Soybean oil again leads overnight strength following palm oil.

After yesterday's selloff, this morning’s grain trade is moderately higher by a few pennies. Kansas City wheat reflects a near $0.10 recovery gain as importers use the recent break to finalize some old crop supply coverage. Palm oil gapped higher again last night, throwing support to soybean oil and canola. The absence of trends is creating a current range that has yet to find news to break out substantially from. Seasonal lows have been scored but managed funds still hold a rather sizable short position that should provide buying interest into weakness as they reduce their trading into the Northern Hemisphere growing season.

The spot Malaysian palm oil market rallied a sharp 112 ringgits overnight, gapping higher to close at a new 21-month high of $0.43/pound. The global vegetable oil market typically scores its lows in the winter and adds a premium for the remainder of the calendar year. Spot crude oil is also trading near 86.00, which keeps the soy oil bullish potential story in place.

Crop scout Cordonnier left his South American production estimates unchanged: Brazil soybeans 145 MMT, Brazil corn 112 MMT, Argentina soybeans 51 MMT, and Argentina corn 44 MMT.

European weather has the EU/Black Sea forecast hinting of an expansion of rainfall in E Europe and central Russia beyond April 17-18, with the confidence low and net moisture loss will be ongoing for key areas of Romania, Ukraine, and Russia in the near term. Temps across the European continent are pegged at 8-16° above normal next week, with highs reaching the upper 60s and 70s. Soil moisture remains adequate currently, but the Black Sea’s climate trend needs close watching. Cheap Russian wheat has become a world reliance, and Russia needs record production in 2024 to maintain its grip.

The US weather is mostly drier across the Plains into the middle of the month as the 10-day forecast has trimmed or eliminated needed rainfall from the Texas/Oklahoma panhandles. Meanwhile, too much rain impacts the Delta region. Net soil moisture boosts in IA, the Great Lakes, and E Midwest are viewed as favorable, assuming a warmer/drier trend unfolds in the last half of the month.

Live and feeder cattle futures recovered on Tuesday after Monday’s sharp break on the human infected with the H1N1 Virus, with pinkeye being treated for the individual. Market recovery was timid when measured against Monday's sharp losses, so we need to see further gains today. June live cattle did close back near 176.40 but needs to show more strength and hold that closing value. Meanwhile, cash markets across the Plains and Western Midwest were at a standstill, with active trade expected by Thursday. The outlook is that the cash could be $1-3 lower, with the northern premium to strengthen further over the South.

Box beef values slipped on Tuesday, with Choice down $158 and Select losing $2.80. The choice/select spread increased to $5.17 choice premium after falling $4 late last week. It’s been a counter seasonal decline in the spread, brought on by the recent bird flu events. 2013 was the last time the spread was this low in early April; both beef values are holding at record price levels for early April.