Grain prices traded higher overnight, led by wheat.

Grain prices reverted higher overnight, led by wheat, as Turnaround-Tuesday found big farmer selling that rewarded Monday’s big gains. This is to be expected that a stairstep effect to the upside is occurring for the second quarter price lift we have been anticipating, as large old stock supplies held over the winter from farmers meet strong price lifts.

It’s anticipated that possibly 300,000 Hecht acres of winter wheat in southern and central Russia were negatively impacted by recent frosts, and still no sign of widespread rain across E Ukraine/S Russia prior to May 29. It’s thought that spot FOB Russian wheat has now been treated as high as $240/MT versus quoted prices of $231-232 on Tuesday evening. This reflects the highest prices since mid-January. A Russian wheat crop now of 80 MMTs can’t be ruled out, along with the potential EU crop decline of 4-6 MMTs year-over-year assures tighter balance sheets later this year for importers a deal with. SovEcon lowered their estimate of the 2024 Russian wheat harvest to 85.7 MMT, off – 3.9% from their previous outlook.

The KC Wheat Quality Tour saw some of the best hard red winter wheat on the northern routes in years, while the southern routes had drought-stricken fields. Tour scouts saw stripe rust, wheat streak mosaic virus, and freeze damage. According to Reuters, the CME and Euronext are preparing to launch a joint future spread contract between CBOT wheat and Euronext Paris mill wheat contracts. It will allow traders not registered on both exchanges to trade the difference.

Yesterday’s CONAB numbers saw their bean yield raised to 147 MMTs versus the USDA’s hundred 54 last Friday. They are still 6.3 MMTs apart, with June likely to be the showdown for rectifying. On the corn, Brazil pegged its crop at 100 11.6 MMTs versus the USDA’s 122. Here, too, June will start to see a big resolution. Based on their estimates, Brazilian corn exports look to fall to the low 30s versus last year’s 54 MMTs. This will benefit US exports. NOPA Crush Report out today at 11:00 am CT – analysts expect a record April 2024 soybean crush of 183.07 mbu vs 196.406 mbu in March and compared to last year’s same month of 173.232 mbu. April soyoil stocks are expected to be 1.88 billion lbs vs 1.851 billion lbs in March and compared to 1.957 billion lbs in the same month last year. The safrinha corn crop is struggling under hot and dry weather, with 50% of the core mature, 20% still pollinating, and 65% in grain fill. It’s anticipated yields will decline further.

The central US forecast remains wet in the Central Plains, Midwest, while the rain has been eliminated from the key areas of TX, okay, KS, and CO. Both the EU and GFS are in better agreement with the GFS shifting the heaviest rainfall northward into NE, IA, and WI. The 11-15 day guidance is consistent with E KS and MO along with E Midwest with additional rainfall of .50-1.50″ May 26-30. Arid conditions continue across the Southern and Western Plains. Drought will not be an issue for corn/soy in June, but planting progress next Monday will be key in determining how much of this year’s crop will be planted after May 25.

Live and feeder cattle futures jumped sharply higher on Tuesday with a firm outlook offered this morning. Both June and August live cattle traded two and close just under their 50-day MAs. Feeder cattle marked the strongest gains in most contracts up close to $4/CWT or more. Meanwhile, negotiated fed cattle markets were untraded, with cutout values again jumping sharply, with choice up $5.44 to $304.39 and select gaining a whopping $6.64 and $293.82.

Yesterday, IA’s State University estimates for cattle feeding returns in April showed mixed results. Steers sold in April that started 750 pounds showed an estimated net loss of $41/head but a $36/head improvement from March. Steers that started at 560 pounds showed an estimated net profit of $135/head. There was a $162/head difference in total costs.

The trade anticipates a steady to higher cash trade this week, with major moving average resistance on June cattle to be challenged at $179-180. Cattle supplies are historically tight, but carcass weights have helped offset fewer animals for now.