Wheat pushes new calendar year highs overnight.

Grain prices are firmer this morning, with wheat trading up into double-digit gains overnight on the growing concerns that Russia’s production will be slashed below 80 MMTs if rain does not return to the Black Sea region of East Ukraine, Western Russia in the next 15 days. The deepening Black Sea drought has changed world wheat price dynamics in just one month. The private crop estimates of the 24 Russian wheat crop are falling to 79-81 MMTs, which assumes a 20% yield loss of winter production. Russian spring wheat is being planted and is too early for any crop assessment.

Corn and beans overnight are firm as severe storms have halted planting from eastern Wisconsin and SD across Minnesota, Iowa, and Wisconsin again. The last 30% of the corn crop getting planted is going to be a struggle. 2024 is going to be labeled a late planted year. This is concerning with NOAA predicting a warmer summer in the Midwest in July and August.

The demand side for row crops is picking up, with yesterday’s morning announcements of Mexico and Spain taking well over 100,000 MTs of corn. There are also rumors now that China has picked up 3-5 cargoes of soybeans. The trade will be looking for acknowledgement of this from morning USDA releases. Due to rising Brazilian bean prices and the fact that the Chinese Dalian market hit the highest price of the year at our equivalent of $15.27 per bushel, Chinese purchases for summer delivery look to be on the rise.
An active Central US weather pattern is in place, but there will be some seeding opportunities in the E Midwest as heavy rain targets the Delta. The range is shortchanging the Western plains, but temperatures are mild in the 80s. The lack of heat will aid the reproducing HRW wheat. No extreme heat is forecasted across the Central US into June 10.

Yesterday’s live cattle trade had the CME index jumping $2.00 after being near $184 for nearly 2 weeks. Cattle have had six straight higher closes in the live trade with indicators in overbought territory. Cash market first remains non-existent early in the week. Asking prices in the southern plains are $2-4 higher than the $186 paid on Friday.

We have trade estimates for Friday's May 1 Cattle on Feed report. Here are the averages and ranges of estimates: Total on Feed: Avg. -0.8%, ranging from -2.1 to +0.5%; April placements: Avg. -6.1%, ranging from -13.5 to +4.5%; April marketings: Avg. +9.8%, ranging from +8.6 to +10.7%. That huge range in estimated placements represents a vast divergence of thinking on whether heifers bought the past month went into feedlots or towards rebuilding cow herds.

Feeder futures had the impetus from higher fed trade with an extra boost from lower corn prices following faster-than-expected planting progress last week. The optimism was reflected in the auction business as well. At Oklahoma National Stockyards yesterday, feeder steers sold $3-6 higher, and heifers sold $4-8 higher. As pasture and range conditions continue to improve heifers at auction continue commanding a premium for their increasing value as herd replacements as well as feedlot candidates.