China agrees not to send weapons to Iran. Supporting soybeans on potential buys.

The grain trade is seeing a bit of a reversal of yesterday’s action, with soybeans leading this mornings strength, followed by corn, and wheat correcting a bit, with rains again showing up in the 11-15 day forecast (very unreliable). The strength in soybeans comes from Pres. Trump said overnight that the war should be over soon, and that China agreed not to send weapons to Iran, avoiding a standoff and a potential breakdown of the delayed meeting schedule between the President. Trump and Xi May 14-15.

Today, we will get the March NOPA report, which is expected to show a record number, and our weekly ethanol numbers are out at 9:30 a.m. CT. Margins remain strong on bean crush and corn grind. The soybean crush looks to be a record 230 million bu, but soy oil stocks could build into the 150-250 million-pound range. Soy oil stocking peaks now as we head into the summer driving season.

The Brazilian safrinha corn crop in Mato Grosso has seen rains shut off well over a week earlier than normal. They are now entering their dry period, which is why they need to get the corn planted soon. Follow-up rains will be needed, but they’re not typically strong seasonally. So this will be watched. Soybean meal strength over the past week has come from excessive rains in Argentina that delayed the corn harvest, keeping them from moving onto the soybean harvest. Delayed availability to crush and to satisfy commitments for meals outside Argentina has created near-term demand from the US over the past week.

Another power day for the cattle market yesterday with contract highs seen again in live and feeder cattle. On the continuation charts, August feeders are targeting the gap being plugged at 379, and then the contract high at just under 383 on the continuation chart that occurred last October. The cash feeder index jumped another $1.08, bringing it to $375.02 and leaving it just a couple of dollars away from the high set in February.

Choice cutout yesterday picked up $1.28 and is at $383.20, moving the premium back over Select, which was down $3.4 at $379.80. This puts Packer margins in a very tight situation if they pay up this week, around 252, which the April contract implies. Live cattle June have now built up support at 246-247, with August feeder cattle creating support now at 369-370.