Mixed overnight trade.

Futures spent much of the overnight session on the plus side, but drifted lower as trade wound down for the morning break. Short covering gave the market its overnight strength, but fresh buying will be needed to reverse our current market trend. Fresh news is relatively thin this morning, but we will receive a pile of input on Monday from the USDA data. Positioning for next Monday is the primary factor in trade, though, and this is taking attention away from nearly all fundamentals.

The trade views current US weather as favorable, although more pockets of crop stress and storm damage are being noted. If crop ratings do not improve next week, the trade may shift its opinion on production. It is interesting to note that most farmers are claiming they have a good corn crop growing, not a great one. Several in the Western Belt also claim that recent rains just kept the crop going; they did not build soil moisture. This will garner more interest if rains remain sparse once the calendar turns to July.

Brazil's report yesterday showed that biofuel blending requirements starting August 1 have risen. This reflects an increase of 3% in their ethanol blend and will consume an additional 100-105 Mil Bu of corn and 95-99 Mil Bu of soybeans over the coming year. Unfortunately, this additional corn grind will fall short of the Brazilian corn crop recorded by over 20 MMTs.

Cattle futures closed on the defensive yesterday and are on top of major technical support values that need to hold to stop index funds from further liquidating their record positions by the end of the month. Remember that index funds are paid on closed profits, not open profits, so rather than take what is left in profits now and get paid in July, rather than wait for October, liquidate currently and reestablish longs after 1 July.

We are still in untraded cash negotiated cattle markets, with cattle slaughter at midweek totaling three and 40,000 head, up 13,000 from last week but still 6000 head less than last year. At midweek, boxed beef values saw select fall $6.12 while choices held again at $0.69.

The April cold storage report showed a US frozen beef supply on April 30th of 407.48 million pounds. This was a 3% decline from the end of March and 1% below April 2024. The US pork supply was 451 million pounds, down 1% from March and 7% less than April 2024. The pork belly supply was 53.01 million pounds, 7% less than in March and down 26% from last April. The total US red meat supply was down 2% in the month and down 4% for the year.