Grain prices traded higher overnight, led by wheat.

The yo-yo spin in the grain trade continues as farmer selling hits spike rallies, sending grain trade action lower for the day, and the next morning, new strength evolves. Wheat futures recover again today after yesterday’s sharp losses, as the prospects of a Russian wheat crop of 84-87 MMTs are strongly considered versus 91.5 last year. There is no sign of a pattern shift in Ukraine/S Russia for moisture. Operational models extend near complete dryness there into May 26.
Day 2 of the KC Wheat Quality Tour calculated a yield of 42.4 bpa. This does not take disease, pests, or weed pressure into consideration. The theme of the day was variability. A final overall estimate will be announced this afternoon.

Wheat is nearing the most seasonally bearish window of the year but still has a big risk premium with the focus on the EU and Russia’s declining yields. Strategie Grains analysts raised their monthly estimate of the 24/25 EU soft wheat crop by +1.7 MMT to 123.5 MMT. This compares to last year’s 126.1 MMT.

Malaysian palm oil futures moved 50 ringgits lower overnight and scored new three-month lows. Rapeseed markets in Europe and Canada are down slightly. In the US, the key is whether the per-day crush rates recover in June following seasonal maintenance and April’s sharply lower NOPA member crush number of 166 Mil Bu.

NOAA is scheduled to update its June-August US climate forecasts today and release its accompanying drought outlook. The thought is that the NOAA summer forecast will be warm to hot with meaningful dryness confined to the southwest. Too much rain is forecast regionally into late May, with 2+ inches impacting pockets of the E Plains, MO, IL, and mid-South in the 6-10 day period.

The current forecast is wetter for the E Plains and Midwest next week. Planting windows are due to open between now and Sunday. Little/no rain and warming temps are forecasted in all of the Southeast over the next 72 hours. This is followed by a much more active pattern next week, with severe and excessive rainfall indicated May 22-25. Planting delays for IA, IL, MO, and WI are building for having corn beyond two-thirds planted by May 20. Unfortunately for the HRW wheat belt, little/no rain is offered while summerlike temps in high winds are forecasted Sunday-Monday.

Live and feeder cattle futures were pushed higher Wednesday, with a firm outlook this morning. June cattle were able to close above the 50-day moving average, which could trigger further buying again today, pushing to get into major resistance at $1 80. Cash markets were mostly quiet across the Plains on Wednesday. A small amount of trade was reported in Kansas at $1 84, which was steady for the week. Feedlots are watching beef prices rally this week and looking to sell friendly, steady money. Box beef continued to advance Wednesday, with the choice up $2 38 while select rose $0.49. This could likely be the end of the price lift ahead of the Memorial Day holiday.

Seasonally, the cash beef market tops now, with the seasonal top potentially forming here. The question is, can August cattle advance to $180 or better and be held? We would advise sales in August live cattle as it approaches the 179 range.