Recent uptrends are getting corrected.

Grains are lower across the board this morning as the midweek slump typically occurs during friendly periods of price action (strong Friday, Monday, early Tuesday, fade Wednesday into early Thursday) is at hand. The WASDE crop report is due on Friday, and it’s widely anticipated that the USDA will consistently produce numbers that are always benefiting the cheap food policy. (A.k.a., higher supply numbers than what the street has averaged).

If the report were to have a bullish surprise, it would be in South American crop adjustments that WASDE has yet to do. Argentina continues to struggle with corn stunt disease in the Brazilian soybean crop, which continues to move lower as flooding across RGDS has produced beans and is capable of making export status. The Argentine soybean harvest is also being delayed by excessive rains, which have slowed the arrival of new crop soy products to the world importers. This has helped support soybean meal over the past week.

Export licenses are now starting to rise in Argentina with the registration of 600,000 MT of soybeans and 1.12 MMTs of meal, along with 60,000 MTs of soy oil export. Also, there is a national labor strike plan for Argentina tomorrow, which includes the Oilseed Processes Union to protest Pres. Milei’s tax hikes in the privatization of state assets. The strike is likely a one-two day affair.

Ukraine wheat producers group indicated that 24/25 food-grade wheat prices would increase due to smaller carryover stocks and a decline in production last fall, leading to a smaller exportable surplus. Regarding Egypt’s GASC wheat tender due today, the lowest offer came from Russian origin at $255/MT. Results will be released later today. The Black Sea and Eastern European areas are holding in a dry weather trend with cool temperatures.

Fund managers are still massively short of corn/soybeans/soybean oil and wheat but are long 100,000 contracts of soybean meal. The price of tallow and imported used cooking oil for renewable diesel feedstocks. China has been flooding our domestic market with used cooking well, taking advantage of our renewable incentives.
The Minneapolis Federal Reserve President, Neel Kashkari, said the Central Bank must hold interest rates steady for an “extended period” that may last through 2024. It will be important to see positive inflation readings in the coming weeks.

Dry weather is offered for the Plains and the Midwest for 6-7 days into the future, allowing farmers to advance corn/spring wheat and soybean seedings. The Central and Eastern Midwest will deal with a secondary storm system late Wednesday/early Thursday, which will produce 2-.8″ of rain. Thereafter, warm/dry weather prevails on May 15 before showers again return. Midwest seeding will start later today and accelerate to mid-next week. The extended range 10-15 day forecast offers near to above normal rainfall for the Plains and the Midwest. The models are still working through the rainfall details, but the rain will push northward.

Live and feeder cattle futures produced a higher close yesterday, with a steady outlook anticipated this morning. Both markets gapped higher the opening, but the rally stalled, with markets remaining well under the highs at the close. Cattle feeders are looking to build on last week’s market strength, and packers are looking to mend historically weak margins. Estimated slaughter margins on the beef fell for the third straight week to $15/head. It’s the lowest weekly estimate for 2024 and the lowest for early May since 2014. In 2014, Packers supplemented their income with the bi-product value, which added $170/head revenue. This year, the bi-product is estimated at just $114/head. Box beef values on Tuesday had choice down $0.27 and select gaining $2.59.