Wheat is softer this morning, while row crops are near steady
Corn and soybean futures are mixed this morning after a weak overnight run, while wheat prices retreated from their two-day bounce, following French milling wheat back lower today as it gave up well over half of the gains experienced on Tuesday. Goldman Sachs has stated that their bullish 2023 commodity stance has been wrong so far, with inventory de-stocking amid the fear of recession. Chinese demand post-COVID lockdowns has been disappointing. Goldman stated that improving demand later this year will help commodity values rise again once the de-stocking ends.
China will go down as the world’s largest importer of wheat for the 2022/23 crop year, with Australian wheat shipments to exceed six MMTs. Cheap wheat is displacing corn in China’s feed rations. Domestic wheat values in China are below corn, circumventing the corn imports, which included a cancellation of 1 MMTs of US corn purchased in March during May.
US weather forecast models have limited rainfall for the Midwest/Delta for the next two weeks. The Canadian Prairies will have several chances of rain with accumulations of .25-1.50”. Heat continues across the Canadian Prairies amid a high-pressure Ridge aloft. The Midwest will be the driest region, with limited rain until June 6. Heavy rains will fall across the Southern Plains with 1-3.50” accumulations. The 16-20 forecast still shows dry weather for the Central US, which needs to see a shift, or recent dryness will become a concern when we get into June.
Cattle futures faded into the close yesterday, pulling feeder cattle with them. The cash feeder Index jumped $4.40 to $206.76 on Tuesday, which held the May contract up ahead of Thursday’s expiration. Cash markets were quiet, with a steady outlook still anticipated this week, even though box beef prices are slipping with holiday demand already filled. Cattle futures are dealing with a double top on the June contract with last Friday’s trade, with August cattle also slipping after also failing near recent highs. Up trends are being challenged with key support for August near 160.00-160.50.