Grains put in a firm session overnight. Can it survive the day sellers today?

Grain markets pushed higher overnight with the Strait of Hormuz remaining closed seeing corn, soybeans, and wheat all attracting fresh buying. Weather remains the main driver, as stress is building across several important growing regions.

The wheat market is no longer focused only on the U.S. HRW crop. Concerns are now spreading to Australia and Russia as well. China is also drawing attention, with ongoing heavy rains raising questions about grain output after similar conditions hurt last year’s corn crop during harvest.

In the U.S., recent rains have not been enough to break the drought pattern in the South. There were some overnight weekend rains in northern and northeastern Kansas, but the dry Western portion still struggles and awaits forecasted rains this weekend. Brazil is adding another layer of uncertainty, with reports that the safrinha corn crop is beginning to turn dry. Argentina may offset some of that concern, as analysts now believe planted acreage was understated and production could be larger than previously expected. Taken together, these mixed signals are making crop estimates harder to pin down. Still, the broader theme is that supply is moving closer to demand, particularly in corn.

Traders also need to watch the calendar. May grain options expired last Friday, and first notice day is this Friday. Any remaining May futures positions should be exited by Thursday’s close.

One issue the market still appears to be under pricing is the disruption around the Strait of Hormuz. Fertilizer movement has been shut down almost entirely for two months, which could pose a serious problem for wheat production in Australia, India, and Brazil as their crop seasons get underway. The few cargoes that have left in the last two months have no intentions of heading back for more, which is a primary problem. It’s not only that the fertilizer hasn't left over for the last two months, but also the constant lack of movement that will create future issues.

Live and feeder cattle futures prices remained lower on the week, but recovered Thursday and Friday from the steep losses that were seen into Wednesday. The cash trade was off by $2 at 246 in the South, but Iowa had 248 on Friday, while sales in Kansas were at 247 late Friday. Cash feeder index was off $were a .35 into Friday at $were 369.32. Cattle slaughter is seasonally on the rise and declined to 529,000 head last week, a 10-week high. Box beef values remained firm through Friday, with choice last week gaining $5.94 and select jumping $9.47.

When you look at the charts, it’s obvious that support has developed at 240.00, as last year's weekly chart breakout came from that range. Support has reaffirmed itself just above 250-252. August feeder cattle revealed support at the uptrend line from the October lows, which came in at 354.50, offering immediate support. Resistance at a recovery is 369-372, with major weekly chart resistance at 378-383.