KC wheat overnight took out the May 2024 high in trading.

Overnight trading ended mix, but the grain trade was all higher in the early morning hours of today, with Kansas July wheat tagging 750 before retreating a dime from gains of just over $0.20 last night. Last night’s high took out the May 2024 high of 746.2 before retreating. Ultimately a run in KC wheat could achieve something in the 775-790 range.

Yesterday’s WASDE delivered plenty for the market to digest. The broad takeaway is that old-crop inventories remain comfortable, while new-crop balance sheets came in tighter than expected. The biggest surprise was in the global grain outlook. USDA’s 2026/27 world corn supply landed 11 mmt below the average trade estimate, extending a notable tightening trend. Compared with 2023/24, global corn supplies are now down 36.5 mmt, a decline large enough that the market is beginning to pay attention. Wheat is facing a similar squeeze, with world supplies projected to contract meaningfully. Soybean stocks are also moving lower, though the tightening is less aggressive than in corn and wheat.

USDA is currently using U.S. yield assumptions of 183 bpa for corn and 53 bpa for soybeans. Some crop scouts are already questioning whether the corn figure is too optimistic, particularly given conditions across parts of the Southern growing areas. As traders often say, strong crops tend to improve, while struggling crops tend to slip further. Wheat will also be active today, with expanded 70-cent daily limits in place after Chicago and Kansas City futures finished limit-up yesterday.

Once the WASDE numbers are further picked apart, attention should swing back toward U.S. planting progress and global weather, especially conditions in southern Brazil. On the political front, President Trump is in China for meetings with President Xi today and Friday. There had been some hope for export business ahead of the summit, but that now appears unlikely. Trade will still be on the agenda, though the U.S./Iran war is expected to dominate talks.

Weekly ethanol data is also due today, with the trade looking for production to rebound from last week both live and feeder cattle futures were lower yesterday, feeder cattle plummeting through Monday’s lows and closing with outside-day lower. A very poor technical performance. Even though the Trump administration is stating they are pulling back on the 200-day moratorium on beef import tariffs, it sure acts like it’s still coming on the board. Note that Trump says a lot of things, circles around with his conversations, and then comes back with his decision. This could be one of them after he returns from China. That’s just a guess based on how pathetic cattle futures performed when the statement was rescinded Monday afternoon.

Meanwhile, the cash feeder index continues to soften, and was off $1.48 yesterday,  now at $374.37. The standout in yesterday’s cash trade is even with the lower board; some southern sales have already taken place this week at $260, a $4 gain over last week. This is now trading at a $12 premium over the June live contract, whereas typically this time of year it would be a $6-8 discount. The board and cash have 45 days to rectify their current situation.

On the charts, June cattle need to hold 245.50 to keep an uptrend intact, while August feeder cattle need to get back above 363 by Friday’s close, which is a $7.00 gain from yesterday’s close of 356.00.