The grain trade is mostly weaker this morning.
This morning’s grain trade is weaker, with wheat leading the decline as the US dollar pushes above 104.00. Speak McCarthy has indicated talks with the Biden administration regarding the debt ceiling are progressing, and he’s confident they will find an agreement. This means some form of fiscal spending restraint and the debt ceiling increase will come in place.
The Malaysian Palm Oil Board warned that 2024 palm oil production could drop 1-3 MMTs due to El Niño, with the drought that is expected to start later this year. A loss will come in a time of already low stocks and falling yield due to aging trees. Currently, El Niño is looking to weaken their Indian monsoon, which could boost Indian veg oil imports at a time of world veg oil reduced supplies.
Egypt’s supply minister says the country has 5.9 months of strategic wheat reserves and 5 months of veg oil reserves. Meanwhile, Russian wheat supplies continue to pressure world wheat values lower, and Europe looks to clear out old crop supplies ahead of this year’s harvest.
Forecast models continue to project limited rainfall for the Midwest/Delta for the next two weeks, while the Canadian Prairies continue to receive several chances of rain with accumulations around 1 inch. Otherwise, heat continues across the Canadian Prairies amid a high-pressure Ridge aloft, which builds into the Central US this weekend and next week. Rainfall does occur in Texas, North through Kansas, Nebraska, and South Dakota, with moisture also into Western Iowa through the weekend. Russian spring wheat areas are dry, looking for moisture that is not yet on any weather forecasts.
After an exceptionally weak start yesterday, cattle futures bolted higher, with June cattle posting a new contract high. Negotiated fed cattle markets got underway, with Kansas and southern plains selling $1 higher on the week at $171. Live sales in NE and IA/MN sold $2-4 higher at $180-182. Dressed trade was also quoted $4-5 higher at $285-286.
Yesterday afternoon’s Cold Storage report showed another month of contracting US beef stocks. At the end of April, beef stocks were 448 Mil pounds, down 6% from March, 16% less than a year ago, and the tightest monthly stock figure in 19 months. This was the smallest April stocks figure in four years and was the largest year-over-year decline since August 2014. Live cattle have bullish undertones, but upside momentum has waned since the early April highs. Friday’s close on the board for the futures in the current price environment will certainly signal future prospects of price strength availability for the summer futures contracts