All grains were higher in the night session.

Grain prices are higher across the board this morning after yesterday’s slump as Europe and South America return from their May Day Holiday. China is off through the rest of the week. Excessive wet weather in the Central US and far Southern Brazil is becoming concerning in terms of crop implications. Concerns are building in the Northern Plains that preventive plant could come into play with low prices in the mix, while heavy rains fell in Southern Brazil (Rio Grande Do Sul), putting 8 MMT of unharvested soybeans at risk. Almost 16 inches of rain fell in 36 hours.

In RGDS, 30-day rainfall totals of 12-21.00” of rain have occurred, and another 4-9.00” is forecasted over the next nine days. 60-70% of the RGDS crop has been harvested, but the remaining 7-8.4 MMTs of beans are at risk in the field. Loss estimates are impossible to know with certainty, but Brazil traders and exporters are assessing that 20-60% of the fields have washed away, in some cases, a 100% loss. Soybeans can sprout in the pod causing loss of quality with green chlorophyll to be found in soy oil when processed.

Yesterday afternoon, reports from Ukraine emerged that Russian missile strikes caused a large fire at an Odesa port. Ukraine’s Ag Ministry officials predict that the ongoing war will likely decline 24/25 corn and wheat exports. Corn exports could drop to around 20-21 MMT from 27 MMT in 23/24, and wheat exports could drop to 14 MMT from 18 MMT. TD RIF has filed a lawsuit against Russia’s agricultural watchdog, stemming from delayed grain shipments and the lack of phytosanitary certificates issued by the watchdog.

The FOMC kept interest rates unchanged, and the policy statements that followed did not change the overall macroeconomic narrative. The bottom line is that the Fed sees rates higher for longer.

Rain finally fell in NW and W Kansas overnight with totals of .2-1.25’ and coverage of 40%. Additional chances will be offered over the next 10 days. The North American weather pattern is progressive, with four storm systems in the next 10-12 days to produce above-normal E Plains and Midwest rainfall. This is a wet pattern for the Central US and will keep weather drier weather returns in the 10-15 day period, a key element in the markets. The often most correct EU ensemble model has another system with at least normal rainfall. Fear is that the extended range models are being too conservative on May 10-20th for rain amounts. Fortunately, the Central US temperatures will be variable, ranging in the 60s to mid-80s.

Live and feeder cattle futures stumbled hard on Wednesday, fueled by fears of USDA/Aphis announcements on 30 initial US ground beef supply tests when they would be reported. This morning, a strong start is anticipated as the USDA reported that 30 initial tests had negative results for H5N1 and that the US beef supply is safe.

The cash trade has been slow for the start of the week, with limited sales in the north quoted on Wednesday. Live trade was steady at $1 higher at $185-186, along with a report of one pan at 187. Dressed sales were steady at $2 lower at $292-294. June is now the front month, and we could easily gain $2-3 this week.

The next several months are going to become complicated, as the April Cattle on Feed report indicated a total US net feedlot placement rate of 1.995 Mil head in March. This pulled feeder cattle inventories outside feedlots down to just over 18 million head, down 4% from a year ago and at a record low for April 1. We are going to see record low feeder cattle inventories, steady on feed numbers, record heavy carcass rates, and slowing demand based on economic data that will make volatility the norm as this gets sorted through. The drop in feeder cattle inventory still supports a longer-term bull market on hard corrections as feeder cattle supplies tighten into the end of the year.