Soybeans moved sharply higher to start the week.
The grain trade finds soybeans sharply higher this morning, supporting the other grains, as world markets react to the USDA’s shocking drop of 4 million soybean acres from the March 31 data. The total US cropped area of 314.5 Mil acres would be the largest in eight years and suggests that even though the USDA said they will resurvey acreage for beans, they may not increase much in the final count. North Dakota was down 900,000 acres, and Illinois, off 800,000 acres will find themselves in the resurvey.
The corn acreage being up 2.1 Mil acres was also a surprise, with many arguing that the increased acres are in the outlier lower production areas. It is also being floated that harvestable acres this year may be closer to 90% the 91%. With the corn stocks number coming in down nearly 150 Mil Bu, that also absorbs some of the increased acreages for the carryout.
July soybeans in delivery overnight reached $16.00 for the first time in 11 months. November soybeans are targeted to make it into the $14.25-14.50 range. Soybean oil has closed above its downtrend lines and is now targeting the $0.74-77/pound area, with the spot soybean/corn ratio already trading at 2.9:1, a record high. This could rise to well over 3.1:1.
The Central US weather pattern maintains rains over the next 10 days, with the high-pressure Ridge not showing any immediate signs of amplification, which would allow storm systems to pass through the Midwest every 2-3 days. Temperatures are extremely variable, with highs ranging in the mid-80s to mid-90s for another few days before a cooling period arrives on the weekend and another warm spell arrives in the 9-14 day window.
Live and feeder cattle futures enjoyed a strong week, and a firm outlook is offered for early trade today. June cattle rallied into expiration when off at $181.50 versus $131 last year. Last week’s negotiated fed cattle trade was lower in all regions, with early week sales in KS in the S Plains being quoted at $170-179, while other feed yards passed on those bids late week. Sales in the north were mixed for the week at $182-184 and dressed at $285-290 on a hot basis.
Cattle slaughter was 644,000 head last week, down 5000 from the prior week but up 4000 more than a year ago. Year-to-date slaughter is down 3.4% from a year ago, and production is all 4.6% due to later carcass weights. The average carcass weight in 2023 has been 10 pounds lighter than a year ago at 818 pounds. The cash cattle market is into a three-week correction and last year’s correction only lasted four weeks. Cash trade for this week is called steady/lower.