Thursday's grain trade starting out higher.

This morning’s grain trade is finding a firmer start after a week's worth of selling pressure since May 28. A pattern shift to a warmer/drier Midwest forecast in the hands of the coming summer weather is creating a pause in the aggressive selling and allowing for pondering that high crop ratings that the season is starting with may possibly see a shift. The 2024 crop is not exactly an early-seeded crop, and historical yield drags of 10% or more on US corn crops planted after June 1. Granted, that is a smaller amount, but it still has significance in trying to work a trendline yield. It would be the late June and July Midwest weather that will make US corn crops.

A warm, dry June is good for the corn and soybean crops to be rooted down for potential summer crop stress. However, should heat and dryness persist into July, that’s when yield issues will develop. Using a corn trend yield of 181 BPA would be a new record by almost 4 BPA and would account for 300 Mil Bu supply for a corn harvest area of 82.2 Mil acres. This morning's strength may just be another selling opportunity, but basing action will probably start to develop ahead of next week’s WASDE crop report and the June 30 acreage and stocks data. July corn is basing above its April lows, while December corn has challenged its April lows and is finding interest.

The US Golf soy oil is at price parity with South American offers for July at one cent under Chicago. This is the first time in years that US soyoil is fully competitive in the world export market. Brazilian soybeans at Paranaqua are priced at $0.50 over versus US Gulf at $0.60 over. South American basis is narrowing, which is underpinning US soybeans.

Export sales this morning were better-than-expected for corn at 1.18 MMTs, while soybeans were inside expectations and wheat slightly below.

Maritime labor unions in Argentina announced on Thursday they would cease all activities in ports for 48 hours. The United Maritime Workers Union, in a post on Facebook, said that the Tugboat Owners Chamber (C.A.R.) has refused to negotiate an expired bargaining agreement, prompting the union to halt work.

Russia will boost financial support to farmers but is not expected to ban grains exports if a federal emergency is declared due to frosts last month that damaged crops, industry sources told Reuters. “We don’t expect strict restrictions on exports, but a reduction in our supply to the world market is quite possible. We will be less flexible on prices, recognizing the limitations of our supply,” said Eduard Zernin, head of Rusgain. This exporter group regularly meets with the government to discuss their views on the state of the industry.

A quick look at the farm bill negotiations, Senate Ag Committee Chair Debbie Stabenow (D-Mich.) expressed significant concerns regarding the House Ag Committee’s farm bill, particularly its provisions related to commodity programs. During an online conversation with former Sen. Heidi Heitkamp (D-N.D.), Stabenow said the House bill would substantially increase payments for Southern producers, specifically those with cotton, rice, and peanut base acreage. She cites analysis from the University of Illinois and Ohio State that the proposal would essentially put the farm bill back to a system in place before 2014 where “you get a government payment whether it’s a good time or a bad time.” She said that increasing reference prices by 70% would mainly benefit “big farmers” in the South, citing estimates indicating these payments would more than double under the proposed legislation. Stabenow’s criticism reflects broader opposition to the bill’s approach, which some argue favors wealthier farmers and specific commodities at the expense of other priorities, such as climate funding and food aid. The bill’s contentious nature and the divided government make its path to becoming law uncertain, with significant negotiations and potential revisions likely needed to achieve bipartisan support. Stabenow said she is eyeing the post-election, lame-duck session of Congress as the best chance to get new farm legislation passed this year.

The Midwest looks to get a warmer and drier forecast versus recent weeks, as the upper airflow is from the NW. This would produce cool/dry weather as a high-pressure Ridge across Mexico begins to nose northward into the Great Basin and Southern Plains after June 12. This Ridge will produce heat in the Southern and Central US, with rain chances across the far and Midwest from ridge-riding storm systems. The timing and amounts of rain from the Ridge riding storms are unavailable at this time, and significant forecast adjustments will occur. There is still no indication of rain to break the dire Mexican drought. A storm system, though, will pull across the S Plains this weekend, producing moisture in okay/KS/N Texas.

Live and feeder cattle futures were lower on Wednesday, with a softer start anticipated today. Yesterday afternoon, WHO announced the death in Mexico of an individual who had avian flu. The individual also had other multiple conditions, such as chronic cardiac issues and diabetes. He was 59 and died on April 24. What is interesting about the story is the individual had avian flu but no contact with poultry or dairy. It’ll be interesting to see how the board reacts to such a story when it’s walking on pins and needles on various stories.

Meanwhile, cash markets remained quiet Wednesday, with interest expected to develop today. Small volumes of cattle sold in IA at $188, which was $2 lower, while the dressed sales were at $302, $2 higher. Asking prices in the north were quoted at $305-306, which would be $4-5 higher from last week. Meanwhile, box beef values corrected early week gains, as choice was off $2.09 and select dropped $3.57. The choice/select spread is $13.89, the tightest for early June since 2015. The strength of Select is reflecting an overall tighter beef supply. August cattle are currently trading $11 under the current cash trade which is better than a year ago but still weaker than normal. October and December cattle are also priced cheaper than normal to the cash market for early June.