Grain futures tumbled further as technical support gives way.
Grain futures are sharply lower again this morning, led by none other than the KC and Minneapolis wheat markets with corn nearly $0.10 lower on the session as well. French milling wheat tumbled to new calendar year lows and is now at the lowest prices since July 2021. There is talk of more imports of EU wheat into the East Coast, bringing renewed pressure to the Kansas City and Minneapolis wheat markets. This is setting the stage for the seasonal weakness that wheat typically finds when it spikes into late April-mid May for the spring highs and then finds selling as buyers await new crop availability.
A negative that's not getting much press is how the US dollar has now climbed above 103.00. The public had become heavily negative against the dollar, yet it held long-standing support near 101.00 and is now shifting some perceptions with interest rates in the secondary market moving higher.
The Kansas City wheat tour now has a running average yield of 28.7 Bu/acre, which is very close yet to the NASS projected 29 BPA. The tour on Wednesday ran into many field estimates of 5-8 BPA, which will likely go unharvested. Argentine wheat fields are now getting rainfall forecast through Sunday, May 28, of 2-3 inches throughout the wheat region.
In the current price decline, the September and December corn values have fallen to the values of the September Brazilian corn contract. The Brazilian corn FOB premiums have jumped $0.50 from their lows which were scored at the opening of May. Still, corn and soybean demand stays focused on South America through the summer months, but Ukrainian corn is now quoted beyond July as the export corridor has now been extended another 60 days. In the interim, Chinese demand will stay focused on Ukrainian corn, especially with recent US cancellations.
The US weather forecast has a split jet stream flow with the southern branch displaced to the south, and the northern branch to the north, leaving the Central US in a below-normal precipitation flow for the time being. Temperatures will be variable with warming in the 9-15 day period across the Central US, and Canada as highs will be into the 80s and, in some places, lower 90s. Until then, high temperatures range in the 70s to lower 80s. The came prairies have a chance of rain starting late in the weekend and early next week, but totals are anticipated in the .25-1.00” range. So far, the outlook for the Midwest is favorable as spring seeding quickly progresses to completion, especially in North Dakota.
Live cattle futures were mixed on Wednesday, while feeder cattle were lower despite the weakness in the feed complex. Any trade on Wednesday was confined to small numbers at steady prices while asking prices were still quoted $2 higher in the S Plains at $172, and in the north, offers were at $282, which is $2 higher than last week. The box beef values yesterday were lower by more than $1.00.