Weather is the key feature this week.
The grain trade was mainly firmer overnight on the concerns for soil moisture throughout the Midwest, while Kansas City wheat continued to create the most weakness, along with July soybeans finding resistance in the 1390 range. Less rain than forecasted fell across the W and NC Midwest over the weekend, while the 10-day forecast offers moisture chances in Eastern Illinois East into Ohio, with southern Minnesota, Northern Iowa, and central Illinois having less than .50” rain forecasted through the next 10 days.
Soybean oil had found pronounced weakness overnight, as crude oil tumbled $2.00 a barrel and is now under 70.00 on talks at the Iranian/US nuclear deal could be ratified soon, bringing Iranian oil into the marketplace. In addition, the Malaysian Palm Oil Board data released today showed May production above expectations and May stockpiles above expectations. May exports were below estimates.
This afternoon's crop ratings are again anticipating a 2-4% decline in the good/excellent categories for corn and soybeans, while winter wheat ratings are anticipated to increase.
This week the FED meets and is expected to hold the lending rate through the Fed discount window stable when it releases its statement Wednesday at 1:00 p.m. Also, the NOPA will be out with their May crush report this Thursday, along with the Biden administration expected to announce the EPA’s biofuel production targets/mandates that need to be out by June 15. Some rumors are suggesting the Biden administration will raise advanced fuel mandates to appease producers.
This morning the GFS model is a bit wetter than the Euro and Canadian, but they have an alignment that would suggest below normal rainfall forecast for the Midwest out 10 days. Temperatures are cooler than normal with highs in the 70s/80s with temperatures next week climbing into the 80s and a few lower 90s. The best chance for rain is early this week across the Northern Lake states that slowly pushes eastward.
Live and feeder cattle futures put in technical key reversals last week from their Wednesday highs that abruptly gave way to profit-taking/selling that had both live and feeder cattle closing lower than the prior week. Went out at record levels in all regions. Texas traded at $182 with sales in Kansas at $186. Live trade in any was at $191 with dressed trade at $300. The outlook this week is anticipated possibly be steady/lower. Box beef values are at historic prices with choice at $3 33 and select at $3 06. The rally in beef prices outpaced cattle and estimated slaughter margins again $34/head for the week to $184. Is truly a supply/driven market where demand has been left with no choice but to pay up. The market is becoming concerned that consumers may start rejecting the higher values after their Father’s Day/July 4 needs are acquired, with brats, burgers, and chicken thighs looking like better grilling opportunities for the summer.