Soybeans lead overnight gains.
This morning’s grain trade is mixed with soybeans, showing the most strength, while hard wheat is firm and soft wheat is lower. Wheat is drifting on the prospect of some needed rain potentially occurring across SW Russia but given the overbought nature of the wheat trade and its inability to weaken, it is because of the large short position that still is looking for an exit. This morning’s Russian FOB wheat offer is up marginally from last week at $212/MT, a gain of $2.
Soybean futures are firmer on rising bids across Brazil as farmers start to hold back sales or the prospect of the 2024 harvest being smaller than advertised by exporters. The true measure of crop production will be measuring the nine-month crush/export data since Brazil always uses the soy crop leaving residual supplies by the end of the local crop year.
This afternoon’s crop progress reports are anticipated to see corn 30-32% planted, soybeans 90 one-20%, and 36-38% of the US spring wheat crop seated through Sunday. Spring wheat guess might be a bit high. It’s also anticipated that the winter wheat ratings will decline 2-3% in the good/excellent category due to the ongoing dry weather in Western Kansas. The SW Russian weather forecast calls for needed rainfall across the wheat area in the next two weeks. A high-pressure Ridge has waned and shifted West. The rain needs to drop, but the forecasts offer promise for improved Russian rainfall, which would favor stabilizing the total 2024 crop at 90 MMTs. Their spring crops are just now starting to get planted.
The upcoming May 1 Fed meeting is expected to see rates hold steady to the sticky inflation. It is starting to become apparent that the Central Bank will not be able to cut rates this year to get play inflation down 2%. If there is a rate cut, the current working thought is it will occur in the last quarter, right ahead of the elections.
It’s anticipated the EPA will release the updated GREET model this week (originally stated Tuesday) so buyer energy firms can better understand the carbon credit eligibility for sustainable aviation fuel, commonly known as SAF, made from US ethanol. The updated model is expected: US farmers to cut carbon emissions by no till farming, precision fertilizer application for the use of cover crops to make US ethanol eligible for SAF tax credits.
The North American weather forecast predicts rain for the E Plains and Midwest showers every 2-3 days with near to slightly above-normal temperatures. However, there is no organized chance of rain for the Western half of Kansas, where drought continues to build and causes stress on the reproducing HRW wheat crop.
Live and feeder cattle futures closed higher last week, with a steady outlook anticipated this morning. The cash trade development was steady to higher prices with early sales in the South at $182 that advance to $23-184 by late week trade live sales in the North at $184-186, a gain of $1-3 higher. Dressed sales were up $2 at $1 294. Last week’s top prices were seen in Iowa at $187.
]which was off 7000 from the previous week and 14,000 head fewer than a year ago. The cumulative slaughter in 2024 has been 5% less than a year ago and the lowest since 2017. The industry is attempting to offset fewer animals with heavier carcass weights. The average weight last week was 140 pounds, 32 pounds more than a year ago, and record heavy for late April. Year-two-day slaughter has been down 5%, but weights have averaged 18 pounds heavier, and production has been down just 3%. Resistance for June cattle is just above $1.80, with long-term support now well-defined at 170.50-172.