Grains turned higher for a Turnaround-Tuesday.

Grain futures firmed in the early morning hours after an evening session of lower prices. Follow-through selling from yesterday’s technical close created a slump in the night session as the trade digested crop progress and ratings reports that revealed prospects for reasonable crop production. A bid arrived in the morning as short index funds chose an opportunity to sell the rumor by the fact action, along with end-user pricing, with corn having declined over $0.25 since Memorial Day weekend.

Weekly progress shows planting has advanced, leaving 6.7 million corn and 13.4 million soybean acres left to seed. We are now at the prevent plant dates for much of the Corn Belt, which will have an impact on these remaining acres, especially with depressed futures. No major updates on US trade relations this morning, and that is what the market is most interested in right now. The US dollar is rebounding from its six-week lows, which is taking pressure off commodities.

Census demand numbers from April were supportive. Soybean crush for the month was a record 202 million bushels. This was down from the 207 million crushed in March but well above the 178 million from April 2024. Soy oil production totaled 2.4 billion pounds, 3 percent less than March but 15 percent above April 2024. Corn grinding for ethanol slowed in April, which was expected given the number of plants that went offline for spring maintenance. Some plants extended this downtime due to poor margins but have now resumed operations. Ethanol manufacturing consumed 425.8 million bushels in April, 6 percent less than in March but 1 percent more than last April. Dried distiller's grain production for April totaled 1.63 million tons.

The Ukrainian Agriculture Ministry has revised its forecast that the 2025 harvest could be 10 percent lower than prior estimates due to the dry weather reported over the past several months, and, of course, the ongoing war. Wheat harvest could come in at 20 to 22 million metric tons, while corn production would be 26 million metric tons. It was previously perceived that their corn harvest would be as high as 30 million metric tons.

Weather models are now starting to become more “Summery” in their forecasts, meaning they shift and change every six hours. This morning’s EU operational and ensemble forecast models are hinting at a Central US high-pressure ridge developing in the Midwest during the last half of June, creating a ring of fire rainfall pattern. The GFS model places a ridge farther west over the southwestern corner of the US. What is developing is the first time we are seeing multiple models hint at high-pressure ridging across the US. It is always the summer Central US weather forecast that will determine production, and these begin to vary as we approach late June and early July. In the short term, the 11-15 day forecast, which carries no better than 35 to 40 percent accuracy, predicts near to above normal rainfall to arrive in the Western Canadian prairies. These moisture forecasts need to migrate into the 6-10 day models, but spring wheat futures this morning are weaker compared to winter wheat contracts, casting hope for the rain.

Live and feeder cattle futures leapt higher on Monday and did not look back, posting strong closes just shy of last week’s post-COF report highs. The cash feeder index is now over $301. Last week’s estimated slaughter margins rose to a 7-week high, which helped packers bid up last week’s values. The Packers will be reluctant to give up those margins again this week, given the expected seasonal rise in US beef production.

Last week’s five-area live steer price was reported $3 higher at $230, and the average dressed price was $368, a gain of $6. The slaughter report reflected that packers bought 60,192 head on a negotiated basis for 1 to 14-day delivery and 21,291 for 15 to 30-day delivery. The board found support in the wide bid between cash and discounts, so until cash starts to soften, the board will likely maintain its strength. With the $14 discount on the June contract to last week’s cash, it will take a substantial break in the cash market to get the board to rechallenge recent lows.