Mixed grain trade for Thursday morning.

This morning’s grain trade is mixed with soybeans losing ground, giving of yesterday’s gains and then some, while wheat futures stabilize and firm as RIF/Grain Flour has ceased grain export operations in Russia. It appears Russia is nationalizing its grain export industry, raising price control issues. Currently Russian 12.5% wheat is trading at $209/MT as of this morning.

Argentina’s Rosario Grain Exchange warned that the Argy corn crop could face further downgrades due to the disease spread by leaf hopping insects. The northern growing areas could lose 40-50% of the crop. Estimates are currently down to 50.5 MMT from around 57 MMT. The USDA attaché to Argentina lowered their 23/24 corn estimate to 51 MMT from 57 MMT back in January due to the stunt disease. Corn stunt disease has pushed unusually farther south into Central Santa Fe and Córdoba. Be Ag E may further lower their 24 Argentine corn production estimate later today, but additional harvest data is required to define the full disease impact.

There is currently a large spread between CONAB and WASDE over the size of their soybean and corn crop. In the last 20 years (during the large growth of soybean production in Brazil) there have been 10 years of discrepancies between CONAB and WASDE. In 10 of those years, WASDE has come down seven of those years. The math is WASDE dropped six years, on one year WASDE came down and CONAB came up to meet in the middle, and on three years CONAB came up. So there’s a 70% chance WASDE will be coming down, the question is to what extent by September. This potential scenario should make you cautious and alert in your trading decisions microphone off is low this thing up. What’s frustrating is that if they end up heading toward something under 148 MMTs by fall, farmers will have been punished for the WASDE slow action if US bean crops produce a trendline or higher. Obviously, this is the USDA's plan to keep prices calm and inflation down.

Phillips 66 Rodeo California refinery has announced that it is operating and producing 27,000 barrels of renewable diesel daily as of April 15. Rodeo Renewable plans to reach as planned production capacity of 50,000 barrels/day later this quarter. Currently they are consuming 8.6 Mil pounds of feedstocks daily with a push to reach 16 Mil pounds a feedstock by late June. There capacity will add 15% the US biofuel production. Rodeo is the largest US biofuel producer and will significantly boost the US renewable diesel production. Phillips 66 has not announced what feedstock supply will be utilized, but soy oil should hold a sizable percentage of the feedstocks based on current price relationships.

Below-normal rain continues to be anticipated for the Central and Southern Plains from both the GFS and EU models, with near to below-normal rainfall for the Midwest. Better rains are forecasted in the 11-15 day window as a Ridge/trough pattern forms across the Central US. Whether this pattern will be able to produce any rain across arid Western Plains will be monitored. Central US temps will range from 60-80s for another day or two before cold Canadian air spills southward. A frost/freeze line will extend and E from Garden City, Kansas to Milwaukee, Wisconsin. More seasonal temperatures are forecasted beyond the middle of next week. This is a chilly US weather pattern going into May. The Russian wheat forecast remains dry through the 10-day window.

Live and feeder cattle prices were mostly lower yesterday after the opening of the three-day event, whereas after the two-day rally, on the third day, they had sold cattle all sharply. They tried to sell them down yesterday, but settlements kept any major action at bay. A victory for the bullish prospects of continued recovery in the better cash trade this week. A small number of cattle traded yesterday in Nebraska at $294 dressed, which was steady $1 higher for the the week. Offers in the South are quoted $185-186 which would be $3-4 higher. The outlook for midweek is no worse than steady. Cattle slaughter through midweek totaled 369,000 head, which is 11,000 head more than last week and 8000 head less than a year ago. Box beef values were off $1-2 on Wednesday and down a total of $4-5 for the week.

Friday afternoon at 2:00 p.m. is the Cattle on Feed Report with the average trade estimate for March marketings at 88% of last year, placements at 93%, and the April feedlot inventory number of 102% last year. If realized, the March placement rate will be the lowest in four years, and excluding the 2020 pandemic year, it will be the lowest placement figure since 2015. For now, the bird flu scare seems to have passed through the headlines in the cattle markets are trying to recover the major support value of 170-171 on the June cattle has held, and an attempt to recover to the $180-181 value could be underway, narrowing up the large’s spread that is indicated from the spring high into the summer low. Typically, the break from the spring high to the summer low averages around $8, and we’ve had a spring high so far of $190.