Short covering remains the theme for the grain trade.

This morning’s grain trade is mixed/firm, with corn and soybean futures remaining stout with yesterday’s advances. The shorts have a bid under the market despite showers falling across portions of W and C Kansas, with improved chances for Thursday. However, Russia is forecasted to stay dry well into May. The concern is Russian winter wheat production yield losses and how it will impact the 2024/25 exports. Russia does have sizable old-crop wheat stocks, which will cushion losses, but a rally of some form is attainable, especially if production falls below 84 MMTs. For now, Russian wheat prices are not showing much of a rally as traders try to anticipate how much further futures can run without the spot market following.

On Tuesday, open interest fell 14,523 contracts in corn, and 21,628 contracts in soybeans, so short covering is evident from the funds.

Four trading days remain until the first notice day against May futures contracts. You are continually seeing rolling out of the May contract ahead of time or outright liquidation.

Ukraine is anticipated to export a record 6.3-6.7 MMTs of all grains during April, with the crop year total currently at 40 MMT versus 40.7 MMT last year. Contrary to Russian port attacks, the new Ukraine export corridor is working effectively. So far, Ukraine has exported 15.2 MMTs of wheat, 22.1 MMTs of corn, and 2.2 MMTs of barley. The seedings and Ukraine are down for the 2024 crop.

The US weather forecast promises wet weather conditions for the Plains and W Midwest on the weekend and an active pattern thereafter. With the coming two storm systems, Western Midwest crop areas could receive 2-3.00” of rain, which will cause seeding delays. The Midwest weather pattern is one of active storms every 3-4 days into May 7, but mild to warm temperatures will allow for several seeding windows. It’s anticipated eventually, the W Plains will see enough rain to stabilize the HRW wheat conditions. The W Plains has two chances for rain through Sunday.

Live cattle tumbled yesterday as much as $3.00 early in the session on concerns of abscessed livers from animals being put in at a young age in the feedlots and then carried to weights not normal for this feeding process. This is causing some beef to be rejected. Prices recovered into the close, minimizing the damage on the charts, as it effectively plugged the gap from Monday yet showed strength into the close. Cash markets are at a standstill, with active trade likely on Thursday/Friday. Cattle feeders are looking to sell show lists $1-3 higher this week.

Looking at beef cow slaughter rates, they have fallen sharply in the last 7 weeks, which has sent cull cow prices sharply higher. Cutter cow prices have set a new record high for the last five weeks. The average price last week was $250/CWT for dressed prices, up $3.55 for the week and $58 higher than a year ago. The spread between Fed steers and cutter cows has now narrowed from $90 in January to $43 last week, the narrowest the spread has been for April since 2015. Reduced kills could be early indications of herd expansion plans, which would further tighten beef supplies and drive prices higher. Import volumes and prices will take on increased importance in the coming months.