Corn and wheat prices try to lead overnight strength.

This morning’s grain trade is mixed, with wheat and corn showing small gains while soybeans have slipped to trendline support. Grains are finding support from the weekly Crop Progress report, which showed lower than expected ratings for both corn and wheat. U.S. winter wheat ratings slipped by 2 points last week, while the initial corn rating came in at 68 percent, 5 percent below the average trade estimate.

The most significant takeaway from the report is that, as of Sunday night, approximately 12.4 million acres of corn and 20 million acres of soybeans remain unplanted. Many of these acres are in the Eastern Corn Belt, where rains continue to delay progress. The greatest concern is in Ohio, where corn planting is just 54 percent complete, 20 percent below the average pace. There are also reports that a number of acres already seeded may need to be replanted. Some farmers are opting to trade corn seed for soybeans, which could call into question total U.S. plantings. In this scenario, even a small acreage shift could be viewed as negative for both corn and soybeans.

In the Western Corn Belt, NOAA is forecasting 30 days of warm weather, though no significant crop stress is expected. This is typically the time of year when weather premiums start to be priced into futures. No major trade developments are reported this morning, but a sharp rebound in consumer confidence was noted in May. It remains to be seen whether this was driven by improved market sentiment or by preemptive buying ahead of escalating trade tensions.

Seasonally, grain markets tend to soften following spring rallies, particularly after June 9. Many sellers are watching for signs of strength over the next 12 calendar days to take advantage of potential pricing opportunities. With strong export demand for corn, the USDA may be forced to adjust projections upward by 50 to 100 million bushels in the next WASDE report, which could allow July corn to rally above 470. December corn, however, faces strong resistance near the 460 level.

Numerous opportunities could still unfold. For example, in 2012, when 96 million acres of corn were planted, the market bottomed in late June before rallying by three dollars per bushel into early September. We are watching closely for market opportunities.

A strengthening jet stream over the Pacific is expected to bring normal rainfall and warming temperatures to the Midwest through June 10. No extreme heat is in the current outlook, as forecasts show a return to normal temperatures. Showers are expected to develop Wednesday across the North Central Plains, continuing into Saturday, June 7. Rainfall estimates in the Northern Plains range from 0.5 to 2.0 inches. In China, rain is forecast in the northern wheat regions, which have been in drought for six weeks. Harvest there is set to begin in about three weeks.

In livestock, live and feeder cattle futures experienced a volatile session yesterday due to false rumors that the New World Screwworm had been found in Missouri. Live cattle dropped as much as $4.50, and feeder cattle fell by as much as $7.50 before APHIS confirmed the rumors were false, allowing for some recovery. Despite the recovery, the market did not fully rebound, likely due to the timing of the Cattle on Feed report and traders locking in profits or establishing hedges after last week’s rally.

The false rumors have stirred unease among cattle feeders, with some opting to move heavy animals to market this week. This trend is turning the cash market outlook bearish, particularly with the addition of seasonal pressures and reported financial losses at some processing plants that may opt for closure. Last week, packers paid record prices, with the five-area average reaching $227 and the dressed trade at $362. However, negotiated volume fell to a six-week low of 55,000 head.

We now expect to see ample upfront supplies developing while beef prices soften heading into summer. As a result, the cash cattle trade may begin to feel pressure. Initial support for August live cattle is seen in the $203 to $204 range.