Grain futures faded overnight from sharply higher trade.

Grain futures opened higher to sharply higher overnight, with wheat futures pushing new calendar-year highs on Monday’s strong French milling wheat rally. Russian wheat crop estimates continue to decline, and rain in the coming 10 days is minimal, with only a few light showers possible late this week. Continuing heat/dryness is pushing down Russian wheat, Ukrainian wheat, and corn crop estimates.

IKAR, the private Russian analyst, dropped their all-Russian wheat production last week to 81.5 MMTs, while other private estimates are as low as 79.5 MMTs. Rising Russian interior wheat bids are at FOB $251/MTs this morning after bottoming at $197, a $1.50/Bu rally since March.

Soybean meal futures opened firm but gave up throughout the night on the expansion of US soybean seedings, which will also reflect a favorable start to the growing season. Rains across the Plains will now be ideal for summer row crop yield potential. Also, there is a turn of US-China relationships widening as both push for economic influence.

Argentina and Brazil are becoming more aggressive in their export offers. Argentine FOB corn for July is offered at $193/MT, essentially $0.26/Bu less than US Gulf. Brazil is showing willingness to follow with July offers at $201/MT versus $205 MT for US Gulf. Corn exports are set to slow. World wheat supply adjustments with Russian production falls have lifted wheat values to new highs, while corn is following world wheat feeding rates that are in decline. Corn is rising on price spreads. Meanwhile, soybean rallies will be difficult to sustain without increased Chinese demand. Rallies into the end of the month/1st of the month in the grain trade are selling points, with favorable US weather developing into mid-June.

The Midwest forecast looks largely dry in the week ahead, with showers targeting the Plains and much-needed areas experiencing recent dryness. The rain will start across Texas later today, with showers spreading northward in Nebraska by Wednesday. The entire Plains look to receive 1-2.50″ of rain, with localized heavier areas picking up 3-4.00″. The Central Plains rain event will be the best in months, helping summer row crop yield potential. The W Midwest will not see rain until late Thursday, spreading eastward into the weekend. Spring seeding will advance near completion, with soil moisture in its best levels since 2019. The overall pattern features shower chances every 4-5 days with near-normal temperatures. The 2-week Central US weather forecast is favorable into mid-June.

Friday’s Cattle on Feed report was neutral to market expectations without any surprises. Placements were at 94%, on feed at 99%, and marketings at 110%. Last week’s cash trade was higher in all regions, with sales in the north mostly $were two higher at $192, with a few selling up to $193.50. Dressed sales range from $3-6 higher at $302-305, and both live and dressed sales were at new all-time high prices. Sales in KS started at $1 higher at $187, but there were quotes as high as $192 by late last week. Trade in Texas was quoted at $187.

August live cattle futures are back to the overbought range, and that is the most overbought since February. They are $6-11 under last week’s cash trade. A year ago, the cash market peaked in early June and held a trading range abroad through summer. Look for a similar wide-raging summer trend this year. August live cattle is a sale at 182.50-183.25.