Grains leaning firmer on the morning of the crop report.
The May crop production and WASDE report will be out at 11 AM CDT time today which will show this years first balance sheets for 2023/2024. Expectations have been bearish according to the trade. End users looking to buy at lower prices and warming temperatures and more dryness could be what it takes to get a jump start in these grain markets. Soil moisture is reported to be quickly disappearing across Canada and Russia’s spring wheat land.
The Black Sea Corridor grain deal continues to be debated with no definitive answer. Russia has set its demands and will not renew unless those demands are met. Turkey has made some progress in some sort of extension as they are headed into a presidential election this weekend. Keep in mind that Ukraine can export 3MMTs of grain per month though eastern Europe which is a fast enough pace to clear their crop.
The US and China met in Vienna for 2 days trying to mend a relationship and get back on track. They discussed Taiwan differences and the spy balloons and supposedly there was enough progress made that Xi and Biden will be meeting in person later this year.
After today’s crop report, all eyes will switch to weather forecasts to determine the next direction. Our world stocks are still considerably low and with any bit of a US, Russia, Brazil crop loss, we can see a rally occur.
Weather across the US is still keeping Kansas and Nebraska dry with a few isolated showers reaching desperate areas. 1-2” for the northern plains expected in the coming days. Above normal temp patterns are being seen in Canada and look to continue.
Cattle yesterday were weaker, but feeder market was steady due to the falling corn prices. Steady pricing is expected today. Cash sales were lower than last week at $175-176, dressed at $280 down $1. Average carcass weights are at 890 lbs, last year they were 11 lbs lighter. On average, weights decline 44 lbs from the early year high which implies a seasonal low in carcass weights near 875 lbs or another 15lbs lower in the coming weeks. Support sin June cattle is $161 but a deeper correction to $157 is possible on a breakdown. That would provide a buying opportunity in the deferred months and feeder supplies are at multi-year lows.