Thursday's grain strength carried into the overnight.

Grain prices continue to rally overnight, led by wheat and soybeans, as W Russia and E Ukraine crops now look to see further dryness that inner crop, while South American crop losses continue to become a reality beyond the USDA’s expectations. Buenos Aires Grain Exchange cut their estimate of the Argy 23/24 corn production forecast by 3 MMT to 46.5 MMT due to pressure from the stunt disease. Also, weather extremes continue, with the Río Grande do Sul in southern Brazil experiencing heavy rounds of rain on the remaining 20-25% of its soybean crop that is unharvested. 8 MMTs of soybean production are at risk of not being exportable.

Next week is the May CONAB and WASDE numbers, and the 8.5 MMT crop production disparity in soybean production becomes even more important if RGDS has lost potential exports of 2-4 MMTs due to quality degradation. Brazilian improving soybean price premiums make it look like the US will have some export opportunity in late summer on Brazil’s smaller 2024 crop.

Soybean meal was explosive yesterday, and this could continue for some time. Argentina’s lower house approved Pres. Milei’s Omnibus and fiscal bill initially and hold. But it has to be worked through in sections that allow the privatization of key government assets of postal, utilities, and airlines. The bill faces stiff opposition and potential strikes could occur in the public transportation/port areas in the coming week or two. Due to weak or no savings, there may be strikes that pop up here and there but usually never last long because again, of a lack of savings. Argentina has exported beans primarily for the processing of meals. This is prompting index funds to want to exit their massive short positions, especially in meal.

On the weather front, W Russian weather forecast remains arid now with limited rainfall for the next 10 days. Meanwhile, the US wet weather continues for another 7-8 days, with a drier and cooler trend in the following week. The forecast offers three storm systems pass the Central US in the next week with a pattern progressive to a Ridge/Trough, producing a drier NW upper airflow after that. All models do agree on a cooler/drier week number 2 for the Midwest as the wettest weather resides across the S Plains/Delta in the far Southern Midwest. The dryer week 2 Midwest weather trend will offer seeding to resume, though the chill retard seed germination and emergence.

Live and feeder cattle futures gapped higher Thursday morning on the USDA report of 30 samples that showed no concern for health quality from avian flu. A firm outlook is expected this morning. Cash trade north continued on Thursday, with prices moving $1-2 higher for the week at $295-296 dressed. The market in the South was untraded, with feedlots passing on steady bids at $1 82 while offering show lists at $185-186.

The April COF report showed that the number of heifers on feed was the second largest on record. The weekly slaughter data has also shown a historically large heifer share of will slaughter in recent weeks. At peak in early April, heifers were 43% of the Fed cattle kill. While the percentage has turned down in recent weeks, the heifer kill has remained at or near record large. For the year, the heifer share has averaged 41%, the most since 2002 and the fourth largest on record.

Brazil said it will urge the World Organization for Animal Health at the upcoming August meeting to recognize their status as foot-and-mouth disease-free. Yesterday, the Brazilian government declared itself foot-and-mouth disease-free without vaccination.