to be at 12-15%.
Of note is that the corn crop in central Brazil is now experiencing some dryness that started around 10 days ago and looks to persist into mid-May. This is important to notice as 75% of their corn crop has yet to pollinate. Brazilian winter corn crop needs several more good rains until maturity to make trendline. Over the last two weeks, the Brazilian corn basis for July delivery collapsed on the anticipation of large available supplies.
The Central forecast for the US has warm, dry weather this week, followed by widely scattered showers, including the central and southern plains coming next week. Spring plantings will now surge ahead with the crop emergence to quicken. Rainfall is anticipated to return after this weekend in a zonal upper airflow was several short waves producing showers. Showers are forecasted in the northern and central plains, but it’s not anticipated to impede the ability for seeding progress into mid-May.
Live and feeder cattle ended last week slightly higher than the prior week, overcoming the bearish COF report. Cash trade, though, was lower for a second consecutive week, with sales in the southern plains and KS down $2 at $173. Live sales in and E were $4 lower at $178. Live sales in IA/MN were $1 lower at $180. The early week outlook is anticipated to be steady with again why differences between last week’s cash market and now the heavily discounted June contract, which offers room for basis plays. Box beef did advance last week, with Choice gaining $0.84 and Select up $0.54. A cash top is anticipated soon, but June cattle futures already have a large break for the seasonal decline built in.