Recent uptrends are getting corrected.

After a firm start overnight, a mixed trade is at play this morning, with wheat leading sharp gains. Reuters reported that three of Russia’s grain regions (Lipetsk, Voronezh, Tambov) declared a state of emergency due to crop-damaging frosts. These three states account for 10% of this year’s winter wheat crop. There frost concerned yet for another two more nights.

There is growing discussion regarding Russian wheat crop sizes, with most commercial estimates now ranging in the 87-90 MMT range, down considerably from the last two years. A Russian all-wheat crop of 82 MMTs or less will have Russia restricting exports to the degree that sparks a wheat bull market. Growing conditions now through mid-June are critical, while dryness continues to affect most of Southwest Russia. Grain sources indicated that Egypt’s GASC ended up buying 420K MT of wheat in their tender, 360K MT of Russian origin, and 60K MT of Romanian.

Argentina’s Rosario Grain Exchange cut its corn harvest estimate by -2.5 MMT to 47.5 MMT due to stunt disease spread by leaf hopper insects. It kept its Argy soybean production estimate steady at 50 MMT but cautioned that precipitation and higher humidity had delayed harvest. Argentine farmers in private analysts anticipate further cuts, yet as harvest gathers, steam, and yield losses are more accurately assessed. Private analysts anticipate the potential Argentine corn crop could decline to the 44-46 MMT range. This is well below early season estimates of 57-59 MMTs.

The USDA preliminary 2024 corn trend yield is 181 bpa (from February). This is the first time the trend line yield has declined y/y. Yields have flattened out on a national basis, with the 3-year average at 175.8 bpa. The ratio of beans to corn has increased to 2.51:1.0 vs 2.44:1.0 at the beginning of March. Will this influence the amount of corn planted if delays continue? USDA Supply/Demand & Crop Production Report tomorrow at 11 am CT.

A weeklong spring planting window is in the forecast with the central US having a window extending to May 16. Warm and dry weather for the next 67 days should allow for considerable corn/soybean/spring wheat seeding progress. The forecast calls for wet weather to return beyond May 16. The extended range 10-15 day forecast has near to above normal rainfall for the Plains and the Midwest. Models are still working on the rainfall details, but rain will push northward. No extreme heat is forecasted with any sub-tropical high-pressure ridging holding across Mexico.

The cattle trade closed lower yesterday, with the weaker outlet for this morning's start anticipated. Feeder cattle paced the decline even as corn prices retreated. The cash feeder Index was down eight cents at $239.45. Meanwhile, the negotiated fed cattle trade remains at a standstill, with better interest expected later today.

Cattle slaughtered midweek totaled 367,000 head, which is up 7000 last week and nearly 12,000 head less than a year ago. The uptick in production weighed on box beef yesterday, with choice dropping $1.82 to $296.67 while select tumbled $4.09 at $288.25. The choice/select spread now rose to $8.42 choice premium, which is the highest since late March on a weekly average basis. The spread remains historically weak, at the lowest since early May 2012. Compared to a year ago, the choice value is down $6, and select is nearly $8 higher. June cattle continued to stare at long-term support in the $171 range, with resistance at $179-180.