The grain trade starts the week out with HRW wheat leading.

Grain futures are firmer this morning on low volume, with HRW wheat leading the advance. Dryness in the Plains, Canada, E Ukraine, and Russia prove supportive. Meanwhile, stagnant heavy rain continues in the Delta and E Midwest. Little to no rain is forecasted elsewhere in the US, with temps in the 70s and 80s across KS, NE, MO, IA, and IL beginning April 17. Corn planting is anticipated to get underway this week, with estimates that 35-40% of the work will be completed by May 1.

India’s wheat crop is being lowered. The Roller Flour Millers Association of India estimates it at 105 MMTs for 2024, down from the government’s official number of 112 MMTs. India will not likely be an exporter of wheat, and 24/25 is when stocks stay historically tight. A crop of 105 MMTs would raise the odds of modest imports amid expanding domestic consumption and low carryover supplies.

Russia is still holding up wheat export vessels due to phytosanitary certificate issues. China’s state media reported the country’s grain production will hit a bottleneck this year, claiming the government has undergone a new round of actions to increase production capacity.

The Commitment of Traders Report showed that managed money sold 7,826 contracts of corn (net -259,556), 3,476 contracts of soybeans (net -138,256), and 158 contracts of Chicago wheat (net -91,944). Price seasonals are bullish until June 1st as a risk premium is built into price.

This Thursday, at 11:00 a.m., is the April WASDE report. The USDA expects to trim old crop US corn stocks by 25-75 Mil Bu amid larger-than-expected feed/residual disappearance and strong ethanol grind. Soybean wheat ending stocks should be left unchanged. Also, CONAB will be out with their updated yield guesses and whether they raise their Brazilian corn planted area or keep it down 9% year-over-year.

The US forecast is consistent with prior runs, and there are hints of better shower chances emerging in parts of the Dakotas beyond April 16, but confidence in those details is low. Net drying continues across the Plains/W Midwest. Unwanted rainfall of 4-7” impacts the southeast. The duration of dryness across the W Plains becomes more important in May, but now a timely planting season is anticipated, especially west of the Mississippi River. There is still no indication of regular rain developing in E Europe, Ukraine, and key areas of southern Russia prior to April 22. The forecast there is warmer than previously. The burden on May rainfall in E Europe and the Black Sea is rising.

Live and feeder cattle prices tumbled lower last week, with a soft outlook anticipated this morning. For the week, June cattle gave up $8, and May feeders dropped $10.50. Both contracts are below their cash markets, with cash trends also expected to turn lower on building-fed cattle supplies and weights. Last week’s cash trade in the north was steady at $4, lower at $186-190 in a wide range. The dressed trade was $3-4 lower at $296-297. Sales in the South were off $2 at $24. This is now after record prices just two weeks ago. The cash market has been lower for two weeks, which hasn’t happened since December. Meanwhile, box beef values collapsed on the choice by $10/CWT for the week, and select was off $9. The choice/select spread fell to a $2.47 choice premium, which is the lowest for early April since 2012.

If June cattle fail to stabilize in the 171.40-172.00 range, the next key support value is a 78% retracement of the December low, which is at 167.80-168.00. May feeder cattle have Fibonacci support at 234.00-234.50 if they falter at present values.