Grains starting off lower after the 3-day weekend.
The futures market is having a tough time getting out of this bearish tone its been putting off. Technical selling and Russian based news seem to keep prices in check after a small rally. The market is telling us that as we seed into this dry May weather, we are getting acres in the ground fast in the U.S. and the dryness in the grain belt is okay for now with no yield loss potential. However, if this dry pattern continues into June, the yield loss will start to be considered as we see crop ratings fall if we stay dry. This afternoon’s crop ratings are expected to come in at 69-72% GD/EX.
The central US weather pattern forecast looks unchanged. Limited rains in the Midwest into June adding to the dryness. Temperatures will be rising into the high 80s low 90s this week and areas where a good may rain was missed will be of concern and drought conditions worsen. Soil moisture levels are declining at a quick rate in the I states.
The Russian/Ukraine war had some action overnight with both countries sending drone strikes to each other’s capitals. Ukraine has indicated that their farmers would be seeding about 500,000 hectares less than expected due to the war with Soybeans and Sunflowers being the most effected.
Cattle market closed higher last week with feeders mixed. Today is looking for a positive opening. The Cash feeder index gain $7.50 to end the week near $210. Fed cattle were trading higher last week in all regions with southern plains seeing $171, up $1 for the week. Nebraska, IA and MN areas saw $2-4 higher at $180-182.
Similarly to last year, it the northern region leading the cash trade with a $10 spread between the regions. Seasonally we tend to see cattle prices to slide in June, but with supplies tight, we will likely see this demand continue for a bit yet until we see a demand change.